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Good Growth for AKVA in Q4 2013

24 February 2014

NORWAY - AKVA group has had good growth in activity in Q4 2013 fueled by strong order inflow. Total order inflow in Q4 was 467 million NOK. This represents 70 per cent growth compared to Q4 2012 resulting in an all-time high order backlog of 520 million NOK at the end of the quarter.

Financially this has been a quarter with high revenues and good margins in the Group. This was however partly offset by a one off cost in Chile. Total revenues in Q4 2013 was 246 million NOK (174 million NOK) with an EBITDA of 9 million NOK (-4 million NOK).

"We have had a quarter with high activity in all markets except Chile. Outlooks are positive, with the strongest order inflow ever in AKVA group. The high order backlog at the end of 2013, of 520 million NOK, gives us high expectations for the financial performance in the quarters to come. We continue to focus on managing the high activity in the Nordic and the Export segments, at the same time as we now have reduced our exposure in the Chilean market down to an acceptable level," said CEO of AKVA group ASA Trond Williksen.

In the Cage Based Technology (CBT) segment there has been a record high market activity this quarter resulting in the highest order inflow ever. As a consequence this has been a good quarter financially for the CBT operations except in Chile. AKVA's customers in Chile continue to face biological, operational and financial challenges. This has reduced the activity and revenue from this market during 2013 with 46 per cent compared to 2012.

As a consequence, AKVA reduced its financial exposure in Chile significantly by reducing stock and accounts receivables YoY with 46 per cent and 47 per cent respectively.

"In Q4 we had extra cost of 9.2 MNOK in Chile related to layoffs and extra provisions. Our exposure in Chile at year end 2013 is considered as sustainable and acceptable. Export has good deliveries into emerging markets in Q4 with large projects in Russia and Saudi Arabia. Export signed a contract with DunAn in China in Q4 with a total contract value of 23.4 MNOK. Delivery will take place in 2014," said Mr Williksen.

The Software segment continues to deliver stable revenues and solid margins and they continue to invest in new product modules to be launched throughout 2014. These product modules will strengthen the financial performance of the SW segment further. Our three software companies are continuing to contribute with positive margins; AKVA group Software AS (Norway) with an EBITDA margin in 2013 of 30 per cent and Wise Ehf (Iceland) with an EBITDA margin of 12 per cent .

In the Land Based Technology (LBT) segment AKVA had the best quarter ever financially, mostly due to increased revenues and margins in AKVA group Denmark. AKVA group Denmark signed a contract with Fish Farm in Dubai in Q4 with a total contract value of €9.5 million. Delivery will take place in 2014. Good order inflow for LBT in the second half of 2013 is expected to materialise in improved financial performance going forward.

High market activity has materialised in a good order inflow in Q4 with a 70 per cent increase year on year. The order inflow in Q4 2013 was 467 million NOK (279  million NOK). The order backlog at the end of Q4 2013 was 520 million NOK (306 million NOK).

The balance is improved further with good development in our balance sheet - KPIs; Net Interest Bearing Debt, Working Capital and Available Cash. Total assets and total equity amounted to 722.0 million NOK and 338.9 million NOK respectively, resulting in an equity ratio of 46.9 per cent (48.4 per cent ) at the end of Q4 2013.

AKVA maintains its positive outlook in the Nordic market for the coming quarters. Significant growth in salmon prices in 2013 and continued high prices in 2014 drives demand for technology and services.

"The last six months increase in order backlog and continued high activity in the market strengthen this assumption. In Chile the industry and investments continue to be influenced by financial, operational and biological uncertainty. We are monitoring the market closely and have adjusted our operation according to the development. UK and Canada are expected to perform well in the next quarters. Performance in Export is expected to be good in the next quarters due to deliveries of large projects and an interesting prospect mass. Land based is expected to have continued positive development. Good order back log supports this expectation. Effort to build service and aftersales as a key business element in all markets and segments continues to pay off. Including YesMaritime AS in the Group in Q2 2014 is expected to strengthen or service segment further," said Mr Williksen.

TheFishSite News Desk

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