Value creation from the company’s operation in 2019 amounted to ISK 32,726m. The amount was distributed to the community in a variety of ways, such as through wage payments to employees, payments of wage-related charges, purchases of supplies from suppliers, the payment of other public charges, etc.
The tax burden of the consolidated group in 2019 amounted to ISK 3,968m, or 12.1% of its value creation. Approximately 41% of the amount is statutory dues relating to employees and 27% is income tax.
In addition to the taxes, recognised by the companies as an expense, the companies collected and paid taxes and dues not considered charges but which related, nevertheless, to their operation and the direct value they create. Such collected taxes amounted to ISK 3,617m in 2019.
The tax footprint of the Group in 2019 amounted to a total of ISK 7,585m.
The company is proud of its community contributions and the social development that takes place therein.
|Brim’s tax footprint||Unit||2019||2018||2017||2016|
|Fishing quota fee||734||1.068||756||809|
|Tax burden resulting from employees||1.646||1.337||1.291||1.349|
|Catch dues and port fees||170||134||184||201|
|Taxes on assets||126||103||136||106|
|Employee tax burden||3.439||2.699||2.686||2.884|
|Brim’s tax footprint||m.ISK||7.585||5.704||5.495||6.502|
Brim is very aware of its role when it comes to investing in infrastructure and services in the communities in which it operates. The company’s investments, e.g. in Vopnafjörður, where a pelagic fish processing plant has been developed with increased fishing quotas, show that the company believes that such investments are an important basis for ensuring favourable living conditions in Vopnafjörður in the long term. A large proportion of direct and indirect jobs are created in the area due to the operations of Brim. As a result, the municipality has had support from Brim to nurture and strengthen infrastructure development and services in the community, such as in educational and cultural issues, sports, services and transportation, to mention a few.
Brim has three defined operating stations; in Reykjavík, in Akranes and in Vopnafjörður. The operation of the company outside the Reykjavík area is largely managed by management personnel from the local community.
Brim’s policy is to support any activities in Vopnafjörður, Akranes and Reykjavík that in some manner relate to the company or are important to the communities in the area in question. When selecting suppliers and service entities, however, Brim demands that quality, service, competitive prices and competition viewpoints are always given precedence. If these four elements are all in place, they lead the company to the most favourable price each time, maximum quality and improved services.
Brim defines Iceland as its local community. Goods and services from Icelandic suppliers were 95% of the total purchases of the company in 2019. This excludes the renewal of the fishing fleet. Brim has in most cases made the requirement that suppliers maintain a warehouse for the operation of the company and that the delivery is in accordance with use each time. All costs and wastage as regards supplies, therefore, are kept to a minimum. The location of the company outside the Greater Reykjavík Area means that the company sources the services on offer locally and thereby supports its local community. This is of great importance for the company and its employees.
A part of the project “Cleaner value chain in fisheries” is the collection of information on the environmental impact of the services and goods that Brim purchases from its suppliers. Such information collection allows Brim to build up knowledge of the emissions of greenhouse gasses from all the company’s operating units and its entire value chain. Thus, the company can make an informed decision on doing business with the suppliers who cause the least environmental impact and thereby effectively reduce the negative environmental effects from the operation of the company.
In 2016, Brim began to include a provision on environmental issues in its largest procurement agreements. The provision is as follows:
“Brim is a party to the climate declaration of Festa, the Centre for Corporate Social Responsibility, and the City of Reykjavík that was signed by 104 companies in Höfði in 2015. By signing the declaration, the company has undertaken to reduce the release of greenhouse gases in coming years. A part of this includes mapping the effects of service providers and their operation on the operation of Brim, which will be reflected in the environmental results that the company publishes each year. To support these goals, the service providers will undertake, at the beginning of each year or on a regular basis, to provide information on their environmental impact on the operation of Brim during the preceding year.”
At present, there are seventeen agreements with the largest suppliers that contain this provision.
Digital solutions and the fourth industrial revolution have already begun to revolutionise the fishing industry, just as in other sectors, and it is foreseeable that this trend will only speed up in coming years. We at Brim are well aware of this technological development and work together with a number of companies on innovation and interesting solutions in the field of digital technology.
