Significant net loss in Namibia

Last week, Samherji announced that the investigation into the company's operations in Namibia, conducted by Norwegian law firm Wikborg Rein, had been completed. The announcement outlined the next steps in the process. It was stated that Samherji would soon explain further the individual allegations that have been made against the company and its employees.

The Pro forma consolidated financial statements of companies affiliated with Samherji in Namibia for the years 2012-2018 have been finalized. Last year, serious allegations were made about the operations of the companies in question. For this reason, special efforts were made to perform an in-depth analysis of the companies accounts to investigate these allegations and give an accurate account of the business.

The revenues of subsidiaries in Namibia in the period 2012-2018 amounted to the equivalent of ISK 41.1 billion, and operating expenses were ISK 38.9 billion. Net loss for the period, adding depreciation, finance costs, income tax etc. amounted to ISK 950 million. When all operating expenses in Namibia were broken down exactly, it was revealed that 55% was paid to Namibian parties or ISK 21.4 billion at today's exchange rate. Samherji believes that this shows that one of the most serious allegations made against the company, about exploitation in Namibia, is not rooted in facts.

The most significant part of operating expenses during the period were salaries, payments to Namibian partners and quota fees to the Namibian government. Payments to joint ventures owned by Namibians, the Namibian government and other quota holders were 29.3% of total revenues, and these payments amounted to a total of ISK 12 billion. Quota fees and salaries during the period were 51% of domestic operating expenses. The most substantial part of operating costs outside Namibia was due to salaries paid to crew members, fuel, and charter and maintenance fees for vessels.

"The results show that the allegations that Samherji walked away from Namibia with large profits are grossly misleading. Serious accusations about exploitation in Namibia deeply affected our management. However, the financials show that payments to Namibian parties during the period amounted to over ISK 21 billion at today's exchange rate. We sincerely hope that the disclosure of this information will lead to factually accurate and fair reporting about the operations," says Björgólfur Jóhannsson, co-CEO of Samherji.

Samherji has always emphasized strongly that its subsidiaries fulfil their obligations regarding the payment of salaries, taxes and fees. The same applies to agreements with Namibian partners, including the Joint ventures. Disputes with the Joint ventures were resolved before Namibian courts, and their claims against Samherji were rejected. 

Through the years, companies within the Samherji group have had to lend working capital to subsidiaries in Namibia, and a substantial portion of the loans has not been repaid. All operations in Namibia were discontinued at the end of 2019, and the subsidiaries are under closure. The companies have not been liquidated, but it is anticipated that a significant part of the aforementioned loans will not be recovered.

Companies affiliated with Samherji ceased operations in Namibia in 2019. In the coming weeks, Samherji will publish further information on its business activities in Namibia.

Margrét Ólafsdóttir