Norwegian cod-farming company Norcod is contemplating a private placement to raise working capital and cover higher-than-expected operating costs experienced in Q4 2023.
The Trondheim, Norway-based company announced in its Q4 results it is contemplating a NOK 100 million to NOK 150 million (USD 9.5 million to USD 14.2 million, EUR 8.7 million to EUR 13.1 million) private placement to “cover the company’s working capital need.” As of 27 February, the company said via an announcement issued through the Oslo Børs it has already secured NOK 124.9 million (USD 11.8 million, EUR 10.9 million) in pre-commitments toward the private placement.
In its FY2023 results, Norcod achieved both higher revenue and dealt with higher costs. For the year, the company posted revenue of NOK 269 million (USD 25.5 million, EUR 23.5 million), up 58 percent from the NOK 171 million (USD 16.2 million, EUR 14.9 million) it recorded in FY 2022. The increased revenue came from larger harvests, with the company harvesting 6,155 metric tons (MT) whole fish equivalent of farmed cod during the period – up 60 percent from the 3,837 MT it harvested in FY 2022.
Larger revenue and bigger harvests did not translate to higher profits, however. The company posted an operating loss of NOK 233 million (USD 22.1 million, EUR 20.4 million) – excluding one-time costs of NOK 21 million (USD 2 million, EUR 1.8 million) – compared to the NOK 123 million (USD 11.7 million, EUR 10.7 million) loss it posted in 2022.
Part of the increased losses came from higher operating costs; each kilogram of cod farmed cost Norcod NOK 48.27 (USD 4.58, EUR 4.22) in Q4 2023, up from NOK 43.52 (USD 4.13, EUR 3.80) per kilogram during the same period of 2022.
“The increase is mainly explained by general price increases on feed, labor, and raw materials, as well as increasing interest rates and currency, partly offset by improved biology and feed factors,” Norcod said in its financial update. “The company will continue its diligent work to streamline processes and optimize biology to cut costs further.”
Despite the higher costs and losses, the company is still ...
