The energy crisis, inflation and the conflict in Ukraine have impacted revenues at Royal Greenland.
Half year profits before tax show a loss of DKK 113 million (€15.16 million) compared with a positive figure of DKK 96 million (€12.88 million) for the same period in 2022, which the company has described as ‘unsatisfactory’.
However, the picture is expected to improve and a figure of at least DKK 100 million (€13.41 million) before the end of the year is forecast.
“Despite the volatile environment, significant employee efforts are being made across all functions of the company,” said chief executive, Susanne Arfelt Rajamand.
“Once again, our diversification strategy shows that, across markets and categories, we have a balance in the business that enables us to come out of the overall financial year satisfactorily.”
Royal Greenland’s most lucrative market – prawns – has been dealt multiple blows from low exchange rates across Norway and Sweden, a sluggish European economy, Brexit and the war in Ukraine which has halted exports to Russia.
Snow crab, too, has been impacted by the war in Ukraine as western sanctions have increased exports of Russian snow crab to Asia, reducing the opportunity for Royal Greenland to achieve a good price in Japan.
Significant cost increases
Direct costs have been DKK 240 million (€32.19 million) higher this year so far thanks to inflation and the energy crisis. Sale price rises have gone some way to mitigating these extra costs but a deficit of around DKK 110 million (€14.75 million) remains.
The outlook is positive however as Royal Greenland moves into its peak season. Earnings in the second half of the year are expected to normalise and a positive pre-tax figure of at least DKK 100 million (€13.41 million) is forecast for the year as a whole.
