The strategy is working: continued progress for Royal Greenland – annual report 2017
With revenues of DKK 5.6 billion, Royal Greenland delivered a sound profit before tax of DKK 253 million despite negative exchange rate developments of DKK 80 million in the second half-year.
Shell-on prawns, Greenland halibut and snow crab performed strongly, while the first nine months of the year were challenging for cooked & peeled prawns.
Asia and Scandinavia performed particularly well, emphasising the strength of Royal Greenland's product and market portfolio and its unique position in the value chain.
With effective fisheries and a strong market, shell-on prawns exceeded last year's record-high result, and Royal Greenland's position as global market leader for Greenland halibut was further strengthened with a sales growth of 5 per cent and significantly improved earnings in Japan.
“As part of our North Atlantic Champion strategy plan, we have invested in expanding the facilities in Uummannaq and Aappilattoq for a total of DKK 70 million, and have upgraded Royal Greenland’s production capabilities to enable a higher degree of processing in Greenland. This type of investments will be continued elsewhere in Greenland during the coming year, and will further strengthen Royal Greenland's position as market leader for Greenland halibut,” says Royal Greenland's CEO Mikael Thinghuus.
From a base in Quin-Sea Fisheries, snow crab activities continued the positive development from 2016 characterised by high demand at attractive prices in the key markets, Japan and the USA. In accordance with the strategy, snow crab has developed into an important product category for the Group.
“On the other hand, North Atlantic cod is still an unprofitable activity for Royal Greenland. Nonetheless, we have decided to maintain the investment in the Nutaaq project in Maniitsoq, which we have further optimised in order to increase the proportion of high-quality products, and thereby improve the financial performance,” says Mikael Thinghuus.
Despite a high level of investment, Royal Greenland’s interest-bearing debt is unchanged at DKK 1.3 billion. During the next few years the investment level will continue to be high, especially in view of the acquisition of the two new trawlers, which will strengthen the Group's future earnings.
Equity amounts to DKK 1.4 billion, with an increased equity ratio of 33 per cent. Equity has increased by 30 per cent over the last five years.
In accordance with the company’s dividend policy, a dividend of DKK 64 million will be paid to the Government of Greenland, equivalent to 50 per cent of the profit for the year after tax. During the last five years, Royal Greenland has thus paid DKK 555 million to the Government of Greenland as dividends and repayment of subordinate loans.
The number of employees (FTEs) is 2,533, of whom 54 per cent are employed in Greenland. The factory in Koszalin, Poland, was sold towards the end of the financial year, so that Greenland's actual share of employees is 63 per cent.
In 2017, Royal Greenland continued its longstanding training programme in Greenland organised under Royal Greenland Academy. Courses are held at four levels: operations manager, factory manager, middle manager and production employee. In total, 753 Greenlandic employees, or 55 per cent of the full-time employees in Greenland, attended qualifying courses in 2017.
Furthermore, an employee satisfaction survey in 2017 covering the Greenlandic part of the business showed a high job satisfaction rate among employees. The analysis assessed the company's reputation, cooperation with other departments and employees, and job content. Royal Greenland achieved a high score, and above the average for the other large Greenlandic companies.
The positive development of Royal Greenland during the last six years will continue in 2018 with further strengthening of our North Atlantic core activities.
The financial results, however, are challenged by the combined effect of higher fisheries taxes in Greenland, lower exchange rate levels for central sales currencies, and expected lower quotas in Newfoundland.
The result is therefore not expected to be at quite the same level as in 2017.
Despite significant investments, the interest-bearing debt is expected to be at the same level as in 2017.
For further information, please contact CEO Mikael Thinghuus on tel. no. +45 50 89 30 00 (mobile).