Quarterly Report • Nov 9, 2021
Quarterly Report
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8 th of November 2021
| Cautionary note regarding forward-looking statements 2 | |
|---|---|
| Arctic Fish Holding3 | |
| Principal activities 4 | |
| Third Quarter 2021 Performance 6 | |
| Outlook 11 | |
| Board declaration 12 | |
| Consolidated Income Statement 13 | |
| Statement of Financial Position 14 | |
| Statement of Equity 15 | |
| Statement of Cash Flow 16 | |
| Note 1 – Accounting Principles 17 | |
| Note 2 – Farming summary 20 | |
| Note 3 - Biomass 21 | |
| Note 3 Continued – Biomass 22 | |
| Note 4 – Fair Value Adjustments 24 | |
| Note 5 – Related parties 24 | |
| Note 6 – Financial Covenants 25 | |
| Note 7 – Shareholder List 27 |
This interim report includes forward-looking statements that reflect the Company's current views with respect to future events and financial and operational performance. These forward-looking statements may be identified by the use of forward-looking terminology. These forward-looking statements are not historic facts. The forward-looking statements are not guarantees of future performance. The Company's actual financial position, operating results and liquidity, and the development of the industry in which the Company operates, may differ materially from those made in, or suggested, by the forward-looking statements. The Company cannot guarantee that the intentions, beliefs, or current expectations upon which its forward-looking statements are based will occur.
By their nature, forward-looking statements involve, and are subject to, known and unknown risks, uncertainties, and assumptions as they relate to events and depend on circumstances that may or may not occur in the future. Because of these known and unknown risks, uncertainties and assumptions, the outcome may differ materially from those set out in the forward-looking statements.
These forward-looking statements speak only as at the date on which they are made. The Company undertakes no obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to the Company or to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this report.
Arctic Fish Holding AS was incorporated on 1 October 2020. The Company is a holding company which owns 100% of the shares in Arctic Fish ehf, the former parent company of the Group, incorporated on 1 July 2011. Arctic Fish ehf. was founded in 2011 and is now one of the leading salmon farmers in Iceland, situated in the West Fjords, a region with favourable conditions for fish farming. The West Fjords are known for their pristine nature, good seawater conditions, low density and high growth potential.
The Group has a modern and high capacity smolt facility with recirculating aquaculture systems ("RAS") technology, being currently the only RAS facility in Iceland with large-scale production capacity. 7,400 tonnes of head-on gutted ("HOG") salmon were harvested by the Group in 2020 and considerable growth is expected in the coming years with a predicted estimated harvest volume of approximately 11,500 tonnes HOG for 2021. The Group has more potential for harvesting in 2021 but will move harvesting to Q1 2022 that will increase volumes in 2022.
The Group has farming licences for a total of 23.1 thousand tonnes maximum allowed biomass ("MAB"), of which 5.3 thousand tonnes relate to licences for rainbow trout that are in the process of being converted to salmon licences. The Group is in the final stages of achieving 4,000 tonnes MAB for salmon in Arnarfjordur. This is a new license in a fjord and at a site that the Group has not operated in before.
The Group also has applications for an additional 4.8 thousand tonnes of MAB for salmon. Additionally, the Group holds a license for land based smolt production on its own land in Norðurbotn, which is required for the Group's ongoing smolt production.
| Year | Main Events |
|---|---|
| 2011 | Arctic Fish was founded |
| 2011 | Trout farming and the processing of white fish was started |
| 2011 | Jerzy Malek, the founder of Morpol and Milarex, became a part-owner |
| 2014 | Construction of smolt hatchery in Norðurbotn was initiated |
| 2016 | NRS acquired 50% of the shares in Arctic Fish ehf. |
| 2017 | First salmon smolt released to sea |
| 2018 | The first stage of the hatchery was completed |
| 2019 | The first salmon was harvested in January 2019 |
| 2019 | 3,300 tonnes of HOG salmon was harvested during 2019 |
| 2020 | 7,400 tonnes of HOG salmon was harvested during 2020 |
| 2021 | The Company raised approximately NOK 341 million in net proceeds in a private placement completed in February 2021 and started trading at Euronext Growth Oslo on the 19th of February. |
The Group's principal activity is salmon farming, producing smolt in its own freshwater hatchery and farming salmon at sea before the fish is harvested and finally sold to the market.
The Group has a modern freshwater hatchery in Norðurbotn (Tálknafjörður), using RAS technology. The hatchery is the largest single investment by the Group at NOK 300 million and is 100% owned by Arctic Fish. It has access to natural water temperatures of between 6°C and 22°C all year round and good geothermic conditions. The hatchery has a proven record of smolt production, with roughly 12 million smolt having been produced at the hatchery since 2017. The Group also owns a 36.3 km2 land area in close proximity to the smolt facility, which it is using for a smolt facility expansion. The construction project is well underway and has started as expected, with timing and cost estimations on track.
The Group's seawater sites are strategically located in all fjords on the West Coast of Iceland, with ten sites with granted licenses, and another three sites with license applications pending. This ensures that production may be alternated to minimise biological risk with a proven low mortality rate and feed conversion ratio.
