High cod prices brought Norwegian fleet highest profit margins on record in 2016

In January 2017 the Norwegian directorate of fisheries found that Norwegian vessels had never previously achieved a higher overall total value than in 2016. Now its profitability survey has revealed that profits also set a new record high according to the news site undercurrentnews.com

For the third consecutive year, operating income for the Norwegian fishing fleet increased. Total operating revenues increased by just under NOK 1.9 billion from 2015 to 2016, to NOK 17.5bn ($1.9bn). Operating costs were NOK 13.5bn, which resulted in an operating profit of NOK 4bn.

“The increase in total operating income and operating profit resulted in an operating margin of 22.9% in 2016. This is the highest operating margin we have measured for the fishing fleet. In 2015, the operating margin was calculated at 18.5%,” said Liv Holmefjord, CFO with the fisheries directorate.

Most fishing groups improved profitability in 2016, and for bottom fisheries, a high firsthand cod price seems to have yielded good results.

The average firsthand price of cod increased by 15% between 2015 and 2016. At the same time catch quotas remained fairly stable, which gave a historically high firsthand value for cod in 2016.

Cod catchers saw an operating margin of 28.3% in 2016, which represented an increase from 24.7% in 2015.

For conventional sea fishing vessels, average operating revenues were at the same level as in 2015, while operating costs increased somewhat. The average operating margin thus became somewhat lower in 2016 than in 2015, but remained at a high level compared with previous years. The operating margin for this shipping group fell from 15.7% in 2015 to 12.7% in 2016.

Conventional coastal fishing vessels saw the highest percentage increase in average operating revenues.

“Despite the fact that operating costs also increased, this vessel group achieved a historically high operating profit. Operating margin increased from 12.5% in 2015 to 17.8% in 2016.” The larger coastal vessels achieved a better operating margin than the small ones, said Holmefjord.

 

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