Royal Greenland's half-year results for 2024 show signs of stabilization despite challenges
Royal Greenland's half-year results for 2024 show signs of stabilization despite challenges
In the first half of 2024, Royal Greenland initiated an ambitious turnaround plan called "Back-to-Black" in response to the financial challenges of 2023. This plan aims to achieve revenue and cost improvements of at least DKK 100 million, with full effect in 2025. The plan includes significant measures such as staff reductions, centralization of sales support, procurement savings, and optimization of production and logistics costs.
Half-Year Results and Market Development
The half-year pre-tax result for the period from January 1 to June 30, 2024, stands at (DKK 59) million compared to (DKK 113) million last year. Despite this, the result is still considered unsatisfactory, but the action plans in place are expected to have a positive impact in the second half of the year.
Revenue increased by 3.7% to DKK 2.64 billion, indicating stabilization despite continued challenging market conditions. However, the result was negatively impacted by DKK 90 million compared to last year, mainly due to lower earnings in the pelagic segment, which was affected by the lack of a capelin quota in 2024 and a negative adjustment in inventory-related indirect production costs due to lower inventory levels.
Progress in Core Business
Royal Greenland’s core species showed progress in 2024. The market for cooked & peeled shrimp has turned around with increased sales and stable earnings in key markets such as Scandinavia, Germany, and the UK. Fishing, market conditions, and earnings in snow crab have normalized after two difficult years, and the Japanese market is showing improvement. While halibut sales are lower, trawler-based products are compensating in terms of earnings, and the cod market has recovered after a challenging 2023, which had been affected by cheap Russian cod.
Financial Development and Liquidity
"Back-to-Black" is not only focused on improving operational profitability but also on reducing working capital and net interest-bearing debt. Working capital has been reduced by DKK 568 million, and net interest-bearing debt has decreased by DKK 376 million to DKK 2.9 billion.
Outlook for the Second Half
Although 2024 still presents challenges, including uncertainty around catch rates and the Chinese market, the result is expected to improve in the second half of the year. "Back-to-Black" will not have its full effect until 2025, but early results from the plan are already showing positive signs of stabilization.
CEO Susanne Arfelt Rajamand states: “We are seeing the first results of our turnaround plan, but the path to a healthy economy still requires hard work and focus. However, I am optimistic about our ability to navigate through these challenging times and return to profitability.”
See this link, for further information
For further information, contact:
Group Communications Director Merete Lindstrøm
Email: meli@royalgreenland.com
Phone: +299 281820