The Group currently holds licenses for a production capacity of 23,100 tonnes
MAB with additional applications for 8,800 tonnes MAB that the Group expects to receive of Q4 2021 and in early 2022.
Existing licenses are divided into 17,800 tonnes MAB of salmon and 5,300 tonnes MAB of trout that is in process of being converted to salmon licenses in Q4 2021 and in early 2022.
All processing of the Group's salmon is currently handled externally through a contractor at a processing facility in Bildudalur, Arnarfjörður. When the fish are ready for harvesting, the fish are transported from different locations with well boats. The Group is in dialogue to increase harvesting capacity or, potentially, build a harvesting plant. The Group considers the current slaughtering price as high and there is ongoing work on new and more modern harvesting solutions.
The fish are currently sold "Free Carriage" through a sales agreement with Seaborn AS, a major distributor of Icelandic and Norwegian salmon. The Group has a global footprint with sales in all major markets, with strategic marketing activities focussing in the long term on more high paying markets. Current export routes have developed positively, and there is potential to enter new markets in the future efficiently.
The third quarter performance will be broken down into the main operating categories, investments, and financing. In brackets some historical performance for the year 2020 is provided.
(Figures in brackets = 2020, unless otherwise specified).
Arctic Fish posted operating revenues of NOK 161.0 million (Q3-2020: NOK 127.7 million) in the third quarter of 2021, an increase of 26.1 % from the corresponding prior-year period. The Group achieved an operational EBIT of NOK 26.9 million (Q3-2020: NOK -1.3 million), an increase of NOK 28.2 million. The group recognised a negative fair value adjustment of NOK -24.2 million (Q3-2020: NOK 0 million) of the biomass in sea, a decrease of NOK 24.2 million compared to the corresponding quarter in 2020, as no fair value adjustments were used in last year's third quarter. The negative fair value adjustment is due to harvesting plan alterations.
From farming operations there were harvested 2,925 tonnes (Q3-2020: 2,788 tonnes) gutted weight in the quarter, an increase of 5% from the corresponding quarter last year. The farming operations achieved a farming operational EBIT pr. kg of NOK 10.6 (Q3-2020: NOK 0.3 pr kg). The increase in operational EBIT pr. kg is due to higher salmon price achievement on the harvested quantities sold, with production costs slightly increasing year over year.
Net financial costs were NOK 5.1 million (Q3-2020: NOK 4.0 million), difference from previous quarter relate to currency rate differences.
At the end of the reporting period, total assets amounted to NOK 1,303 million, a decrease of NOK 8 million from the prior quarter end. The change in total assets
is attributable to several factors. Property, plant, and equipment decreased by NOK 1 million. Receivables increased by NOK 3 million, and bank deposits decreased by NOK 27 million. Biological assets and feed inventories increased by 15 million NOK from the end of the last quarter.
The Group's net interest-bearing debt (NIBD) increased by NOK 4 million, from NOK 179 million at the end of the second quarter of 2021 to NOK 183 million at the end of the third quarter 2021. The increase is attributable to investments in fixed assets and working capital changes.
At the end of the quarter, the Group's equity totalled NOK 940 million, a decrease of NOK 4 million from the end of the previous quarter. The equity ratio at the end of the quarter was 72 %.
The Group sells all harvested salmon FCA Bildudalur. The sold volume HOG was 2,925 tonnes (in Q3 2020 2,788 tonnes and 7,443 tonnes in the full year). The average price was 55.1 NOK (in Q3 2020 the average price was 44.5 NOK
and the average price for the year 2020 was 46 NOK). The price achievement developed positively mostly due to a demand shift after Covid-19 restrictions were lifted.
The price achievement in the quarter improved by 10.5 NOK pr. kg. compared to the previous year or increased by 23.7%. The price achievement increased by 0.3 NOK pr. kg from Q2-2021.
The biomass at the end of the quarter was 10,945 tonnes in the sea and the closing average weight was close to 2.3 kgs, resulting in both larger fish and more biomass in the sea compared to Q3 2020 (at the same time in 2020 the biomass was 10,205 tonnes in the sea and average weight 1.9 kgs).
From a production cost perspective, the first quarter 2021 was the best performance in the history of the company at 38.8 NOK pr. kg.
In Q2 2021 the harvesting was from a different site that had higher overall production costs. The production costs rose in that quarter to 45.1 NOK pr. kg.
The third quarter showed signs of a minor decrease due to good growth with the production costs amounting to 44.5 NOK pr.kg within the quarter. In the second and third quarter fish was harvested from the same site.
The production costs are expected to slightly decrease in the 4 th quarter 2021 as we are starting to harvest from the 2020 generation.
The production so far this year has been better than expected and will increase the estimated harvest volume for 2022 to 13 thousand tonnes.
In the smolt facility at the end of the period there are 4.3 million fry and smolt with a very similar size distribution as at the same time in the previous year (Q3- 2020: 3.9 million fry and smolt).
In the quarter there were ongoing investments for the current year's growth. The main investments made were in Cages, Moorings and other farming and production equipment.
