AKVA group ASA: Q2 2024 financial reporting

High activity level and improved profitability

AKVA group delivered record high quarterly revenue in Q2 of MNOK 1,014 (940), an increase of 8% compared to Q2 2023.

EBITDA increased from MNOK 86 in Q2 2023 to MNOK 110 in Q2 2024.

Total order intake of MNOK 888 (1,840) in Q2 2024 supported by acceptable order intake of MNOK 713 in Sea Based. Order backlog was BNOK 2,4 at the end of June 2024.

Acquisition of 100% ownership in Observe Technologies was completed start of Q3.

The activity level in the second quarter was high with record high quarterly revenue and acceptable order intake. The high activity level is driven by the Sea Based business segment and positive momentum in the Nordic market. The market for Land Based is still slow and AKVA has not been awarded any new significant contracts so far in 2024. The outlook for the post smolt market in Norway is still slow due to the resource tax but is expected to improve gradually going forward.

Profitability improved significantly in the second quarter compared to last year, and the improved profitability is primarily related to the Sea Based business. The profitability in Land Based is still impacted by low activity level and to some extent closing of the NOAP phase I project. The Digital business segment has experienced great revenue growth the last few years, but the current cost base is still high compared to the current activity level. The profit margin in Digital is expected to improve following the acquisition of Observe Technologies.

Sea Based Technology (SBT)
SBT revenue for Q2 2024 ended at MNOK 842 (733). EBITDA and EBIT for the segment in Q2 ended at MNOK 106 (82) and MNOK 68 (46), respectively. The related EBITDA and EBIT margins were 12.6% (11.2%) and 8.1% (6.3%).

Order intake in Q2 2024 was MNOK 713 compared to MNOK 690 in Q2 2023. Order backlog ended at MNOK 816 compared to MNOK 817 last year.

The Nordic region experienced an increase in revenue from MNOK 475 in Q2 2023 to MNOK 602 in Q2 2024.

In the Americas region, the revenue was MNOK 156, which is a decrease from 158 MNOK in the second quarter last year.

Europe and Middle East (EME) had a revenue of MNOK 84 in Q2 2024, compared to the revenue of MNOK 100 in the second quarter last year.

Land Based Technology (LBT)
Revenue for the second quarter was MNOK 137 (174). EBITDA and EBIT ended at MNOK -1 (-4) and MNOK -4 (-6), respectively. The related EBITDA and EBIT margins were -0.9% (-2.3%) and -2.7% (-3.7%).

Order intake in Q2 2024 of MNOK 149 compared to MNOK 1,062 in Q2 2023. The high order intake in Q2 2023 was related to the award of the post smolt contract with Cermaq Norway. Order backlog ended at MNOK 1,451 compared to MNOK 1,905 last year.

Digital (DI)
The revenue in the segment was MNOK 35 (33) in Q2 2024. EBITDA and EBIT ended at MNOK 5 (8) and MNOK -2 (-2), respectively. The related EBITDA and EBIT margins were 14.3% (23.8%) and -4.3% (-5.3%).
Order intake in Q2 2024 was MNOK 26 compared to MNOK 89 in Q2 2023. Order backlog ended at MNOK 150, compared to MNOK 162 last year.

Balance sheet
Working capital as a percentage of 12 months rolling revenue is 10.4% (11.6%). Cash and unused credit facilities amounted to MNOK 292 (522) at the end of Q2. Total assets and total equity amounted to MNOK 3,820 and MNOK 1,165 respectively, resulting in an equity ratio of 30.5% (33.1%) at the end of Q2 2024.

Dividend
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. The company has decided not to pay any dividend in the second half of 2024.

Order Backlog
The order backlog at the end of Q2 was MNOK 2,417 (2,884). MNOK 1,451 or 60% of total order backlog at the end of Q2 relates to Land Based Technology (LBT).

Outlook
Salmon prices are expected to remain strong driven by reduced supply.

AKVA expects to see a normalization of the post smolt market in Norway during the second half of 2024 and in 2025.

AKVA is aiming for a revenue of minimum BNOK 3,6 and EBIT of 4-5% in 2024.

About AKVA group
AKVA group is a technology and service partner to the aquaculture industry worldwide. The company has 1 384 employees, offices in 11 countries and had a total turnover of NOK 3.4 billion in 2023. 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 sea farming and land based aquaculture. AKVA group is recognized as a pioneer and technology leader through more than 40 years.

Dated: 16 August 2024
AKVA group ASA

Web: www.akvagroup.com

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