But its efforts are being hampered by a new problem - global currency fluctuations. The company said the recent sharp increase in the strength of the euro had resulted in a currency exchange loss of 7.5million euros.

The first quarter sales totalled 321.1million euros (around £250million), a fall of 11 per cent on the corresponding period last year when currency changes were taken into account.

The EBITDA (earnings before interest, taxes and depreciation) amounted to 11.8 million euros (about £9.3million) while the operating profits came out at 7.3million euros - or £5.8million.

But the group, which owns Grimsby-based Coldwater Seafoods and Seachill, is managing to dramatically reduce its overall debts, which some analysts says needs to done if it is to make a significant recovery. The interest bearing liabilities this quarter decreased by some 37million euros (almost £30million) and the group's total debts were down by 57.1million euros - or more than £45million.

Icelandic Group's chief executive Finnbogi A. Baldvinsson said: "Icelandic Group's operation was in line with management's expectations in the first quarter of 2008. This is certainly a positive sign, however the variance is due to financial items.

"We currently operate in many different markets and currency exchange development has a substantial effect on our financial results. Currency loss in the quarter amounted to 7.5 million euros compared to 55,000 euros in the first quarter of 2007, however interest bearing liabilities decreased by 37 million euros which is partly due to the strengthening of the Euro. We have achieved to decrease the operational cost of the group substantially or by 17 per cent in the quarter compared to first quarter last year."

He added: "The convertible loan, which has been granted to the company, makes us ready for the large projects which awaits us. I'm sure that the operation will deliver better results later in the year."

The Icelandic Group is somewhat more unusual than most other international seafood groups in that it is a holding company controlling an international network of production and marketing companies selling seafood products on the international markets with emphasis on frozen fish.

In several markets, the company enjoys a prominent position of its Icelandic brand, especially within the food service sector. The company is also a major supplier to the retail sector through its branded or private label production.

Last year, it reduced its cost base with the closure of a large plant in the United States, concentrating production at another US plant. Next month it is about to shut its Coldwater plant at Redditch in the UK with the loss of almost 200 jobs. Production is being moved to Coldwater Grimsby.

Trade unions at the Redditch plant have laid the blame at the door of Marks & Spencer by ending a contract which accounted for 80 per cent of the factory's total output. A spokesman for the union Unite described the decision as "disastrous" and added that M&S had some ethical responsibility to the 180-strong workforce who had done their best to ensure good quality.

M&S said the decision to drop Redditch as a supplier was not an easy one but was taken 'after long and careful consideration'.

www.fishupdate.com is published by Special Publications. Special Publications also publish FISHupdate magazine, Fish Farmer, the Fish Industry Yearbook, the Scottish Seafood Processors Federation Diary, the Fish Farmer Handbook and a range of wallplanners.

Printer friendly version

Email this article to a friend