German frozen seafood giant Frosta expects to post low single-digit growth in 2019 thanks to increased demand for its ready meals and the launch of its "Frosta Fit" low-carb range.

“The ready-meal market continues to grow well, also when it comes to ready meals with fish," Frosta CEO Felix Ahlers told IntraFish. "Products with a higher fish content, where there is a big impact, the trend is a bit downward but the general market is quite positive.”

Frosta has introduced its Frosta Fit range of low carbohydrate products, including items with wild-caught salmon that are proving attractive to younger consumers.

“There is a growing group of people who are more health conscious, who are very focused on training, who consciously eat low-carb and good diets,” Ahlers said.

The company also continues to see a trend in favor of sustainable and natural products.

Results originally announced in February showing Frosta's net profit plummeted by half despite a boost in sales volumes in 2018 were confirmed at a shareholders meeting earlier this month.

The Bremerhaven-based frozen seafood processor's sales increased in 2018 by 1.6 percent year-on-year to €509 million ($579.4 million), but the group's net profit after tax fell by €23.4 million ($26.64 million) to €20 million ($22.77 million).

The company blamed the profit drop on the sharp increase in raw material prices in 2018.

“Fish price increases had quite a big effect on the volume, so it looks like there is quite a big price elasticity, so the volume effect was bigger than we expected,” Ahlers said.

Outlook

So does the company expect fish price inflation to continue to impact volumes or settle down?

“We don’t know," Ahlers said. "It's rather growing, the downward trend."

Over recent years the German seafood market has seen slight, steady increases in growth with branded business faring better, helped by investments in advertising, although there is little new in terms of product development in the past year.

Given the background of tough market conditions linked to fish price inflation the Frosta boss does not foresee spectacular growth in 2019.

“We see low single-digit growth at the moment,” the Frosta CEO said.

Whether this will be enough to turn around the company's sagging share price remains to be seen.

After flat lining for months around the €82 ($91.90) mark on the Frankfurt Stock Exchange until October last year, Frosta's shares have since fallen by a third to open this week at €54 ($60.52).

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