A strong improvement in performance with 159 million DKK in operating profit and 195 million DKK before tax achieved in the year 2009/10.
The annual profit of (43) million DKK was not a zero result as originally expected and is not satisfactory. A number of restructuring initiatives were carried out, amounting to 39 million DKK, and without these items the result would have been a zero result.
The performance in the second half of the year, with an operating profit of 57 million DKK equivalent to a margin of 2.8% and a profit of 14 million DKK despite the implemented restructuring, emphasizes the positive development. We have managed to maintain Royal Greenland’s market position with good development and corresponding subsequent, particular in Germany, England, Scandinavia, and generally in export sales of Greenlandic products. The lower revenue was mainly due to the termination of unprofitable activities and the declining access to commodities. Sales amounted to 131,000 tons against 145,800 tons a year earlier. The Group has maintained and developed our key market positions in an otherwise flat market.
The improvement in performance has been achieved, among other reason, thanks to an improved operating margin, in particular in the German market. The main explanation for this is a better ability to respond to developments in commodity prices. Falling interest charges due to improved liquidity are another key reason for the overall improvement in performance. Finally, fixed costs before the restructuring costs were reduced by 65 million DKK or 8%.
Improving competitiveness is essential for continued improved operating results. This can be achieved by investment in processing and the automation of production. The shrimp plant in Ilulissat was totally upgraded in 2009/10, and it was recently decided to implement a similar upgrade of the Sisimiut plant and to invest in further processing in Qasigiannguit.
The company’s financial flexibility is satisfactory and the interest-bearing debt in relation to EBITDA was reduced from 19 to 8. Solidity including the equity loan is 28%.
Organizationally, there have been major changes in Royal Greenland over the year. Under the leadership of our new Commercial Director, a new sales and marketing management and organization has been successfully established. There have been improvements in logistics and procurement with new experienced forces brought in from outside. At the end of the financial year a contract was agreed with the future CEO of Royal Greenland.
All of these initiatives coupled with favourable market conditions mean that Royal Greenland feels well prepared and is facing the new financial year with confidence.