The Technology Development Fund (Tækniþróunarsjóður) has provided grants to develop special equipment that defines catch quotas immediately on board fishing vessels and which are approved by the authorities. The basis for this system is the development of computer-assisted vision which is already present on board the company’s fishing vessels. Participants in the project, in addition to Brim, are Skaginn 3X, FISK Seafood, Iceprotein and Fiskistofa.
Brim has signed a declaration of intent on collaboration with the Icelandic Meteorological Office (Veðurstofa Íslands) and BitVinci ehf. about the dissemination and registration of ocean weather measurements from the company’s vessels. Ocean weather measurements are key studies that make it possible for Veðurstofa Íslands to carry out its safety role as it should, e.g. in connection with weather forecasts and warnings, as well as relating to research into climate change. Brim wishes to take an active part in the collection of measurements that can make ocean weather forecasts more accurate and which will be of use to research into climate changes and in studies of the viability of marine resources in the future. BitVinci ehf. manages the project.
In mid-year 2019, Viðey began using a new trawl from Hampiðjan called JAGGER. The trawl was developed by Hampiðjan in collaboration with the vessel officers on Viðey. The trawl has proved to be a success, with Viðey being the vessel that has brought in the largest catches in Iceland over the course of the year.
Work continued on the development of a new type of trawl boards in collaboration with ECCO trawl boards.
Both projects have the goal of increasing the productivity of the company by increasing catch-per-unit effort (CPUE), achieving higher catch values with improved catch quality, lower fuel costs and decreasing carbon emissions.
In 2013, Brim decided to renew its fleet of vessels. In 2017, the company accepted delivery of three new wetfish trawlers and began the operation of two of these in 2018: Akurey AK and Viðey RE. Engey RE began operations in 2017 but was subsequently sold to Russia.
The pelagic fleet was fully renewed in 2015. In addition to the aforementioned vessels, the company has a freezer trawler under construction in Spain. Investments in the fleet of vessels as of 2013 have amounted to EUR 170m.
Significant technological advances have been made with the new high-tech vessels owned by the company, and they rank as the largest development project in the Icelandic fisheries industry to date. The results are internationally revolutionary solutions where it has been made possible to maintain the quality of the product better than before and at the same time, to eliminate the most dangerous and tiresome jobs on board.
Each fish is photographed after being gutted, its species is analysed and measurements taken of its volume and length. The fish is then cooled using a SUB Chilling cooling process without ice, which maintains quality and shelf-life. After the ice-free chilling, the fish is transferred automatically into numbered storage tubs on the processing deck of the vessel. The storage tub is then automatically transferred into the hold of the vessel – no human hands are involved.
By using the Trackwell software, captains record the catch and species in each individual haul. These records replaced the old method of keeping a catch log manually. It has the option of listing how the catch is divided in size, as well as various other information that can prove valuable at a later date.
The groundfish operations in Norðurgarður will be significantly renewed in spring 2020. Almost all equipment, from reception to packing, will be renewed. Among the items that will be renewed are tub systems for feeding into cold storages, tub washers and a robot that empties fish from tubs into raw materials graders, the first time that a robot is used in such a manner. New trimming flowlines will be installed, water-jet trimming machines and robots that pack the fresh fillets and fillet cuts into boxes. In addition, the IQF freezers will be replaced and the freezer system enlarged. Robots will also be used to stack boxes containing fresh fillets and fillet cuts onto pallets. Both the processing building and the staff facilities will be improved at the same time. This project will increase productivity, utilisation and the quality of the products. It is, moreover, high time that the older equipment and machinery were replaced.
A new and fully equipped packaging station for frozen products was brought into service in 2018. The new packaging station is in Ísbjörninn and replaces an older packaging facility that was in the fish processing plant in Reykjavík. With the establishment of the new packaging station, there were considerable improvements, as it is much more efficient and automated than the previous station.
Brim and Valka ehf. began working together in 2009 to develop an x-ray–controlled water-jet trimming machine which removes the pin bones automatically from redfish fillets. In 2017, Valka delivered a new water-jet trimming machine together with a sorting machine for redfish. It is more than twice as fast as the older machine and is, moreover, much more automated. In the meantime, Brim purchased the water-jet trimmer that was used to cut cod, a move that also proved successful. This new technology has revolutionised the processing of groundfish and increased opportunities for processing plants to maximise the value of their catches.
Brim uses the Innova production system in its production management of groundfish processing in the plant in Reykjavík. When the fish is delivered into the plant, it is recorded for processing in the system, which then manages the production digitally and maintains traceability back to the vessel.
