Photo: Royal Greenland

Royal Greenland delivers the best result in its history

Royal Greenland delivers the best result in the company’s history, even though 2020 was affected by Covid-19 and general uncertainty among customers. The profit from primary operations before tax for 2021 sets a new record for the Group's earnings.

The profit from primary operations before tax for 2021 amounts to DKK 326 million (U$D 46M), which is a clear improvement from the previous “normal” level of DKK 250 million (U$D 35M).

Revenue amounts to DKK 5.6 billion (U$D 790M) and reflects an increase of 16% as a consequence of higher sales prices for the core species. The sales price performance is related to the partial normalization of market conditions and thereby sales prices after a year (2020) affected by the pandemic.

In 2021, the markets and supply chains were also affected by Covid-19, but since the world has learned to live with the pandemic to a greater extent, conditions are increasingly normalizing. Royal Greenland managed to navigate the challenges of the pandemic and thereby strengthen its business model.

"In early 2020, Royal Greenland made some crucial decisions to ensure that the Group emerged stronger from the pandemic, so that growth and earnings could be re-established. This proved to be a clear advantage in 2021 as we were able to sell at considerably higher prices already at the start of the year.", said the report.

Despite declining markets and consequential reduced earnings, in 2020 Royal Greenland decided to continue fishing, landing and producing as originally planned. The company thereby served as a buffer between reduced markets and a normal supply chain, with declining sales prices as a consequence.

This was obviously based on commercial considerations but also reflects the simple, but decisive, fact that in supply terms Royal Greenland operates in geographical areas where the company's activities dominate employment and economic activity. Besides potential permanent damage to our access to resources, a drastic reduction of fisheries and production would have entailed significant socioeconomic problems for local communities in both Greenland and Canada.

This decision also meant that, as far as possible, the market impact of the pandemic was limited to one year, as opposed to building up stocks and extending Covid-19’s negative impact on earnings for many years to come.

A significant aspect of the profitable performance is related to the favourable snow crab market, particularly in North America, while the other core species such as cold-water prawns and Greenland halibut regained momentum during 2021

The core North Atlantic activities are the foundation for our business, accounting for 84% of revenue, compared to only 41% eight years ago. Strategic investments also made their mark in 2021. The investment in the new pelagic trawler, Tasiilaq, has made it possible to utilise an increasing capelin quota and make the pelagic activity profitable. The joint venture established in Chile contributes positively to Royal Greenland’s earnings, and in China the e-commerce cooperation with Beiyang Jiamei performed very positively during the year.
In Canada, Royal Greenland has established a joint venture with Clearwater Seafoods concerning a factory for cooked & peeled prawns in St. Anthony, Newfoundland.

At the end of 2020, the new prawn and fishing trawler Avataq was delivered and has fully lived up to expectations, with several catch records during the year. Most recently, the new prawn trawler Nataarnaq was delivered and commissioned in early 2022.

At the same time, a prawn trawler has been added to Royal Greenland’s offshore fleet, as the old Nataarnaq, now renamed Kassassuk, has been retained in the fleet in order to expand the fishing capacity to match the larger prawn quota.

It is also planned to start a newbuilding to replace the last prawn trawler in the fleet, after which Royal Greenland’s fleet will be 100% renewed and future-proof.

A new North Atlantic Champion 4.0 strategy for the next three years was adopted in 2021. The strategy is based on the same mission and vision and will continue the successful journey, with a focus on creating increased value for core species through commercial initiatives and operational excellence.

There is also a better balance between markets and segments, with continued focus on Asia and Europe, but also greater focus on North America, which matches the strategic investments made in Chile, China and Norway.

Royal Greenland will continue to be open to new acquisitions and joint ventures within selected wildcaught high-quality seafood, with privileged access to the resource.

ESG or “Responsibility”, as it is called internally in Royal Greenland, will still be the key focus as an integral aspect of Royal Greenland’s business and a natural element of the company’s DNA, and is strategically prioritised in line with the market and category initiatives.

The satisfactory result for 2021 should also be viewed in the light  of the fact that, in December 2021, Royal Greenland was affected by a comprehensive cyber attack, which meant that all systems were shut down globally.

"Thanks to the great efforts of employees across the Group, we nonetheless managed to deliver most sales orders and keep supply chains running, thereby minimising operational losses", the report added.

During January 2022, the systems were gradually returned to normal levels, but a lot of work is still underway to re-establish systems and the future IT infrastructure.

'Based on a strong global organisation, strategy and business model that have proved their value, Royal Greenland is ready for the future', the company finally said in its annual report.

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Address:	Postboks 1073
City:	Nuuk
State/ZIP:	(3900)
Country:	Greenland
Phone:	+299 324 422
Fax:	+299 323 349
E-Mail:	[email protected]
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