Investments have already started in the smolt expansion as construction work has commenced with the chosen contractors Eyvi from Norway for the technical aspects, including RAS system and Eykt a leading Icelandic contractor for the civil works.
The harvesting capacity investment project is ongoing as planned and site selection is at the final stages, with technical plans already finalized for the site of choice.
Arctic Fish holding was admitted to trading on the Euronext Growth Oslo under the trading symbol "AFISH" with an Initial Public Offering (IPO) on the 19th of February 2021. The listing and private placement before attracted very strong interest from Norwegian, Icelandic, Nordic, and international high-quality institutional investors. Furthermore, four cornerstone investors subscribed for and were allocated Offer Shares at the Offer Price of 61.20 NOK, for a total amount of NOK 97 million distributed as follows: 50 million NOK from Nordea Asset Management / 28 million NOK from Birta Pension Fund / 15 million NOK from Vestmannaeyja Pension Fund / 4 million NOK from Vördur tryggingar hf.
As of 30 th of September the company has 31,876,653 shares outstanding and Arctic Fish Holding does not own any of its own shares. The share price at the start of the quarter was 59.10 NOK pr. share. Closing price at the end of Q3 21 was 63.00 NOK pr. share, or an increase of 6,5% from last quarter. The stock traded at a high of 68.50 and a low of 56.00 within the quarter. 391 trades were executed, with the number of shares traded amounting to 404,689 shares.
In general, there is a positive view on the salmon price for the fourth quarter 2021 due to expected negative global harvest growth of 3%. Total sold volumes are expected to be 11,500 tonnes in 2021 and 13,000 tonnes in 2022.
Construction project expenditure on the smolt expansion was the key investments in the quarter. Minor investments were made in farming and other smolt production investments.
A significant milestone was reached when MAST (Iceland Food and Veterinary Authority) and Umhverfisstofnun (The Environment Agency of Iceland) have both advertised their proposal of new farming licences for Arctic Sea Farm a 100% owned subsidiary of Arctic Fish Holding AS, for 4,000 tonnes (MAB) in Arnarfjordur. This is a new license in a fjord and at sites that Arctic Fish has not operated before.
Within the course of 2022 the Group expects to receive the following salmon sea farming licenses:
• Conversion of 5,300 tonnes of trout licenses to salmon licenses and further expansion up to 10,100 tonnes in Ísafjarðardjúp.
The Group has already put out 2.7 million smolt for the year at an average weight of 161 gr. The output was in line with the schedule and biological budgets. In 2022 an expected output will be 3.5 million smolt.
The group has already received and hatched the first batch of organic eggs, that are scheduled for release in Ísafjarðardjúp.
We declare that to the best of our knowledge, the information provided in this report is fair and accurate and that the report is not subject to any material omissions, and that all relevant information is included in this report to be published to the market.
8 th of November 2021
Svein Sivertsen Chairman
Charles Hoestlund Board member
Ola Loe Board member
Nicolaj Refshall Weiergang Board member
Hildur Árnadóttir Board member
The Management of Arctic Fish Holding AS
Stein Ove Tveiten CEO
Neil Shiran Thorisson CFO
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| (NOK '000) | 2021 | 2020 | 2021 | 2020 | 2020 |
| Operating revenues | 161.000 | 127.659 | 429.642 | 245.158 | 375.667 |
| Cost of goods sold | 68.516 | 80.279 | 208.457 | 99.843 | 192.800 |
| Salaries | 17.253 | 10.297 | 42.624 | 30.093 | 42.025 |
| Depreciation | 11.961 | 9.842 | 33.562 | 28.358 | 40.113 |
| Other operating costs | 36.366 0 |
28.257 | 85.584 | 68.838 | 94.410 |
| Operational EBIT | 26.904 | -1.017 | 59.414 | 18.026 | 6.319 |
| Fair value adjustments | -24.183 | 0 | 58.837 | 0 | -4.638 |
| Production tax | -818 | -312 | -3.054 | -312 | -312 |
| EBIT | 1.904 | -1.328 | 115.198 | 17.714 | 1.369 |
| Other net financial items | -5.141 | -4.044 | 2.286 | -19.071 | -39.870 |
| Earnings before tax (EBT) | -3.237 | -5.373 | 117.484 | -1.357 | -38.500 |
| Taxes | 0 | 0 | 0 | 0 | 0 |
| Net profit/loss | -3.237 | -5.373 | 117.484 | -1.357 | -38.500 |
| Profit attributable to: | |||||
| Parent company shareholders | -3.237 | -5.373 | 117.484 | -1.357 | -38.500 |
| Minority interests | 0 | 0 | 0 | ||
| Earnings per share (NOK) | -0,10 | -0,13 | 3,69 | -0,04 | -1,21 |
| Earnings per share - diluted | -0,10 | -0,13 | 3,69 | -0,04 | -1,21 |
