Key events in Q1

The Company’s economic performance in Q1 2023 continued to show an increase in sales, which increased by 23.8 per cent compared to the corresponding period of 2022. The positive result in sales of the company’s products was achieved despite the traditional decline in market demand in January and February. As a part of the Company’s sustainable sales strategy, cooperation with new partners (e.g., in Estonia, Poland, the UK, Asia, etc.), and outsourcing cooperation with other manufacturers in Latvia was commenced. The flexible pricing policy and the wide range of customers in different regions, as well as the stabilisation of raw material and energy prices, led to a 76.3 per cent increase in gross margin in Q1 2023 compared to Q1 2022. In order to ensure a more efficient production process and to reduce the prime cost of end products, changes in the range of products was introduced in the previous reporting period, which enabled us to increase the number of units produced by 30 percent! The company’s range of products has been expanded to include new salmon and Atlantic fish products.

During the reporting period, works within the framework of the investment project implemented in cooperation with the Rural Support Service - the 8th round of expansion of the canned fish production plant - were completed, i.e., the general construction works of the new production unit, network construction, and equipment installation, and test production of the products was commenced. Commencement of production in the new unit will enable the company both to further increase production volumes and to provide output for the new growth markets. The first batches of products in new packaging have already been shipped to customers in April.

The completion of the investment project is also reflected in the balance sheet items - land, buildings, structures and technological equipment and machinery, bringing the total value of property, plant and equipment to EUR 3.37 million.

During the reporting period, warehouse of the finished products was expanded, which provides additional volume for storage of finished products, including for sales during the summer months - the period of technological interruption in production. The balance of end products at the end of the reporting period amounted to EUR 1.7 million representing 83% over the indicators at the beginning of the year.

As a part of sustainable staff policy, from 1 January 2023, staff salaries were increased within the limits of 10% depending on the employee’s category and contribution to the development of company. The company employs people from both Talsi Municipality and Tukums Municipality, as well as Ukrainian war refugees.

Economic performance in the first quarter of 2023 resulted in profit of EUR 386,452. The profit indicator was significantly affected by exceptional revenue received under the European Maritime, Fisheries and Aquaculture Fund for partial reimbursement of additional costs, which amounted to more than 135 thousand euro. Excluding the compensation component for cost increases, the profit was EUR 250 827, or 2.17 times more than in Q1 2022.

Within the framework of further period of the 2022/2023 season, the Company plans to fully start producing in the new production unit, implement marketing activities at industry exhibitions, continue development of new products, complete the audit of the Company’s 2022 annual financial statements.