Atlantic Sapphire

Earnings Release • Aug 24, 2023

Atlantic Sapphire ASA: First Half 2023 Report and Operational Update

Atlantic Sapphire ASA: First Half 2023 Report and Operational Update

Miami, FL, August 24, 2023

Please find attached the Atlantic Sapphire ASA interim financial statements for the First Half 2023 and an Operational Update.

The documents will be made available at www.atlanticsapphire.com/investor-relations.

A recorded presentation of the highlights of the First Half 2023 Report and Operational Update is available here: https://vimeo.com/857366277

The presentation is also attached and available on the Company’s webpage.

Key events in the First Half of 2023 were:

- Focus on heavy infrastructure upgrades and operational improvements

- Approximately 2,100t RLW of gross biomass gain and harvest volume of 870t HOG

- Decrease in revenue driven by lower volume, partially offset by higher sales prices

- Consistent price achievement of ~USD 12/kg HOG on premium fish

- Increase in overall cost per kg of biomass produced compared to H1 2022

- Internal reorganization of the company initiated to streamline the organization and strengthen operational resources

- US Phase 2 construction currently focused on design and optimizing quality and cost of the project, limiting actual capital expenditures for the project to a minimum

- Extension of the debt facilities with DNB to April 2025 and a USD 55m Private Placement successfully completed

As announced in the H1 2023 trading update released on the 8th of August 2023, the Company has experienced lower than expected biomass gain in Q3 2023 to date. This indicates a lower revenue in H2 2023 compared to what the Company expected. The cause has been identified as elevated water temperatures which will be addressed by installing additional chiller capacity scheduled in September 2023.

While the Company has taken action to mitigate the cause of the reduced biomass growth, the expected reduction in revenue has resulted in an estimated reduction in cash flow from operations in H2 2023 of approximately USD30 million and an estimated breach of the USD 15 million minimum liquidity covenant under the current debt facility during Q3 2023 (no assumed draw on the RCF facility). As a consequence, DNB Markets and Arctic Securities have been engaged to explore potential funding routes in this respect to ensure a sufficiently large cash buffer.

The largest existing shareholders represented on the Board of Directors, including Nordlaks, EW Group and Strawberry, have already indicated their continued financial support in the event of a funding round.

For further information, please contact:

Johan E. Andreassen

CEO

or

Karl Øystein Øyehaug

CFO

investorrelations@atlanticsapphire.com

This information is subject to the disclosure requirements pursuant to the Norwegian Securities Trading Act section 5-12.

About Atlantic Sapphire ASA

Atlantic Sapphire is pioneering Bluehouse® (land-raised) salmon farming, locally, and transforming protein production, globally. Atlantic Sapphire has been operating its innovation center in Denmark since 2011 with a strong focus on R&D and innovation to equip the Company with the technology and procedures that enable the Company to commercially scale up production in end markets close to the consumer. 

In the US, the Company has identified and obtained the requisite permits to construct its Bluehouse® in the ideal location in Homestead, Florida, just south of Miami. The Company has completed Phase 1 construction, which provides the capacity to harvest approximately 10,000 tons (HOG) of salmon annually. The Company completed its first commercial harvest in the US in September 2020. Atlantic Sapphire is currently constructing its Phase 2 expansion, which will bring total annual production capacity to 25,000 tons, and has a long-term targeted harvest volume of 220,000 tons.