The company, which owns Coldwater Seafoods and Seachill in the UK, says the business environment will continue to be dominated by rising fish prices.

In a presentation to investors in Reykjavik, the company also listed sharply increasing energy costs and volatility in the currency markets as important factors which could affect future performance.

These are issues which are common to the industry in general, both in the UK and Europe, and will be studied closely by fish processors in the UK and Europe.

Icelandic told its shareholders that there was also increased price sensitivity in the marketplace, suggesting that consumers are likely to resist higher prices in the shops.

The presentation was made the day after the company announced first quarter sales totalling 321.1million euros (around £250million) a fall of 11 per cent on the corresponding period last year. The rising strength of the euro against the Icelandic krona and other currencies has played a major part in distorting the profit and loss account this winter.

But shareholders welcomed the news that the interest bearing debt has been cut by 37million euros down to 477million euros. The group has closed its loss making American fish plant in Maryland, concentrating production at its more modern facility in Newport News, Virginia and in the UK the factory at Redditch in the Midlands will close with the loss of around 200 jobs. Production will be moved to Grimsby.

Since the early 2000s Icelandic has also engaged a strategy targeting the development of production and distribution operations in the fast-growing fresh and chilled seafood segments, as consumers increasingly seek out high quality easy-to-prepare and ready-to-eat foods. The focus has been on the potentially lucrative US, European and UK markets.

Icelandic has also expanded its Asian region presence with the purchase of 97 percent of Dalian Three Star Ltd in China. But because of its global network it has been dogged by economic factors that vary from region to region. The rising prices of fish has played a major part in all of these and, as it told investors at the weekend, food and energy inflation present major challenges over the next year or two.

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.

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