Iceland’s fishing and processing faced challenges in 2023 with export declines, mixed profitability, and ISK 30.45 billion in revenue. Photo: Síldarvinnslan
Iceland’s fishing and processing industries experienced mixed results in 2023, as profitability dipped amid rising costs and export challenges.
According to a report by Statistics Iceland, the combined EBITDA margin for the fishing and processing sectors dropped to 36.5% of revenue, compared to 37% in 2022. This reflects global pressures, including fluctuating demand and operational expenses, impacting one of Iceland’s most vital economic sectors.
Economic Performance and Profit Margins
- Overall Profitability: The net profit margin for the combined sectors declined from 26.3% in 2022 to 24% in 2023.
- Fishing Operations: Slightly increased profitability with EBITDA rising from 24.6% to 24.9% of revenue.
- Fish Processing: A sharper drop in EBITDA from 21.1% to 18.3% underscores the challenges within the processing subsector.
Export Trends and Pressures
Despite a 6.6% increase in export prices, the industry faced a significant 8.7% reduction in export volume, leading to a 2.6% overall decline in export value. Rising fuel costs, up by 2%, and currency fluctuations further squeezed margins, particularly for export-driven operations.
- Export Value: ISK 30.45 billion (£218 million, €254 million, $267 million).
Subsector Analysis
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Demersal Fisheries: Profitability in fishing operations fell from 15.7% to 11.5%, while processing margins dropped from 15% to 13.9%.
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Pelagic Fisheries and Processing: Retained higher profit margins, though net profit slightly decreased from 42.5% to 41.8%. This subsector continues to outperform others in the industry.
Financial Overview
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Assets and Liabilities: Total industry assets reached ISK 1.059 billion (£7.6 billion, €8.8 billion, $9.3 billion), with liabilities of ISK 554 billion (£4 billion, €4.6 billion, $4.9 billion).
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Equity: Industry-wide equity levels dropped marginally, from 49% in 2022 to 47.7% in 2023.
Regional and Economic Impact
Iceland’s fishing industry remains a cornerstone of the economy, supporting jobs, exports, and regional development. However, the 2023 report highlights growing pressures on both fishing and processing, particularly for demersal species. Pelagic operations provided a relative bright spot, maintaining strong export performance.
Focus on Sustainability and Adaptation
Looking ahead to 2024, the industry is expected to prioritise operational efficiencies and sustainable practices to counteract rising costs and volatile market conditions. By leveraging its global reputation for quality and sustainability, Iceland aims to strengthen its fisheries and preserve their vital contribution to the national economy.