Redundancies have been made at Bakkafrost which the company says is directly due to a decrease in harvest volumes and the new Faroese revenue tax.
In total, 140 employees in Value Added Production (VAP) related areas have been made redundant. The company said it has had to adjust its strategy for contracted VAP to reduce contract exposure for 2024.
”We hoped that we could agree a sufficient amount of long-term contracts, so we could keep all our employees. But the conditions have changed, especially since the new revenue tax has been implemented,” said Regin Jacobsen, CEO, Bakkafrost.
”We had also hoped that new political changes would come in time as promised, but unfortunately we were let down.”
Change in tack
This year has been trying for Bakkafrost.
Back in July, the company advised that preliminary results of its consolidated accounts for the second-quarter 2023 indicated a lower-than-expected operational earnings before interest and taxes (EBIT).
With that it disclosed that an operational EBIT of around DKK 353 million was expected for the period, compared with DKK 587 million in Q2 2022.
It said the main drivers for the results are the extraordinarily low harvest volumes in the Faroese farming segment and the reduced average weight of the harvested fish.
Additionally, the Scottish farming segment had lower harvest weights in Q2, compared to the previous quarter, primarily caused by biology-led harvest at some sites and early harvest at some sites.
Next year there will also be more challenges.
For 2024, Bakkafrost has signed contracts covering around 9% of the expected harvest volumes in the Faroe Islands and Scotland combined, compared to 22% at same time last year.