The RapidFish quality inspection system is a dynamic system for recording information on the quality of the catch. The system, moreover, helps Brim to ensure compliance with all quality standards.
The fish meal and oil processing plant in Vopnafjörður has adopted Near Infrared Analysis technology, or NIR. NIR measuring devices use infrared beams to measure the chemical composition of the fish meal, such as protein, fat, salt, TVN and more. Such a device has been in use in the laboratories of the company for several years. The new device is different in that it is located on the production line and is network based.
Brim has been a pioneer in the adoption of smart environmental management, which involves, among other things, automatically collecting data on the environmental aspects of the company and distributing information to stakeholders. A part of the smart environmental management has been making information processes that are mandatory for vessels according to environmental legislation, including MARPOL, electronic. In addition, electronic monitoring equipment for supervisory bodies has been installed where supervisory authorities can carry out their monitoring duties over the Internet instead of having to be physically present. Brim, moreover, has installed smart containers and smart scales in the waste sorting stations of the company. This equipment records, in real time, the recycling of raw materials and waste and transmits the information electronically to the environmental database of the company.
Over the past few years, Brim has been engaged, in collaboration with Radíómiðun, Síminn and Akureyri Hospital, in installing telemedicine equipment in the company’s vessels. Such a system has now been installed on board both pelagic vessels, Víking AK and Venus NS, and will soon be installed in other vessels operated by the company. When accidents or illness occur on board and the equipment in the on-board hospital room has been turned on, all accessible network connections in the area will be directed toward the hospital room. From the hospital room, it will then be possible to send live images of the patient together with all the main vital signs the doctor needs to assess the condition of the patient. This equipment can make all the difference when assessing whether the helicopter needs to be sent or not. In addition, it supports ships’ officers in the care of the patient.
Brim has also adopted a digital accident registration system which is accessible through the company’s intraweb. The object of the system is to make it easier for employees to register accidents and to ensure that the company’s safety management has an overview of what accidents occur, that they are examined and that the appropriate measures are taken to prevent further accidents.
The Board of Directors and Managing Directors of Brim place great importance on maintaining good management practices so as to ensure that the work of the Board, as well as the operation of the company as whole, meets the criteria that apply to good governance. The company is listed in the main market of the NASDAQ exchange in the Nordic countries and follows the communication rules that apply there. An Annual General Meeting is held every year, and investor meetings are held four times a year.
Below you can access information on the Board of Directors, the governance statement (only in Icelandic) and the rules of procedure of the Board. These contain information on the composition of the Board, division of power and decision making.
The principal decisions made by the Board of Directors in 2019 were:
Sub-committees appointed by the Board of Directors were as follows:
|Eggert Benedikt Guðmundsson||Chairman, is a member of the Board of Directors|
|Anna G. Sverrisdóttir||Member of the Board of Directors|
|Magnús Gústafsson||Chairman, is a member of the Board of Directors|
|Kristján Þ. Davíðsson||Member of the Board of Directors|
|Kristrún Heimisdóttir||Member of the Board of Directors|
In September 2018, Brim hf. announced its purchase of all the shares of Ögurvík. The purchase involved a process divided into stages which began in spring 2018. At the end of August 2018, Guðmundur Kristjánsson, CEO of Brim, was appointed by the Board of Directors of the company to initiate negotiations for the purchase. At that time, the information met the term conditions of Article 120 of the Act on Securities Transactions. This provision relates to insider information. Brim, however, neither published insider information nor took any decision on delaying such publication until 7 September that year. The Financial Supervisory Authority and Brim hf. reached an agreement to settle the matter by agreement. Brim hf. agreed to pay a fine of ISK 8.2 million for not having published insider information as soon as possible.
|Other operating income||EUR(000)||0.214||12.345||10.592|
|Wages and benefits paid in Iceland||EUR(000)||76.061||70.804||73.903|
|Payment to owners||EUR(000)||13.353||10.359||16.338|
|Interest payments to creditors||EUR(000)||6.459||5.870||4.051|
|Significant financial support from public entities||EUR(000)||-||-||-|
|Tax benefit due to innovation and development projects||EUR(000)||115||675||349|
|Proportion of managers from the local community||%||100||100||100|
|Proportion of suppliers in the local community||%||96||96||96|