Brim’s Operations in 2021

Brim is the largest fisheries company in Iceland with catch quotas, which correspond to close to 12% in cod equivalents. Brim and its subsidiaries have operation units in Reykjavík, Akranes, Vopnafjörður and Hafnarfjörður. An average of nine fishing vessels were in operation during the year. The company’s head offices are at Norðurgarður in Reykjavík. These house the executive management of the company along with the finances, groundfish, pelagic and human resources departments. The number of full-time positions at Brim and its subsidiaries were 762 in 2021 and are spread out over the entire value chain, i.e. fishing, processing, sales and distribution of the company’s products. The company is listed in the main market of the Icelandic NASDAQ exchange.

The COVID-19 pandemic had a considerable effect on the Group’s operations during the year. Efforts were made to ensure the safety of employees, and with a concerted effort by staff, significant disruption to operations was prevented.

Registered share capital of Brim hf. was ISK 1,956 million at the end of 2021. At the end of the year, the company owned its own shares with a nominal value of ISK 35 million. Outstanding share capital amounted to ISK 1,921 million. The number of shareholders at the beginning of the year was 880 but was 1,246 at year-end. At the end of 2021, four shareholders owned more than 10% of the company: Útgerðarfélag Reykjavíkur hf., which owned 34.53%; Lífeyrissjóður starfsmanna ríkisins A-division, which owned 14.20%; Lífeyrissjóður verslunarmanna, which owned 10.76%; and RE-13 ehf., which owned 10.23%.

The share price was 78.0 at the end of 2021 and 50.1 at the beginning of the year. The actual return on shares during the year, including dividends in the company, turned out to be positive by 50.9%. This is based on shares bought at the closing price of the year 2020 and sold at the end of the year 2021, taking into account the payment of dividends and inflation during the year. In the long run, the actual return on a share which was bought at the end of 2001 and sold at the end of last year averaged 12.1% per year.

Registered trading in Brim hf. shares amounted to ISK 17,939 million in 2021. Registered trading in 2020 amounted to ISK 9,423 million. The nominal increase in the OMX Iceland ICEX-IS index was 32.96% in 2021 and 34.55% taking into account dividends.

Brim’s operations are subject to the rules on transfer pricing, which refer to how related legal entities price transactions between themselves. The rules are intended to ensure that the price determination in transactions between related legal entities is in accordance with prices in comparable transactions between unrelated parties, so that the pricing is in accordance with the so-called arm’s-length rule. The rules only apply when there are certain connections between legal entities that conduct business.

Connection exists when there is a direct and/or indirect connection between the legal entities themselves or when there is a connection between persons who are the majority owners of the legal entities or have administrative control over the legal entities that conduct business. The relationship between the legal entities themselves can be defined directly or indirectly as follows:

• When legal entities are part of the same group, they are unequivocally related legal entities.
• When a legal entity is under the direct and/or indirect majority ownership or administrative control of two or more legal entities within a group, it is considered to be related to all legal entities within the group.
• When a legal entity owns more than 50% in another legal entity indirectly, they are considered related within the meaning of the provision of the Act on Transfer Pricing. If one legal entity is part of a group, the other legal entity is considered to be related to all other legal entities within the group.

Fishing, processing and product sales were generally successful during the year. Although successful in minimising COVID-19’s direct impact on operations, the pandemic had a significant impact, which was reflected in a sharp rise in transportation costs and the price of consumables such as oil, packaging and other resources.  In addition, the cost of sick pay increased significantly. The cost of a variety of measures taken, such as zoning and COVID-19 rapid antigen tests, was also significant.

During the year, there were changes to the fleet when the pelagic vessel Svanur RE was purchased by Brim, with the aim of strengthening the company’s pelagic fishing, and Höfrungur III AK was sold.

At the end of the year, the following vessels were in operation at Brim and the subsidiaries Ögurvík, Kambur and Guðrún Þorkelsdóttir.

Further information on the company’s fleet can be found on the company’s website.

All the operating units on land and at sea are subject to the official monitoring of the Icelandic Food and Veterinary Authority (Matvælastofnun, MAST), which makes sure that laws and regulations are complied with. MAST’s monitoring operations are based on inspections, which in some cases are carried out without any notice.

The company’s operations in the production plants in Reykjavík and Vopnafjörður are certified in accordance with the IFS standard (International Featured Standard). This is an internationally recognised standard and one of the most used in the field of food safety, along with ISO and BRC.  These main standards of food safety are co-ordinated under the banner of the Global Food Safety Initiative (GFSI). The IFS certification in Vopnafjörður has lapsed in the last two years, as the COVID-19 pandemic has prevented an audit by foreign regulators.

The fish processing plant Kambur in Hafnarfjörður and the freezer trawlers do not have IFS certification.

The fishmeal plants in Akranes and Vopnafjörður are certified according to the FEMAS standard (Feed Materials Assurance Scheme). FEMAS is an international feed safety standard for products produced for animal feed.

Brim’s fishing operations rely solely on wild stock, and the company’s products consist, in all cases, of pure and naturally healthy marine produce. The traceability of products is an important part of food production. The food and feed safety system of Brim is based on being able to trace the product from its origins all the way to the customer. Detailed information on catches are recorded, such as fishing areas, fishing gear, the composition of the catch, volumes, etc. The origin of the raw material in processing is recorded and information on the origin of the product is provided to the buyer. In addition, all information on the end destination of all products is maintained. Thus, all products are traceable from fishing to the buyer. This traceability is tested on a regular basis by the company’s internal controls as well as by external audits of the systems of the company, including in audits relating to certifications of origin.

The products of the company are in all cases labelled in accordance with rules on the labelling of marine products. This means that it is always clear what species of fish and fishing area is involved, as well as what type of fishing gear was used.

Brim, along with Silfraberg, which is an ambitious domestic supplier and also an agent for the product in question, has been conducting experimental tests with a new type of pallet film which aims to reduce the use of plastic in operations and thus reduce the company’s carbon footprint.

The foreign producer of the film has in recent years developed solutions for companies with the aim of reducing the use of disposable plastic and thereby reducing waste in packaging use. An announcement from the manufacturer states that it is a leader in this market, and the BioZ pallet film in question is completely degradeable in the environment.

In the first half of the year, the company began to develop an app for the company’s ship inspectors that enables them to order fuel for ships from mobile phones. This was one of the projects that is part of the company’s innovation and development work.

With this fuel app, the staff responsible for ordering oil for ships can carry out the order wherever they are at any given time. The employees of the relevant oil company receive a notification on their mobile phone and confirm receipt, which is then displayed on the customer’s phone.

Concurrently, carbon footprint (CO₂) in the amount of fuel that was delivered directly to the environmental base is recorded in real time.