| COMPREHENSIVE INCOME STATEMENT | |||||
| Q3 | Q3 | YTD | YTD | FY |
| (NOK '000) | 2021 | 2020 | 2021 | 2020 | 2020 |
|---|---|---|---|---|---|
| Net profit/loss | -3.237 | -5.373 | 117.484 | -1.357 | -38.500 |
| Total comprehensive income | -3.237 | -5.373 | 117.484 | -1.357 | -38.500 |
| Total comprehensive income attributable to: | |||||
| Parent company shareholders | -3.237 | -5.373 | 117.484 | -1.357 | -38.500 |
| (NOK '000) | 30.9.2021 | 30.6.2021 | 30.9.2020 | 31.12.2020 |
|---|---|---|---|---|
| Intangible assets | 49.340 | 48.243 | 31.914 | 34.297 |
| Property, plant and equipment | 605.124 | 605.706 | 545.257 | 559.988 |
| Non-current financial assets | 629 | 629 | 623 | 626 |
| Non-current assets | 655.094 | 654.579 | 577.794 | 594.911 |
| Biological assets | 496.880 | 469.846 | 398.415 | 402.191 |
| Other inventory | 18.800 | 30.900 | 18.536 | 27.046 |
| Receivables | 76.480 | 73.331 | 110.675 | 34.528 |
| Bank deposits | 55.517 | 82.701 | 54.088 | 79.171 |
| Current assets | 647.676 | 656.777 | 581.714 | 542.936 |
| TOTAL ASSETS | 1.302.770 | 1.311.356 | 1.159.508 | 1.137.847 |
| Share capital | 31.877 | 31.877 | 457.719 | 689.476 |
| Other equity | 908.552 | 911.791 | -173.529 | -210.672 |
| Equity | 940.429 | 943.668 | 284.191 | 478.805 |
| Deferred tax | 2.506 | 2.506 | 2.506 | 2.506 |
| Provisions | 2.506 | 2.506 | 2.506 | 2.506 |
| Long-term interest-bearing debt | 201.720 | 221.242 | 433.217 | 245.184 |
| Short-term interest-bearing debt | 36.621 | 40.125 | 279.112 | 301.154 |
| Trade payables | 112.110 | 93.003 | 152.336 | 100.703 |
| Other current liabilities | 9.384 | 10.812 | 8.147 | 9.495 |
| Current liabilities | 158.115 | 143.941 | 439.594 | 411.353 |
| TOTAL EQUITY AND LIABILITIES | 1.302.770 | 1.311.356 | 1.159.508 | 1.137.847 |
| Equity allocated to parent |
|||||||
|---|---|---|---|---|---|---|---|
| 30.9.2021 | company shareholders |
Non | |||||
| Treasury | controlling | ||||||
| (NOK '000) | Share capital | shares | Retained earnings | Total | interests | Total equity | |
| Equity at 01.01.2021 | 689.476 | 0 | -210.672 | 478.805 | 0 | 478.805 | |
| Total comprehensive income | 0 | 0 | 117.484 | 117.484 | 0 | 117.484 | |
| Transactions with shareholders | |||||||
| Reclassification due to new parent | -689.476 | 12.888 | -676.588 | -676.588 | |||
| Issued share capital | 26.158 | 650.431 | 676.588 | 676.588 | |||
| Issued share capital | 5.719 | 344.281 | 350.000 | 350.000 | |||
| Transaction costs | -5.859 | -5.859 | -5.859 | ||||
| Total transactions with shareholders | -657.600 | 0 | 1.001.740 | 344.141 | 0 | 344.141 | |
| Equity at 30.9.2021 | 31.877 | 0 | 908.553 | 940.429 | 0 | 940.429 |
| Equity allocated to parent company |
|||||||
|---|---|---|---|---|---|---|---|
| 31.12.2020 (NOK '000) |
shareholders Share capital |
Treasury shares |
Retained earnings | Total | Non controlling interests |
Total equity | |
| Equity at 31.12.2019 (ICEGAAP) | 457.719 | 0 | -189.415 | 268.304 | 0 | 268.304 | |
| Effect of implementation IFRS | 17.244 | 17.244 | 17.244 | ||||
| Equity at 01.01.2020 (IFRS) | 457.719 | 0 | -172.171 | 285.548 | 0 | 285.548 | |
| Total comprehensive income | 0 | 0 | -38.500 | -38.500 | 0 | -38.500 | |
| Transactions with shareholders | |||||||
| Issued share capital | 231.757 | 231.757 | 231.757 | ||||
| Total transactions with shareholders | 231.757 | 0 | 0 | 231.757 | 0 | 231.757 | |
| Equity at 31.12.2020 | 689.476 | 0 | -210.672 | 478.805 | 0 | 478.805 |
| Q3 | Q3 | YTD | YTD | FY | |
|---|---|---|---|---|---|
| (NOK '000) | 2021 | 2020 | 2021 | 2020 | 2020 |
| Operational EBIT | 26.904 | -1.017 | 59.414 | 18.026 | 6.319 |
| Adjusted for: | |||||
| Depreciation | 11.961 | 9.842 | 33.562 | 28.358 | 40.113 |
| Production tax | -818 | -312 | -3.054 | -312 | -312 |
| Change in inventories/biological assets | -39.117 | -58.064 | -27.605 | -129.791 | -146.716 |
| Change in account receivables and accounts payables | 15.958 | 21.662 | -30.545 | 45.442 | 69.957 |
| Change in other current assets and liabilities | -1.429 | 3.398 | -112 | 4.508 | 5.856 |
| Net cash flow from operating activities | 13.459 | -24.491 | 31.660 | -33.769 | -24.782 |
| Cash flow from investing activities | 0 | ||||
| Payments for purchase of fixed assets and licenses (MAB) | -12.476 | -13.822 | -93.745 | -70.833 | -99.705 |
| Net cash flow from investing activities | -12.476 | -13.822 | -93.745 | -70.833 | -99.705 |
| Cash flow from financing activities | 0 | ||||
| Proceeds from borrowings | 0 | 32.464 | 0 | 79.520 | 597.944 |
| Repayment of borrowings | -19.822 | -7.307 | -69.738 | -31.692 | -622.640 |
| Current debt change | -3.203 | 63.384 | -238.258 | 119.772 | 26.306 |
