Current market conditions are difficult, but despite this, Royal Greenland has succeeded in maintaining its market position with positive development which has brought about improved revenues. This also applies to major and important markets such as Germany and Japan, most recently confirmed by the award of major contracts in the German retail segment. The lower turnover is primarily due to the divestment of unprofitable activities.
To strengthen its market position the company recently acquired a lumpsucker roe factory in Germany, and has thus strengthened sales of the Greenlandic product.
Work is constantly being done to improve Royal Greenland’s competitiveness, e.g. through investments in processing and production automation. A complete upgrade has recently been carried out of the prawn processing plant in Ilulissat, which is now one of the most efficient prawn factories in the world. Similarly, work is being done on the distribution side to streamline logistics, reduce costs and improve competitiveness.
Fixed costs are and will continue to be in focus, and have been reduced by 12% in relation to H1 last year.
The company’s financial latitude has improved, partly as a result of the capital injection in the summer of 2009, and partly as the result of a significant positive cash flow from operations. Interest-bearing debt has been reduced by DKK 549 million, and the company’s equity ratio comprises 29%, including the subordinate loan capital.
Outlook for the company
In continuation of the initiatives launched by the management, and in collaboration with the owners, a five-year plan has been drawn up which, on the basis of the existing Group and business structure, is aimed at the further development of the company to the benefit of the owners and the local communities within which the company operates.
Royal Greenland is thus in the process of creating a platform for the future. Considerable work still lies ahead to exploit the company’s market position and streamline its business, and thereby achieve improved earnings while maintaining a focus on reducing the interest-bearing debt.
Within the framework created, Royal Greenland will work in a conscious and forward-looking manner to consolidate its position as one of Europe’s major seafood companies. Greenlandic products and the processing of these will occupy a prominent position in this development.
For the current year, the expectation is to turn last year’s deficit of DKK 200 million into a zero result.