The positive momentum maintained at Royal Greenland
Profit before tax grew to DKK 50m in the first half of 2018 despite increased fisheries taxes in Greenland. The positive development is attributed to good performance in all core products.
The positive development reflects the strength of The North Atlantic Champion strategy.
Turnover declined by 7% as a result of the non-renewal of a trading order for a major European retail customer due to low margins.
However, Royal Greenland’s core products – shell-on prawns, cooked&peeled prawns, Greenland halibut and snow crabs – are all delivering satisfactory profitability. Cooked&peeled prawns and snow crabs have delivered particularly strong performance.
“Unlike recent years, where sales of cooked&peeled prawns were marred by declining prices and the weakening of the British Pound, we successfully increased sales during the latest period at increasingly higher sale prices,” says CEO Mikael Thinghuus.
It is important to note that Royal Greenland’s profit over the year is very seasonal, with the majority of earnings coming in the second half.
Increased debt and improved equity ratio
Interest-bearing debt increased due to growth in working capital and investments. Interest-bearing debt amounts to DKK 1,653 million, compared to DKK 1,480 million in the same period last year. Meanwhile, equity ratio has improved from 31.8 in the same period last year to 33.6 in the current year.
The company will be launching two newly built vessels in 2019 – one in May and the other in November – to replace existing trawlers. One of the vessels is a trawler for cod and Greenland halibut fishing, and will also produce fishmeal and fish oil. The other vessel is a combination trawler for prawn and Greenland halibut fishing.
Expectations for 2018
Our expectations for 2018 are for a continuation of the positive development, which the company has been undergoing for the last seven years.
However, increased fisheries taxes and exchange rate developments are expected to result in slightly lower pre-tax profits in 2018 than in 2017.
For additional information, contact CEO Mikael Thinghuus on mobile +45 50 89 30 00.
Download the interim report for 2018