| Issued new share capital | 0 | 344.140 | 0 | 231.757 | |
| Net interest payments | -5.496 | -4.044 | -16.499 | -19.071 | -39.870 |
| Adjustment due to Currency difference interest bearing debt | 355 | 18.786 | 0 | 0 | |
| Net cash flow from financing activities | -28.167 | 84.497 | 38.431 | 148.529 | 193.497 |
| Net increase in bank deposits | -27.183 | 46.184 | -23.654 | 43.926 | 69.010 |
| Bank deposits as of start of period | 82.701 | 7.905 | 79.171 | 10.162 | 10.162 |
| Bank deposits as of 30th of September | 55.517 | 54.088 | 55.517 | 54.088 | 79.171 |
Arctic Fish Holding AS and its subsidiaries (collectively "the Group", or "Arctic Fish Group") is a publicly listed company on Euronext Growth, with the ticker symbol AFISH.
Arctic Fish Holding AS is a Company incorporated in Norway with headquarters in Iceland. The address of its registered office is Ferjemannsveien 10, 7014 Trondheim, Norway. Arctic Fish´s headquarter is located at Sindragata 10, 400 Isafjordur, Iceland.
The consolidated financial statements of the Group were authorised for issue in accordance with a resolution of the Board of Directors on 8th of November 2021.
The structure of the Group was changed in 2021. Arctic Fish Holding AS is a newly established entity that owns 100% of the shares in Arctic Fish ehf, the Icelandic mother company of the Icelandic subsidiaries Arctic Oddi, Arctic Smolt and Arctic Sea Farm.
In the consolidated financial statements of Arctic Fish Group the values of Arctic Fish Iceland and subsidiaries are continued. The Group has accounted for the reorganization as a continuation of Arctic Fish ehf. The consolidated financial statements are presented as if the Group and Arctic Fish Holding AS as the parent company, had always existed.
Comparative financial information is provided for the preceding period in the Consolidated statement of comprehensive income, Consolidated statement of financial position and Consolidated statement of cash flows.
These condensed, consolidated interim financial statements have been drawn up in accordance with International Financial Reporting Standards (IFRSs) and such interpretations as are determined by the EU and published by the
International Accounting Standards Board, including the interim reporting standard (IAS 34). The interim financial statements do not include all the information required of an annual financial report.
The condensed consolidated interim financial statements have not been audited. As a result of rounding differences, numbers or percentages may not add up to the total.
Following is a reconciliation of the 2020 financial statements that were previously prepared for the Icelandic parent company Arctic Fish ehf. in accordance with the Financial Statements Act (IS-GAAP) and the Regulation on the Presentation and Contents of the Financial Statements and Consolidated Financial Statements. The 2020 financial statements have been restated in accordance with International Financial Reporting Standards (IFRSs).
The consolidated financial statements are presented in Norwegian Kroner (NOK) which is the functional currency of the Group as of 01.01.2021 and onwards.
| (NOK '000) | ICEGAAP | IFRS adj. | Notes | IFRS |
|---|---|---|---|---|
| Intangible assets | 22.581 | 5.569 | A | 28.150 |
| Property, plant and equipment | 506.610 | 506.610 | ||
| Non-current financial assets | 559 | 559 | ||
| Non-current assets | 529.750 | 5.569 | 535.319 | |
| Inventory and biological assets | 275.485 | 11.675 | B | 287.160 |
| Receivables | 66.566 | 66.566 | ||
| Bank deposits | 10.162 | 10.162 | ||
| Current assets | 352.213 | 11.675 | 363.888 | |
| TOTAL ASSETS | 881.963 | 17.244 | 899.207 | |
| Share capital | 457.719 | 457.719 | ||
| Other equity | -189.415 | 17.244 | A,B | -172.171 |
| Non-controlling interests | 0 | 0 | ||
| Equity | 268.304 | 17.244 | 285.548 | |
| Pensions | 0 | 0 | ||
| Deferred tax | 2.506 | 2.506 | ||
| Provisions | 2.506 | 0 | 2.506 | |
| Long-term interest-bearing debt | 375.230 | 375.230 | ||
| Short-term interest-bearing debt | 169.499 | 169.499 | ||
| Trade payables | 62.785 | 62.785 | ||
| Tax payable | 0 | 0 | ||
| Other current liabilities | 3.639 | 3.639 | ||
| Current liabilities | 235.923 | 0 | 235.923 | |
| TOTAL EQUITY AND LIABILITIES | 881.963 | 17.244 | 899.207 |
A: The IFRS adjustment reflects the difference betw een the booked value of goodw ill and licenses in Arctic Fish ehf and the cost value at 1 January 2020
B: Biological assets have previously been calculated using cost method. According to IFRS, biological assets are valued at fair value less costs to sell (see note 3). The IFRS adjustment reflects the difference betw een these tw o accounting principes.
