Shetland Catch achieved a £7.5 million turnaround last year as it moved on from a trouble-hit 2011 and returned to profit.
Accounts just lodged at Companies House show pre-tax profits of £1.4m in the year to 31 March 2013 ,following a £6m loss the previous year, when Shetland Catch's markets were flooded with cheap Faroese mackerel and it took a £1.65m exceptional hit following the "black fish" saga.
The Lerwick-based company, which saw major shareholder Norwegian Pelagic inject £3m and double its stake to 50% last December, was fined £150,000 in the High Court in Edinburgh a year ago and ordered to repay £1.5m it had earned from helping customers to land fish in excess of legal quotas between 2002 and 2005.
It still has another two years to pay the financial penalty for its part in the £47.5m episode.
The mackerel wars saw Shetland Catch's margin slashed from 23% to 10%, but the accounts show a recovery to 16% last year.
Turnover jumped by 50% to £73m, net earnings were £2.78m against a £4.6m loss, and operating profit hit £1.74m.
The directors write: "Production volumes were significantly up on last year, for both herring and mackerel.
"This, in combination with more stable conditions in key mackerel markets, led to increased speed of sales and also profitability."
The stock hangover was virtually eliminated by the year end.
They continue: "The mackerel dispute with Faroe and Iceland has still not been resolved, but we have seen the EU take significant steps to put in place trade sanctions to allow a potential settlement of the dispute to take place."
Market conditions began to improve last autumn, with the company reporting that lower mackerel prices were helping it rebuild sales to its traditional customers in Eastern Europe and Africa, as well as the UK. It has also been making a push in the Far East.
The accounts show no dividend paid last year, against £692,000 in 2011-12. Shareholder funds improved from £14.7m to £18.9m.
Employee numbers were down from 89 to 86, and the highest paid director earned a total £170,229, up from £135,717 the previous year.
Shetland Catch moved to a positive £7.4m cash position from a negative £8.8m, and net debt was slashed from £18.5m to £3.1m.
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