Iceland Seafood International hf

Inflation and high volatility impacted Iceland Seafood's operation in Q1 2023 - Seite 2

With IS UK being classified as an asset held for sale, the VA N-Europe division consists solely of Oceanpath’s Group operation in Ireland. Steep price increases in salmon negatively impacted sales volume in the quarter. Price increases offset the impact of lower volume, leading to a slight growth in sales in Euro terms. These increases in salmon prices caused similar challenges as in the same period last year, as it takes time to push cost increases through to customers. Loss before tax in the period was €0.2m compared to €0.4m loss at the same time last year. Based on current forward prices, the price of salmon peaked in March this year, compared to the beginning of May 2022. The outlook for the remainder of the year is good, as salmon prices are expected to come down and stabilise.

The S&D division had an excellent start of the year, with sales and profitability increasing from the previous year. Good sales of pelagic products drove strong sales of IS Iceland at the beginning of the year. The capelin season was excellent and improved sales into Eastern Europe have helped the sales growth. Price increases from the same time last year have also resulted in sales growth.

As in the financial statements for 2022, IS UK is classified as an asset held for sale in the Q1 2023 accounts. The loss from that operation of €2.5m was in line with the budget for the period. Significant steps have been taken towards improved operation in the period, in line with what was previously communicated. The process of recovering inflationary cost has come through as planned, production efficiencies and throughput have increased with new equipment installed at the beginning of the year, and various input costs have stabilized and have been fixed for the remainder of the year. However, a negative market trend where volume has declined due to significant consumer price increases has a significant negative impact on sales. It needs to be seen if these impacts are temporary or long-term, but this will delay the point where IS UK will reach a positive cash flow. The revised management plan assumes a positive EBIT from Q4 onwards but a negative PBT of £4.0-4.5m for the year.