The operating segment Farming is used by Group management to assess performance and profitability at a strategic level. The Group management is defined as the chief operating decision-makers. The fish farming business includes smolt production, salmon farming, harvesting activities and sales of the harvested fish. All farming sites are located in the Westfjords of Iceland. Group management reviews monthly reports in connection with the production sites and operating segments. Performance is evaluated based on operating results (EBIT).
The eliminations in year to date in 2021 in the table below relates to administration costs and some non-recurring costs related to the listing of the Group.
| Farming | Eliminations / other | TOTAL | ||||
|---|---|---|---|---|---|---|
| (NOK '000) | Q3 2021 | Q3 2020 | Q3 2021 | Q3 2020 | Q3 2021 | Q3 2020 |
| Total sales revenues | 161.000 | 127.659 | 161.000 | 127.659 | ||
| Operating costs | 130.143 | 126.815 | 3.954 | 1.860 | 134.097 | 128.675 |
| Operational EBIT | 30.858 | 843 | -3.954 | -1.860 | 26.904 | -1.017 |
| Fair value adjustments Production tax |
-24.183 -817 |
0 -312 |
-24.183 -818 |
-312 | ||
| EBIT | 5.858 | 531 | -3.954 | -1.860 | 1.904 | -1.328 |
| Volume harvested (HOG) | 2.925 | 2.788 | 2.925 | 2.788 | ||
| Operational EBIT per kg Farming | 10,55 | 0,30 | 10,55 | 0,30 |
| Farming | Eliminations / other | TOTAL | ||||
|---|---|---|---|---|---|---|
| (NOK '000) | YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 |
| Total sales revenues | 429.642 | 229.157 | 16.001 | 429.642 | 245.158 | |
| Operating costs | 359.642 | 210.555 | 10.586 | 16.577 | 370.228 | 227.132 |
| Operational EBIT | 70.000 | 18.602 | -10.586 | -576 | 59.414 | 18.026 |
| Fair value adjustments | 58.837 | 0 | 0 | 58.837 | 0 | |
| Production tax | -3.054 | -312 | -3.054 | -312 | ||
| EBIT | 125.783 | 18.290 | -10.586 | -576 | 115.198 | 17.714 |
| Volume harvested (HOG) Operational EBIT per kg |
8.541 | 4.456 | 8.541 | 4.456 | ||
| Farming | 8,20 | 4,17 | 8,20 | 4,17 |
In accordance with IAS 41, the biomass is recognised at fair value. The fair value is calculated in accordance with IFRS 13. Adjustments to the fair value of the biomass are presented on a separate line in the income statement. The technical model for calculating fair value is a present value model. Present value is calculated for the biomass on each site/project by estimating the future sales value less remaining production costs discounted to the present value at the balance sheet date.
The fair value of fish in the sea is calculated in the present value model as a function of the expected biomass at the time of harvest multiplied by the expected sales price. For fish that are not harvestable, estimated remaining costs to breed the fish to its harvestable weight are deducted. Cash flows are discounted monthly using a discount factor. The discount factor consists of three main components: 1) risk for events that affect cash flow, 2) hypothetical license and site rent and 3) the time value of money. The discount factor used is 4% (the discount factor has increased from the 2% used in the previous quarters). Expected biomass (volume) is based on the estimated number of individuals in the sea, adjusted for expected mortality until harvesting and multiplied by the expected harvest weight per individual at the time of harvest. The measuring unit is the individual fish, but for practical reasons the calculation is made on site level. Live weight of fish in the sea is translated into gutted weight to get the same measurement unit as the prices are set in.
The price is calculated based on forward prices from Fish Pool. The forward price for the period in which the fish expected to be harvested, is used in the calculation of expected cash flow. The price quoted by Fish Pool is adjusted to reflect an ex harvesting plan price achievement and is a reference price. This price is further adjusted for expected harvest costs (well boat, harvest and packing, sales commission), and the governmental production taxes. Adjustments for expected size differences and quality differences are also made. The adjustment in relation to the reference price is done at site level.
