Stranda Prolog enters into insolvency proceedings

Stranda Prolog

On 5 September 2022, the board of Stranda Prolog AS filed for insolvency with Møre og Romsdal district court in Norway. Marel announced the acquisition of a 40% stake in Stranda Prolog, a Norwegian provider of salmon primary processing solutions, on 29 January 2021.

 

Marel and Stranda Prolog have successfully collaborated over the years to deliver full-line projects worldwide, and the strategic partnership with Stranda Prolog was based on their superior knowledge of raw material handling and quality processing solutions for primary salmon processing.

When Marel acquired the 40% stake, Stranda Prolog had 100 employees, EUR 25 million in annual revenues and was positioned for continued growth. Through its long-standing relationships with many of the largest salmon processors globally, Stranda enjoyed a large order backlog at the start of the pandemic. However, orders received gradually softened during the pandemic, and with the addition of significant cost increases on legacy contracts, and lack of raw materials and labor to complete the projects, resulted in significant impact on profitability and liquidity. This unfortunately has been true for many smaller operators, who despite their innovative niche technology and strong orders have encountered difficulty in navigating the challenging environment in the past years.

The financial impact from the 40% stake in Stranda, is estimated to result in an impairment of EUR 7.0 million in the Q3 2022 financial accounts. There will be no impact on operational performance (EBIT) as the holding in Stranda is categorized as investments in associates, though the impairment will impact net result. Marel's business model has proven to be resilient during times of turbulence, where our local presence, with sales and service engineers servicing customers in over 140 countries, has proven to be a key differentiating factor in supporting our customers. Marel has a balanced revenue exposure to global economies and local markets through its global reach, innovative product portfolio and diversified business mix. With pro-forma full-year revenues 2021 of EUR 1.5 billion, Marel is enjoying accelerated orders received and revenue growth of over 20% that is well balanced from both a segment and geographical perspective, although profitability has been hampered by supply chain complexity and inflation.

Marel is always committed to finding the best possible solution together with our customers. As of today, the insolvency administrator will assume control of the business. The board of Stranda hopes there is a basis and interest for all or parts of the business to be resumed and more clarity is expected in the coming weeks. Marel is a minority shareholder in Stranda, and together with the other shareholders is looking into the possible options available.

Announcement of acquisition of 40% stake in Stranda Prolog from 29 January 2021

 

English translation of Stranda Prolog’s press release:

Press release: Stranda Prolog enters into insolvency proceedings

Kristiansund, 5 September 2022 – The board of Stranda Prolog AS has filed for insolvency with Møre og Romsdal district court.

Stranda Prolog was prepared for continued growth and had a large order backlog when Covid-19 hit. Order intake was good at the start of the pandemic but gradually softened. Limited order intake, significant cost increases on legacy contracts, and a lack of raw materials and labor to complete the projects gradually affected profitability and liquidity.

The management team and employees have worked hard to reduce costs and complete projects. Despite some positive signs there have been continuous delays in ongoing projects and contract negotiations. At the same time, the number of outstanding requests and quotes has never been greater than now.

Our lender has shown great flexibility throughout the demanding market situation, but the problem could not be resolved given the challenges at hand.

We want to praise our employees who have performed exceptionally through this difficult period. Without their flexibility, effort, and expertise, this day would probably have come earlier. Unfortunately, we were unable to complete the project. The board humbly thanks them for their efforts.

The board hopes there is a basis and interest for all or parts of the business to be resumed.

Website of Stranda Prolog

 


Contact IR

For further information, please contact Marel Investor Relations via email IR@marel.com or tel. (+354) 563 8001

Tinna Molphy

Tinna Molphy

Marino Thor Jakobsson

Marino Thor Jakobsson

Ellert Gudjonsson

Ellert Gudjonsson


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