AKVA group completed second quarter with growth in revenue. The revenue in second quarter of 2018 ended on 627 MNOK (537 MNOK) with an EBITDA of 52 MNOK (65 MNOK). Second quarter EBITDA margin was 8.3% (12.1%). The Net Profit decreased to 19 MNOK compared to 27 MNOK in Q2 2017.
AKVA group is ending the quarter with an order backlog of 1.3 BNOK.
A half-yearly dividend of 0.75 NOK per share will be paid out in September 2018.
Cage Based Technology (CBT)
In the Nordic region, the order intake ended at 219 MNOK (258) in the second quarter. Despite lower margins, the Nordic region continue to experience high activity in the quarter. Investments in new manufacturing lines at Helgeland Plast, as well as ramping up the Marine Service business in Norway has impacted the margins negatively. Margins in the Nordic region are impacted by 8 MNOK in acquisition cost related to Egersund Net AS.
The high market activity in Americas continues and the region had an order intake of 139 MNOK in the quarter, compared to 128 MNOK in Q2 2017. Following the continued good activity and high order backlog, revenues in Americas ended at 125 MNOK compared to 61 MNOK in Q2 2017.
EME (Europe & Middle East) continued high activity, and revenue increased with 67% compared to Q2 2017. The operations in Turkey, Greece, Spain and Middle East have shown another profitable quarter.
Both AKVA group Software and Wise ehf ends the quarter with lower margins and EBITDA compared to the same quarter last year. This is mainly due to less development work in Q2 2018 being capitalized, compared to Q2 2017.
As noted in a stock notice of January 19th, we are currently conducting a strategic evaluation of Wise lausnir Ehf with the objective to realize the potential of the business going forward. No conclusions have yet been made.
Land Based Technology (LBT)
Revenues and margins are up year on year for the land based segment. The order intake in Q2 2018 was 87 MNOK compared to 303 MNOK in Q2 2017. Q2 2017 order intake was heavily influenced by two larger contracts signed for a total of of 183 MNOK.
Decisions for larger Land Based orders in Norway continue to be pushed out in time and no such orders have been recorded in the quarter. However, several medium sized Land Based orders have been signed in Scotland, Chile and the Faroe Islands.
The balance sheet remains strong. Working capital as a percentage of 12 months rolling revenue is 8.2% (6.7%). The twelve month average working capital is 6.7%. Cash and unused credit facilities amounted to 418 MNOK at the end of Q2 (197 MNOK). Total assets and total equity amounted to 1,881 MNOK (1,606 MNOK) and 499 MNOK (473 MNOK) respectively, resulting in an equity ratio of 26% (29%) at the end of Q2.
Atlantis Subsea Farming AS
In partnership with Sinkaberg-Hansen AS and Egersund Net AS, AKVA group ASA established Atlantis Subsea Farming AS on February 1st, 2016 with the purpose of developing submersible fish-farming facilities for salmon on an industrial scale. Atlantis Subsea Farming AS applied for six development licenses to enable large-scale development and testing of the new technology and operational concept.
On February 22nd 2018 The Directorate announced that the Company has been granted one license. Atlantis Subsea Farming AS is now in a technology testing and planning phase with regards to the execution of the project.
Dividend of NOK 0.75 per share to be paid out in Q3 2018
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. According to AKVA group ASAs' dividend policy a dividend of 0.75 NOK per share will be paid out in September 2018. Total dividend payout in September 2018 will be 25.0 MNOK.
We have experienced continued good activity across all regions and segments in the second quarter of 2018. The order intake in Q2 2018 was 471 MNOK (778 MNOK). The order backlog at the end of Q2 2018 was 1,274 MNOK (1,318 MNOK). MNOK 449 of total order backlog at end of Q2 relates to land based technology.
Although strong revenue growth and the lack of larger Land Based orders resulted in a decline in the order book in the quarter, the order backlog is still solid at 1,3 BNOK.
The pipeline of Land Based orders are still strong and we are ramping up the organization to continue to improve our ability to win within the segment.
The activity in the Nordic cage based segment as well as within services continues to be good, service and after sales are high priority in our strategy.
The market conditions in Chile are expected to remain favourable and we have implemented improvements in the operations and product portfolio, which further strengthen our competitive position and presence in that market.
The salmon farming industry expects growth in eastern Canada and Iceland and we are in the process of positioning ourselves to participate in the expected growth in these markets. This work has progressed significantly, especially for Canada in the quarter.
The strategy to focus on the "Non-Salmon" activities around the Mediterranean Sea, has yielded good results in 2017 and in the first half of 2018. We will continue to develop and invest in these markets going forward.
The positive financial development has strengthened the Group, and during 2017 we have also carried out an extensive strategic review process, focusing on all aspects of the business to further improve our cost position, product offerings and ability to deliver sustainable aquaculture solutions to our customers.
The acquisition of Egersund Net is expected to close by August 31. The transaction will significantly impact the financial numbers of AKVA group, we refer to the Information Memorandum published on July 23 for further information. Work to plan for the potential integration of the two organizations has started.
About AKVA group
AKVA group is a technology and service partner to the aquaculture industry worldwide. The company has 1 012 employees, offices in 11 countries and a total turnover of NOK 2.1 billion in 2017. 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 cage farming and land based aquaculture. AKVA group is recognized as a pioneer and technology leader through more than 40 years. The Corporate Headquarter is in Bryne Norway.
Dated: 15 August 2018
AKVA group ASA