Despite steep salmon prices and low purchasing power in Europe, the Group's overall performance this quarter is acceptable

Iceland Seafood International (ISI) positive signs in Q1 2024 after a difficult and unpredictable 2023

ICELAND
Monday, May 20, 2024, 02:00 (GMT + 9)

• Normalised profit before tax for 1Q 2024: €1.9m, compared with €1.0m for 1Q 2023
• Sales for 1Q 2024: €113.8m, down 8% from 1Q 2023
• Net margin for 1Q 2024: €10.5m, up from €9.8m from 1Q 2023
• Net profit for 1Q 2024: €0.1m compared with €2.2m loss for 1Q 2023
• Basic earnings per share (EPS) for 1Q 2024 €0.0025 cents per thousand shares compared to negative €0.0819 cents per thousand shares for 1Q 2023
• Total assets of €272.4m at the end of March 2024 were €17.6m higher than at the beginning of the year. Equity ratio of 26.8% at the end of 1Q 2024, 
• Normalised PBT Outlook range for 2024 is €5.0m – €7.0m

Group sales of €113.8m in the first quarter were down 8% on the same period last year. Normalised profit before tax of €1.9m in the quarter was €0.9m up on 1Q 2023, a positive sign at the beginning of the year.

Sales of the VA S-Europe division were €55.8m in the period, a decrease of 16% from last year. 

Normalised PBT for the Division is €2.1m, up €1.1m from 1Q 2023. Easter came in earlier this year, affecting sales in the month of March compared to a record sale in March of 2023 with easter in the beginning of April. Production volume of Argentinean shrimp was lower than expected due to strikes in Argentina during the quarter, while Ahumados Dominquez showed a 10% growth rate in sales compared to 1Q 2023.

The VA N-Europe division sales were €13.0m, on par with 1Q 2023 €13.1m sales. Higher than-expected salmon prices impacted sales volume in the quarter. 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 €0.1m compared to a loss before tax of €0.2m at the same time last year. Based on current forward prices, salmon peaked in April this year and will remain high during the month of May, with prices expected to come down in June and remain stable throughout the rest of the year.

The S&D division had a good start to the year and was in line with 1Q 2023, with sales and profitability on par with the previous year. Good pelagic products and FAS sales drove strong IS Iceland sales at the beginning of the year despite the absence of the Capelin season.

Based on 1Q results and current trading, the Normalised PBT Outlook range for 2024 is maintained at €5.0m-7.0m. The outlook for our main species is that Cod prices will remain high until fall, while Salmon prices will come down in 2Q and remain stable throughout the year. There are signs indicating a more balanced external environment. We expect all divisions to perform according to budget and do not foresee huge changes in the Seafood sector in the coming months.

 Ægir Páll Friðbertsson, CEO Iceland Seafood International (ISI) : "The first quarter of 2024 is more in line with what we have previously seen as normal conditions in the white fish markets. The start of the year in white fish gives a positive sign for the rest of the year. However, salmon prices were higher in the first quarter than forecasts had assumed, and therefore, there was a loss in salmon activity as it was in 1Q the two previous years. If the forecasts for salmon prices are met, prices should decrease in the third quarter.

After a difficult 2023 due to the burden of our UK operation and challenging external environment, this is a welcome sign in markets for white fish, a step in the right direction we at Iceland Seafood will build  on and keep in mind that economic forecasts indicate, the economic environment of the company's  main trading countries is still and will remain uncertain. 

Our focus in the short term has been to improve the operation of existing business units and the  company's capital structure and review the company's strategy. We know we have great potential to  grow and make more of our company network, solid sales and sourcing network, and a highly skilled  team of seafood professionals. The objective is to strengthen Iceland Seafood further to meet its future  challenges and opportunities, which I believe will benefit the company, owners, and staff.”

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