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AKVA Group's Profits Disappoint as Salmon Tax Hits Post-Smolt Investments

AKVA Group, a provider of aquaculture technology, reported higher revenues and profitability in the final quarter of 2023. However, the company indicated that the implementation of Norway's new resource rent tax on salmon farming has adversely affected both its land-based and sea-based business divisions.

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AKVA Group's Profits Disappoint as Salmon Tax Hits Post-Smolt Investments
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Aquaculture technology provider AKVA Group reported increased revenues and profitability in the fourth quarter of 2023. However, the introduction of Norway’s new resource rent tax on salmon farming negatively impacted both its land- and sea-based business segments.
CEO Knut Nesse, delivering AKVA’s Q4 2023 results on 16 February 2024, stated that the company's activities in 2023 remained relatively unchanged from the previous year. Despite an improvement in profitability, it fell short of expectations.
Nesse highlighted the ongoing challenges faced by the Land-Based Technology (LBT) business, attributing them to high costs and lower profitability in parts of the project portfolio. In contrast, the Sea-Based Technology (SBT) segment maintained solid performance with a healthy product mix.
In Q4 2023, LBT revenues totaled NOK 142 million (USD 13.5 million, EUR 12.5 million), a decrease of NOK 21 million (USD 2 million, EUR 1.9 million) compared to the previous year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) and EBIT for LBT were NOK -15 million (USD -1.4 million, EUR -1.3 million) and NOK -18 million (USD -1.7 million, EUR -1.6 million), respectively, compared to NOK -27 million (USD -2.6 million, EUR -2.4 million) and NOK -28 million (USD -2.7 million, EUR -2.5 million) in Q4 2022.
On the other hand, SBT revenues in Q4 2023 totaled NOK 618 million (USD 58.8 million, EUR 54.6 million), up from NOK 592 million (USD 56.3 million, EUR 52.3 million) reported in the same period the previous year.
The restructuring and rightsizing process that AKVA implemented to adapt to the resource tax concluded in Q4, ensuring annual estimated cost savings.
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