The Møgster family lost billions offshore

The Møgster family’s parent company in the group, Laco, owns, among others, the fish farming companies Austevoll Seafood and Lerøy Seafood, which contributed to a positive development in the operating year 2019. However, it did not hold back for a blood-red result for Laco after failed investments in offshore operations last year.

More than NOK 5.5 billion separates Laco’s operating results in 2018 and 2019. The board writes in the annual report that «The group’s operating profit is strongly affected by write-downs of values ​​related to Laco’s share investments in Dof, as well as write-downs of ship values ​​in the Dof group, totaling 4, 2 billion kroner ».

The failed offshore investment caused the Møgster family a loss of NOK 2.6 billion in the parent company, according to the report.

Crisis-stricken Dof

Laco owns 66.4 per cent in Møgster Mohn Offshore, which in turn is the dominant owner in listed Dof with almost 49 per cent. Dof is an international group that owns and operates offshore vessels, as well as providing offshore services and subseat services.

The board, which mainly consists of Møgster family members, is disappointed with last year’s result, but still continues the investment in Dof: «We have not succeeded in the offshore investment, we apologize, but Laco will still be engaged in the work of rebuilding values within this area “, the report states.

The Dof share has plunged a gigantic 80 percent on the Oslo Stock Exchange in the past year after the billion write-downs, as well as a currency loss of NOK 2.5 billion last year.

Weaker in fish

Through the Austevoll Group, the Laco and Møgster family have far better results in the aquaculture industry. The group’s seafood business is managed through Oslo Børs-listed Austevoll Seafood, which owns Lerøy Seafood, as well as Austral Group, Foodcorp Chile, Br. Birkeland and the jointly controlled company Pelagia Holding in Europe.

Austevoll Seafood achieved a turnover of NOK 23.3 billion, and an operating profit of NOK 4.3 billion in 2019.

The Austevoll Group’s profit before tax was NOK 2.8 billion, which was far weaker than NOK 5.2 billion in 2018.

“This is mainly due to somewhat weaker earnings from aquaculture and weaker earnings in Austral in Peru, as a result of significantly lower raw material volumes,” the board writes in the annual report.

Coronapreget 2020

The board states in the report that it is not satisfied with the group’s performance in aquaculture in 2019. A weak year for the fishing business is followed this year by the corona pandemic that is ravaging global markets. In the outlook for 2020, however, the board writes that Laco “has been strengthened in the perception that the measures that have been implemented and the investments that have been implemented will provide a positive development through increased volume and improved competitiveness in the years to come”.

It is especially the investments in new facilities in Lerøy Seafood – such as Lerøy Sjøtroll and Lerøy Aurora – that are expected to contribute to higher production and lower costs in the years ahead.

For the offshore business, 2020 looks catastrophic. The board writes that the effect of the corona pandemic and the dramatic fall in oil prices has resulted in postponements and cancellations of several projects and tenders for Dof:

“A continued weak market will further reduce earnings and significantly increase the liquidity risk for the Dof Group.” The corona crisis hits the Dof share hard – which so far this year has plunged 61 percent to 60 cents.