Icelandic processor Vinnslustöðin reports 2025 turnaround with sale of the Þórunn Sveinsdóttir VE-401 to Loðnuvinnslan part of the recovery package
Strong Financial Recovery Masks Ongoing Structural Challenges
Vinnslustöðin hf. has reported a sharp turnaround in 2025, despite what it describes as a difficult operating environment driven by low capelin quotas and mounting pressure across the Icelandic fishing industry.
At its annual general meeting on 10 April, the company confirmed total revenues rose by 4.8% to ISK 27 billion (approx. €187 million/£160 million). Profit reached ISK 1.5 billion (approx. €9.9 million/£8.5 million), reversing a loss recorded the previous year.
Operating profit before depreciation (EBITDA) climbed to ISK 6 billion (approx. €41 million/£35 million), up significantly from €27 million in 2024.
“There was a major turnaround in the group’s operations from the previous year and the result is good considering that the capelin quota was very small. It shows the strength of the operations, the diversity of the activities and the ability of the staff to respond to changing circumstances,” said Guðmundur Örn Gunnarsson.
The recovery was largely attributed to stronger demersal fish prices, successful mackerel fishing, and improved performance from the company’s international operations.
Cost Pressures Force Structural Changes and Asset Sales
Despite improved financial results, the company acknowledged that rising costs and policy changes are forcing difficult operational decisions.
In response to increased fishing fees and broader cost inflation, Vinnslustöðin confirmed the closure and sale of Leo Seafood to Þórunn Sveinsdóttir VE. The move was positioned as part of a broader effort to reduce debt and stabilise operations.
“These were difficult decisions, both for the staff and the community in the Islands, but they were necessary to ensure the company’s solid operating foundation for the future,” said Guðmundur Örn.
The company also confirmed it has abandoned plans to build new demersal vessels, citing the impact of higher fishing fees on long-term investment viability. Instead, it is considering the purchase of a second-hand vessel.
Investment Continues Despite Uncertain Outlook
Capital expenditure reached approximately ISK 2.1 billion (approx. €14.5 million/£12 million) in 2025.
This included the completion of Kimi, a new combined demersal and pelagic processing facility. The development incorporates wastewater treatment systems and upgraded sorting and reweighing infrastructure, with final elements due to be completed in 2026.
While investment has continued, the shift away from new vessel construction highlights growing caution within the sector.
Dividend Proposal Highlights Improved Financial Position
The company’s balance sheet strengthened during the year, with reduced debt and increased equity.
The board has proposed a dividend of up to ISK 870 million (approx. €6 million/£5.1 million). This represents a return equivalent to roughly 2% of the company’s estimated market value, significantly below the Central Bank of Iceland policy rate of 7.5%.
“It is particularly pleasing to see the company’s debt decreasing. This success is the result of both good operations and targeted actions,” Guðmundur Örn said.
Industry Uncertainty Linked to Policy And International Agreements
Beyond company performance, the annual meeting focused heavily on external pressures facing the wider Icelandic fishing industry.
Guðmundur Örn criticised recent increases in fishing fees, arguing that regulatory instability is already influencing investment decisions. “We need a stable and predictable operating environment to be able to continue to invest, create value and build communities across the country,” he said.
He also raised concerns over a potential new international mackerel agreement, warning it could reduce landings in Iceland and weaken economic activity in coastal regions.
Infrastructure Gaps Highlighted in Vestmannaeyjar
The company pointed to infrastructure limitations in Vestmannaeyjar as an ongoing constraint on development.
Key priorities identified included improving electricity security, strengthening transport links, and further investment in port infrastructure to support the fishing industry.
Company Signals Confidence Despite Ongoing Risks
Despite the challenges, Vinnslustöðin maintained a cautiously optimistic outlook.
The company has implemented operational changes aimed at improving efficiency and positioning itself for future growth, even as global economic uncertainty and domestic regulatory pressures persist.
December 2026 will mark the company’s 80th anniversary, a milestone it frames as evidence of long-term resilience.
“We have been through many storms in the past decades. We stand strong, with strong employees, strong operations and faith in the future,” Guðmundur Örn said.
Values are based on approximate average 2025 exchange rates.