The principle of highest and best use, according to IFRS 13 is the basis for the valuation and classification. In the fair value calculation, optimal harvest weight is defined as harvest weight according to harvest plans.
| Book value of inventory: | ||||
|---|---|---|---|---|
| (NOK '000) | 30.9.2021 | 30.6.2021 | 30.9.2020 | 31.12.2020 |
| Raw materials | 18.800 | 30.900 | 18.536 | 27.046 |
| Biological assets - freshwater | 25.772 | 27.349 | 21.759 | 26.204 |
| Biological assets - seawater | 471.108 | 442.497 | 376.656 | 375.987 |
| Finished goods | 0 | 0 | 0 | 0 |
| Total inventory | 515.680 | 500.746 | 416.951 | 429.237 |
| (NOK '000) | 30.9.2021 | 30.6.2021 | 30.9.2020 | 31.12.2020 |
|---|---|---|---|---|
| Biological assets at cost | 430.708 | 379.490 | 386.442 | 395.535 |
| Fair value adjustments of the biomass | 66.172 | 90.356 | 11.973 | 6.656 |
| Book value biological assets | 496.880 | 469.846 | 398.415 | 402.191 |
| Specification of biological assets - tonnes | ||||
|---|---|---|---|---|
| (NOK '000) | Q3 2021 | Q2 2021 | Q3 2020 | FY 2020 |
| Opening balance biological assets | 9.203 | 8.585 | 7.298 | 6.042 |
| Increase due to fish put in the sea | 149 | 240 | 200 | 413 |
| Increase due to production in the period | 5.053 | 2.686 | 6.169 | 13.834 |
| Reduction due to mortality in the period | -53 | -182 | -134 | -971 |
| Reduction due to harvesting in the period | -3.409 | -2.125 | -3.328 | -8.805 |
| Non-recurring events and other | 0 | 0 | 0 | 0 |
| Closing balance biological assets | 10.945 | 9.203 | 10.205 | 10.513 |
| (NOK '000) | Q3 2021 | Q2 2021 | Q3 2020 | FY 2020 |
|---|---|---|---|---|
| Opening balance biological assets | 469.847 | 401.730 | 348.390 | 276.544 |
| Increase due to production in the period | 152.025 | 91.441 | 133.439 | 447.655 |
| Non-recurring events and other at cost | 0 | 0 | ||
| Reduction due to harvesting in the period | -100.809 | -66.072 | -83.414 | -317.370 |
| Fair value adjustments of the biological assets | -24.183 | 42.748 | 0 | -4.638 |
| Closing balance biological assets | 496.880 | 469.847 | 398.415 | 402.191 |
| 2.291 | 1.432 | |||
|---|---|---|---|---|
| 52.962 | 8.655 | 61.617 | ||
| 1.291 | 3.489 | 129.073 | 21.092 | 150.165 |
| 1.239 | 6.025 | 222.900 | 36.425 | 259.325 |
| 4.822 | 10.945 | 404.936 | 66.172 | 471.108 |
| Number of fish (1000) |
Biomass (tonnes) |
Production costs |
Fair value adjustments |
Accounted value |
| 1.233 | 368 | 14.071 | 3.611 | 17.682 |
| 2.417 | 4.636 | 177.377 | 45.513 | 222.890 |
| 792 | 4.200 | 160.693 | 41.232 | 201.925 |
| 442.497 | ||||
| 4.442 | 9.204 | 352.141 | 90.356 |
| Groups of biological assets in sea, status as of 30.09.2020 |
Number of fish (1000) |
Biomass (tonnes) |
Production costs |
Fair value adjustments |
Accounted value |
|---|---|---|---|---|---|
| Smaller than 1 kg | 2.741 | 1.426 | 50.944 | 1.673 | 52.617 |
| 1-4 kg | 1.291 | 2.947 | 105.329 | 3.458 | 108.787 |
| Larger than 4 kg | 1.201 | 5.832 | 208.410 | 6.842 | 215.252 |
| Biological assets | 5.232 | 10.205 | 364.683 | 11.973 | 376.656 |
| Groups of biological assets in sea, status as of 31.12.2020 |
Number of fish (1000) |
Biomass (tonnes) |
Production costs |
Fair value adjustments |
Accounted value |
|---|---|---|---|---|---|
| Smaller than 1 kg | 1.219 | 556 | 19.533 | 352 | 19.885 |
| 1-4 kg | 2.581 | 6.463 | 227.051 | 4.092 | 231.143 |
| Larger than 4 kg | 688 | 3.494 | 122.747 | 2.212 | 124.959 |
| Biological assets | 4.488 | 10.513 | 369.331 | 6.656 | 375.987 |
Fair value adjustments which are a part of the Group's EBIT, is presented on a separate line in order to give a better understanding of the Group's operating profit from goods sold. The item consists of:
| (NOK '000) | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 |
|---|---|---|---|---|
| Change in fair value adjustments of the | ||||
| biomass | -24.183 | 0 | 58.837 | 0 |
| Total fair value adjustments | -24.183 | 0 | 58.837 | 0 |
| The fair value adjustments has the following effect in the balance sheet: | ||||||
|---|---|---|---|---|---|---|
| (NOK '000) | 30.9.2021 | 30.6.2021 | 30.9.2020 | 31.12.2020 | ||
| Fair value adjustments biomass (inventory and biological | ||||||
| assets) | 66.172 | 90.356 | 11.973 | 6.656 | ||
| Net fair value adjustments in the balance sheet | 66.172 | 90.356 | 11.973 | 6.656 |
The Group conducts transactions on normal terms with associates and suppliers who are also Arctic Fish Holding shareholders.
