Frozen seafood and fishing company Royal Greenland achieved record earnings of DKK 335 million before tax while generating sales of more than DKK 7 billion during the recent 15-month period business cycle, as a result of the changed financial year which will now follow the calendar year going forward. But even in view of the extended operating period, on a comparable basis it represents a record profit for the Nuuk, Greenland-headquartered group.
On a 12-month basis, the company posted sales growth of 14% to DKK 5.4 billion, which means that Royal Greenland’s revenue is now back to the levels preceding the sale of the Wilhelmshaven business in Germany, which at the time represented 40% of the group’s total volume.
The 12-month profit before tax is approximately DKK 20 million higher than in the previous financial year, which at the time was also a record high profit for the company.
Royal Greenland’s strategic platform, as defined in the strategy “The North Atlantic Champion,” now comprises coldwater shrimp, halibut and snow crab. The acquisition of Quin-Sea Fisheries has improved the company’s market access to North America for both Canadian and Greenlandic products. In the future, North America is expected to be a primary market for the group, on a par with Asia, Scandinavia and Europe.
Two new trawlers have been commissioned by Royal Greenland to replace factory trawlers Sisimiut and Quaqqatsiaq. Delivery is expected in 2019.“Royal Greenland is one of the largest companies in a highly fragmented North Atlantic fishing industry and the market leader in shrimp, halibut and lumpfish roe,” said CEO Mikael Thinghuus. “Our size enables a vertically-integrated approach to all major world markets in our core species, based on long-term and trusting partnerships with both suppliers and customers. This is reflected in a vision to be closest to the fish, closest to the customers and closest to the consumers.”
The profit for the year after tax amounts to DKK 173 million, which would normally trigger a dividend payment of DKK 87 million to owners, corresponding to 50% of the profit. However, as a result of the strong return on strategic investments, a recommendation will be presented for approval by the annual general meeting to issue an ordinary dividend of DKK 100 milliion.
Strategic Investment
Royal Greenland has decided to replace the factory trawlers Sisimiut and Qaqqatsiaq. Two new vessels, which represent the largest investment in the company’s recent history, will be delivered in 2019.
The high level of investment resulting from the strategic initiatives is reflected in the somewhat higher net interest-bearing debt, which at year-end amounted to DKK 1.3 billion, compared with DKK 1.1 billion in the previous financial year. Meanwhile, Royal Greenland remains a financially strong group, with equity at DKK 1.4 billion and a solvency ratio of 32%.
The outlook for 2017 is a continuation of the company’s positive development over the past six years. A higher 12-month profit is expected in 2017. As investments will also remain high, net interest-bearing debt is expected to increase during 2017 to around DKK 1.6 billion.
The earnings performance is highly dependent on developments in wild whitefish populations and associated quotas, particularly those in Greenland and Canada upon which Royal Greenland depends. Other factors include general developments in the global economy and developments in sales prices of the company’s core products.
