Aquaculture equipment supplier Akva has not escaped the impacts of the global COVID-19 pandemic, which pushed its land-based arm into the red during the second quarter of the year.
The group posted a loss of NOK 21 million (€2 million/$2.3 million) on its land-based technology division during the quarter, which compares with earnings before interest taxes, depreciation and amortization (EBITDA) of NOK 12 million (€1.1 million/$1.3 million) in the same period a year ago.
Revenues for the division also shrunk, to NOK 70 million (€6.6 million/$7.8 million) down from NOK 95 million (€9 million/$10.6 million) last year.
The low activity and negative margins were primarily due to impacts of the COVID-19 outbreak, said the group, specifically because of the cancellation and postponement of projects, “which led to restructuring costs.”
The drop was also linked to the closing of old projects and start-up of new generation of projects, it said.
Nevertheless, the order intake for the land-based division in the second quarter was solid at NOK 236 million (€22.4 million/$26.4 million), compared with NOK 77 million (€7.3 million/$8.6 million) in the same period of 2019.
The order backlog for land-based projects ended the quarter at NOK 771 million (€73.2 million/$86.3 million) compared to NOK 611 million (€58 million/$68.4 million) last year.
Overall, the Akva group saw revenues in the second quarter reach NOK 862 million (€81.8 million/$96.5 million), up from NOK 798 million (€75.7 million/$89.3 million) in 2019, an increase of 8 percent.
EBITDA though decreased from NOK 101 million (€9.6 million/$11.3 million) in the second quarter last year to NOK 93 million (€8.8 million/$10.4 million).
Land-based drives strong pipeline
Order intake in the quarter for the group overall was NOK 994 million (€94.4 million/$111.2 million), with a backlog of NOK 1.78 billion (€169 million/$199.2 million) at the end of June 2020, 43 percent of which is related to land-based technology.
“Akva group has remained focused on the implemented measures started after the COVID-19 outbreak in March to ensure the health and safety of our employees and customers, to monitor and optimize the overall liquidity in the company, to maintain the security of supply during the crisis and a steady order intake to ensure work for all in Akva group,” the company said.
“So far, the pandemic has impacted our land-based segment the most with cancellation and postponement of contracts. With regards to the cage-based segment the impact is mixed as our portfolio of offerings are more diversified in regards of customer needs.”
The cage-based technology arm posted an EBITDA for the quarter of NOK 111 million (€10.5 million/$12.4 million) up from NOK 85 million (€8.1 million/$9.5 million).
Revenue ended at NOK 775 million (€73.6 million/$86.7 million) up from NOK 664 million (€63 million/$74.3 million).
The revenue in the Nordic region ended at NOK 532 million (€50.5 million/$59.5 million) up from NOK 482 million (€45.8 million/$53.9 million), while the order intake ended at NOK 304 million (€28.9 million/$34 million).
“The region continues to experience high activity with a strong pipeline,” said Akva.
In the Americas region, activity is also on a relatively high level and the order book is increasing, it said.
Here, the region had revenue of NOK 171 million (€16.2 million/$19.1 million), which is an increase from NOK 124 million (€11.8 million/$13.9 million) in the second quarter last year.
During the quarter, Akva signed a “strategically important” Tubenet contract in April 2020 and exercised the option to acquire the remaining shares in Sperre in May.
Furthermore, in June the group signed a non-binding Term Sheet with the Norwegian company AquaCon for a potential supply of equipment, engineering and design to a new land based
grow-out facility and has a potential value for Akva group of $130 million (€110.2 million).