All services and goods are purchased at arm length prices. The table below shows figures from continued operations. The Board is not aware of any changes or transactions in Q3 21 associated with related parties that in any significant way have an impact on the Group's financial position and profit for the period.
| Goods and services purchased: | |||||
|---|---|---|---|---|---|
| (NOK '000) | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | FY 2020 |
| Companies controlled by large shareholder - products purchased |
135 | 141 | 14.301 | 527 | 890 |
| Companies controlled by large shareholder - services purchased |
991 | 375 | 2.663 | 1.474 | 2.037 |
| Total goods and services purchased from related parties | 1.126 | 516 | 16.964 | 2.001 | 2.927 |
The group has to fulfil the following covenants for the Group´s main borrowings
The Equity Ratio for each Relevant Period shall at all times be equal to or exceed 40%.
Leverage: Leverage in respect of any Relevant Period specified in column 1 below shall not exceed the ration set out in column 2 below opposite that Relevant Period. Leverage means, in respect of any Relevant Period, the ratio of Total Net Interest Bearing Debt on the last day of that Relevant Period to EBITDA in respect of that Relevant Period.
| Relevant Period Expiring. | Ratio |
|---|---|
| 30 September 2021 | 5.0:1 |
| 31 December 2021 | 5.0:1 |
| 31 March 2022 and all | 4.5:1 |
| subsequent Relevant Periods |
Minimum EBITDA (measured on a rolling 12-month basis), shall during the Relevant Period ending on and 30th September 2021 exceed NOK 30,000,000.
Net interest-bearing debt is defined as the net of long-term debt, short-term debt and bank deposits. The measure is useful and necessary information to investors and other users of the financial statements to assess the net of the interest-bearing external capital used to finance the group. The measure is used to calculate return on capital employed and highlights the Group's ability to take on more debt.
| (NOK '000) | 30.09.2021 | 31.12.2020 |
|---|---|---|
| Reported long-term interest-bearing debt | 201.720 | 245.184 |
| Reported short-term interest-bearing debt | 36.621 | 301.154 |
| Reported bank deposits | -55.517 | -79.171 |
| Total net interest bearing debt | 182.825 | 467.166 |
| Lease liabilities (IFRS 16 effects) | 0 | 0 |
| NIBD according to bank covenant | 182.825 | 467.166 |
| (NOK '000) | 30.09.2021 | 31.12.2020 |
|---|---|---|
| Reported equity | 940.429 | 478.805 |
| Reported total assets | 1.302.770 | 1.137.847 |
| Equity ratio | 72,2 % | 42,1 % |
The 12 month rolling EBITDA on the 30th of September 2021 was 88.2 million NOK.
At the end of the first quarter of 2021, the Group is in compliance with the terms and covenants of the loan agreement.
| Rank | Name | # Of shares | % Ownership |
|---|---|---|---|
| 1 | NORWAY ROYAL SALMON ASA | 16.346.824 | 51,28% |
| 2 | BREMESCO HOLDINGS LIMITED | 9.104.582 | 28,56% |
| 3 | J.P. Morgan Bank Luxembourg S.A. | 2.967.456 | 9,31% |
| 4 | Landsbankinn hf. | 485.675 | 1,52% |
| 5 | VERDIPAPIRFONDET PARETO INVESTMENT | 346.235 | 1,09% |
| 6 | KVERVA FINANS AS | 258.000 | 0,81% |
| 7 | VERDIPAPIRFONDET NORDEA AVKASTNING | 237.107 | 0,74% |
| 8 | VERDIPAPIRFONDET NORDEA KAPITAL | 193.100 | 0,61% |
| 9 | VERDIPAPIRFONDET NORDEA NORGE VERD | 168.033 | 0,53% |
| 10 | MP PENSJON PK | 165.000 | 0,52% |
| 11 | PACTUM AS | 152.751 | 0,48% |
| 12 | CLEARSTREAM BANKING S.A. | 148.765 | 0,47% |
| 13 | VERDIPAPIRFONDET EIKA SPAR | 136.242 | 0,43% |
| 14 | VERDIPAPIRFONDET EIKA NORGE | 99.750 | 0,31% |
| 15 | J.P. Morgan Bank Luxembourg S.A. | 83.849 | 0,26% |
| 16 | ROTH | 80.000 | 0,25% |
| 17 | VERDIPAPIRFONDET NORDEA NORGE PLUS | 74.904 | 0,23% |
| 18 | SKEIE ALPHA INVEST AS | 69.053 | 0,22% |
| 19 | Euroclear Bank S.A./N.V. | 68.726 | 0,22% |
| 20 | State Street Bank and Trust Comp | 51.636 | 0,16% |
| Ownership of 20 largest shareholders | 31.237.688 | 98,00% | |
| Total number of shares | 31.876.653 | 100,00% |
Arctic Fish Holding AS does not own any of its own shares.
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