Iceland Seafood International hf: Positive Turnaround in 1H 2024

Iceland Seafood International hf Reports Positive Turnaround

Iceland Seafood International hf has shown significant improvement in its financial performance for the first half of 2024, with a notable increase in net margin and a decreased net loss compared to the previous year.

Key Financial Highlights

Net Margin for 1H 2024: €19.1 million, up €2.2 million.

Normalised Profit Before Tax: €1.1 million positive, compared to a loss of €0.8 million in 1H 2023.

Net Loss: Improved to (€0.7 million) from (€15.3 million) in 1H 2023.

Sales for 1H 2024: €212.0 million, a 4.6% decrease from the same period in 2023.

EPS for 1H 2024: Negative €0.0238 per thousand shares, improving from negative €0.5569 in 1H 2023.

Total Assets: €253.3 million, down €1.5 million; equity ratio at 28.6%.

2024 Normalised PBT Outlook: €5.0 million to €7.0 million.

Quarterly Performance Insights

Group sales for the second quarter reached €98.2 million, reflecting a slight decrease of 1% compared to the same period last year. The normalised pre-tax loss of (€0.7 million) in the quarter signifies an improvement of €1.1 million over Q2 2023.

The VA S-Europe division demonstrated sales of €51.2 million in the second quarter, representing an 8% increase from the same period in 2023. Nevertheless, sales for the year's first half declined by 6% in value and 7% in volume compared to 1H 2023. The division's normalised pre-tax profit was €0.1 million, up €1.3 million from Q2 2023, despite slower sales of premium products due to the economic climate.

Division Performance Details

The VA N-Europe division recorded sales of €13.8 million in Q2, a 3% rise from the previous year. The total sales for the first half were €26.7 million, slightly higher than €26.4 million in 2023. Higher-than-expected salmon prices early in the quarter affected sales volume, while the pre-tax loss in Q2 was (€0.1 million), down from a profit of €0.2 million in the same quarter last year. Current market trends indicate stable salmon prices for the remainder of the year.

The S&D division had a robust performance driven by strong sales from Iceland, with noteworthy contributions from frozen-at-sea, halibut, and pelagic products.

Future Outlook

Looking ahead, based on the Q2 results and current trading, the normalised PBT outlook for 2024 remains between €5.0 million and €7.0 million. Market predictions suggest that cod prices will remain high until fall, while salmon prices are anticipated to stabilize throughout the year.

CEO Statement

Ægir Páll Friðbertsson, CEO, commented on the company's performance, noting the alignment with traditional market conditions. He highlighted the impact of the US ban on Russian fish prices, especially regarding HG cod from the Barents Sea. Despite high salmon prices leading to some operational losses, the year-over-year improvement in salmon operations is promising. Plans to expand Icelandic salmon marketing through the company's network are underway amid growth in local farming.

The CEO further expressed concerns about the uncertain economic landscape impacted by high interest rates and inflation. He emphasized the focus on enhancing operational performance and capital structure as the company proactively addresses challenges in the seafood sector.

Investor Meeting

The company will host an online investor meeting to discuss Q2 and 1H results, providing insights into performance and future strategies.

Frequently Asked Questions

What are the key highlights of Iceland Seafood International's 1H 2024 performance?

The company reported a net margin of €19.1 million, a positive normalised profit before tax of €1.1 million, and an improved net loss of €0.7 million compared to the previous year.

How did the sales figures compare year-on-year?

Total sales for 1H 2024 amounted to €212.0 million, representing a 4.6% decrease compared to 1H 2023. However, Q2 sales showed a minor decrease of 1% versus the prior year.

What impact did market conditions have on the different divisions?

The VA S-Europe division experienced an 8% increase in Q2 sales, while the VA N-Europe division had a slight rise in first-half sales. However, market strains were evident in premium product sales and salmon pricing dynamics.

What is the outlook for the rest of 2024?

The normalised PBT outlook ranges from €5.0 million to €7.0 million, with expectations for stable salmon prices and high cod prices for the foreseeable future.

How is the company preparing for future challenges?

The focus is on optimizing capital structure and enhancing operational efficiency, as well as exploring growth opportunities within the seafood industry.

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