28 April 2020

In excess of €17m long term financing secured in Spain whilst Q1 results were impacted by Covid-19

Previously announced Outlook for 2020 is therefore withdrawn.  

As announced on March 16th the outbreak of Covid19 and actions taken by governments in key markets to control the outbreak, has impacted sales and profitability of Iceland Seafood International („Iceland Seafood“) from mid-March and will continue to do so in the coming weeks and months.  This applies especially to the foodservice sector in Europe, which to a large degree has been closed.  In contrast retail sales are strong and are expected to remain resilient. Iceland Seafood’s strong position enables the company to manage the situation effectively.  Among actions that the company is focussing on are the following: 

  1. Implementing appropriate contingency plans within our group businesses, focussing on health and safety of our employees and to secure the continuity of our operations
  2. Tightening our risk management controls, with focus on the key assets on the balance sheet, inventories and receivables.  
  3. Secure liquidity and ongoing funding of our operation in cooperation with banks in Iceland and Spain.  As part of this the Group has secured in excess of €17m new long-term funding for the operation in Spain with Spanish banks.  The Company has also taken measures to increase funding headroom for the remaining part of the operation with its banking partner in Iceland. This borrowing does not further restrict the company than the current borrowing does.
  4. Utilise Iceland Seafood strong position to leverage opportunities that come up in the situation. This applies to both short term opportunities related to sourcing and marketing and longer-term strategic opportunities. 

Preliminary draft of Q1 2020 financials indicate a Normalised PBT of €2.6m for the period compared to €3.5m for same period last year. As informed in previous announcement the most notable impacts were on sales and profitability of the HORECA and Foodservice sectors, especially in Southern Europe. Sales to retail, especially in Northern Europe have performed adequately. 

Whilst it is still uncertain how much and for how long  sales and profitability will be impacted by the situation, the Group will be negatively impacted in the coming weeks and months.  Due to these negative short term impacts the previously announced Outlook range for 2020 Normalised PBT is withdrawn. Iceland Seafood will communicate further on the matter and provide an update on profit outlook for the year, as less ambiguity will be on the development of Covid-19 and the related restrictions. 

Further information: 

bjarni.armannsson@icelandseafood.com 

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