Strong financial performance

AKVA group completed second quarter with growth in revenue and order intake. The revenue in second quarter of 2019 ended on 798 MNOK (627 MNOK) with an EBITDA of 101 MNOK (52 MNOK). Second quarter EBITDA margin was 12.6% (8.3%). The Net Profit increased from 19 MNOK in Q2 2018 to 31 MNOK in Q2 2019.  

AKVA group is ending the quarter with an order backlog of 1.6 BNOK.

A half-yearly dividend of 1.00 NOK per share will be paid in September 2019.

Cage Based Technology(CBT)
The total CBT revenue for Q2 2019 ended at 664 MNOK (467). The EBITDA for the segment in Q2 came out at 85 MNOK (35). The EBITDA margin was 12.8% (7.5%). EBIT and EBIT margin ended at 46 MNOK (17) and 6.9% (3.6%), respectively.

The revenue in the Nordic region ended at 482 MNOK (260). Improved margins in the Norwegian barge business compared to H2 2018 and Q1 2019, but still fierce competition and operational improvement potential. Stable operations at Helgeland Plast in the quarter. Strong improvement in quarter from Sperre and AKVA Marine services (sale of ROV’s and net washers, and net cleaning in sea). Order intake in the Nordic region ended on 379 MNOK in the quarter, compared to 219 MNOK in Q2 2018.

In the Americas region the growth continues, with revenue of 124 MNOK compared to 118 MNOK in the same quarter in 2018. The sales and supply contract with Grieg NL signed in Q3 is not included in the order backlog yet. Order intake in AKVA group Chile increased from 87 MNOK to 125 MNOK within the cage based segment in Q2.

EME ended the quarter with revenue of 58 MNOK, a decrease from 90 MNOK in the same quarter last year. The operations in Greece, Spain and Middle East are well positioned for the anticipated growth in the region. Turkey had good order intake in Q2, signing orders for 64 MNOK in total. The Turkish joint venture Emel Balik is being ramped up to partly serve as capacity back up for our net assembly in Lithuania.

Software (SW)
In Q2 2019 the revenue for the segment was 39 MNOK (42). EBITDA and EBIT ended at 4 MNOK (5) and 0 MNOK (1), respectively. A cooperation agreement was entered into with Observe Technologies (AI) and the first module with feeding assistant is already in the market. Plans are established for upgrades of technical platform of Fishtalk.

As noted in stock notice of 18.06.2019 AKVA group has terminated the agreement to divest Wise lausnir ehf and strategic options are under evaluation.

Land Based Technology (LBT)
Revenues for the second quarter were 95 MNOK (117). EBITDA ended at 12 MNOK (12) and EBIT was 7 MNOK (9). Order intake in Q2 2019 was 77 MNOK compared to 87 MNOK in Q2 2018. Major land based contract awarded by Russian Sea of 11.9 MEUR, contract expected in Q3/Q4, not yet in order backlog. The pipeline of projects continue to be good. Order backlog ended at 611 MNOK compared to 449 MNOK last year.  

Balance sheet
The balance sheet remains strong. Working capital as a percentage of 12 months rolling revenue is 16.1% (8.2%). The twelve months average working capital is 12.6%. Cash and unused credit facilities amounted to 469 MNOK at the end of Q2 (418 MNOK). Total assets and total equity amounted to 3,260 MNOK (1,881 MNOK) and 1,068 MNOK (499 MNOK) respectively, resulting in an equity ratio of 33% (27%) at the end of Q2.

Atlantis Subsea Farming AS
In partnership with Sinkaberg-Hansen AS and Egersund Net AS, AKVA group ASA established Atlantis Subsea Farming AS on February 1st, 2016 with the purpose of developing submersible fish-farming facilities for salmon on an industrial scale.  Atlantis Subsea Farming AS applied for six development licenses to enable large-scale development and testing of the new technology and operational concept.

On February 22nd 2018 The Directorate announced that the Company has been granted one license. Atlantis Subsea Farming AS now in execution mode, fish in sea.

Dividend of NOK 1.00 per share to be paid in Q3 2019
The Company’s main objective is to maximize the return on the investment made by its shareholders through both increased share prices and dividend payments. According to AKVA group ASAs’ dividend policy a dividend of 1.00 NOK per share will be paid in September 2019. Total dividend payout in September 2019 will be 33.3 MNOK.

Order Backlog
We have experienced continued good activity across all regions and segments in the second quarter of 2019. The order intake in Q2 2019 was 760 MNOK (471 MNOK). The order backlog at the end of Q2 2019 was 1,572 MNOK (1,274 MNOK). 611 MNOK of the total order backlog at end of Q2 relates to Land Based technology.

Outlook
The order backlog for Land Based projects is strong, and the order pipeline is good, in all geographical areas. Further, project execution is improved, and the potential for growth in revenues and earnings are good. Timing of this is dependent on planning and execution of infrastructure works at customers.

The Nordic CBT market continues to be strong, although competition is fierce. Several improvement programs have been initiated and new products are being launched in August to strengthen our position and improve earnings.

The Americas region is experiencing a continued high activity level. Following several improvement programs margins have increased and to further strengthen our competitive position work has been initiated to evaluate how to broaden our product and service offering.

Our presence on the east coast of Canada is being built on the Sales and Supply contract entered into with Grieg NL in Q3 2018 for the delivery of barges. The contract secures a good platform for further development in the area. In Q2 a letter of intent has been agreed with a local partner to form a joint venture to explore service offerings on land and in sea.

Our digital solutions is being integrated with our control systems and a new modernized version of Fishtalk has been launched. Further a brand new control system, AKVAconnect will be launched in August. The cooperation with Observe AI (artificial intelligence) has materialized in firm contracts, and 15 customers now use our solution. All, factors that will assist in generate growth in the software area going forward.

The acquisition of Egersund Net has been successful and both the service and new sales division of the company has grown (pro-forma) YTD 2019 compared to last year. There are good potential to further build on the competence and expertise in Egersund to expand net sales and services to other geographical areas. Firm plans exists to expand the service offering in northern Norway (together with a  local partner) by building a new service station.
In general the market activity is good in most markets and opportunities exist on a broad basis to further strengthen AKVA’s position.

About AKVA group
AKVA group is a technology and service partner to the aquaculture industry worldwide. The company has 1 527 employees, offices in 12 countries and a total turnover of NOK 2.6 billion in 2018. We are a public listed company operating in one of the world’s fastest growing industries and supply everything from single components to complete installations, both for cage farming and land based aquaculture. AKVA group is recognized as a pioneer and technology leader through more than 40 years. The Corporate Headquarter is in Oslo Norway.

Dated: 14 August 2019
AKVA group ASA

Web: www.akvagroup.com

CONTACTS:

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

Attachments

• 2019 2Q AKVA group report
• 2019 2Q AKVA group presentation