Bakkafrost P/f

Interim / Quarterly Report • Nov 6, 2018

INTERIM REPORT

Q3 2018

HARVEST VOLUME TGW

OPERATIONAL EBIT MDKK

www.bakkafrost.com

Table of Contents

ig h l ig h H ts	2
rd f he Su t 3 Q te 2 0 1 8 ar ua mm y o r r
d he irs ine hs f t F t N Mo t 2 0 1 8 . an n o	3

ina ia l iew F Re nc v	4
Inc S ta te t om e me n	4
S f ina ia l i ion ta te t o F Po t me n nc s	4
h low Ca F s	5
ing Fa Se t rm g me n	6
Se V A P t g me n	7
F O F Se t g me n	8

S ta te t by t he t a d t he Ma me n na g em en n
d o f ire he im Bo D to t In te Re t 1 2 ar c rs on r p or

l i da d Co te Inc S ta te t 1 ns o om e me n	3
Co l i da d S f te ta te t o ns o me n
he ive Co Inc 1 mp re ns om e	3
l i da d f Co te S ta te t o ns o me n
ina ia l i ion F Po t 1 nc s	4
l i da d h low Co te Ca F S ta te t 1 ns o s me n	5
l i da d f Co te S ta te t o ns o me n
C ha in i Eq ty 1 ng es u	6

loo k Ou t 9	he No te to t Ac t 1 7 s co un
is ks R 1 1
f he f he Ev ts te t Da te t en a r o
ina ia i ion S ta te t o f F l Po t 1 1 me n nc s	Co ta ts 2 7 n c

Highlights

	Q 3	Q 3	YT D	YT D		Q 3	Q 3	YT D	YT D
DK K 1 00 0 ,	20 18	20 17	20 18	20 17	DK K 1 00 0 ,	20 18	20 17	20 18	20 17
INC OM E S TA TE ME NT					FIN AN CIA L P OS ITI ON AN D C AS H F LO W
ing Gro - O rat up pe re ve nue	62 1, 60 2	80 4, 15 0	2, 42 7, 07 4	2, 86 3, 97 9	tal s*** To As set	5, 79 0, 73 1	5, 15 5, 51 6	5, 79 0, 73 1	5, 15 5, 51 6
ion Gro - O rat al EB IT* up pe	16 8, 28 8	25 1, 79 6	84 4, 40 3	1, 04 6, 40 7	uit Eq *** y	4, 08 1, 97 4	3, 62 6, 42 9	4, 08 1, 97 4	3, 62 6, 42 9
Gro - E BIT up	43 22 8 4,	84 08 2 ,	1, 18 9, 12 8	67 8, 8 44	uit ati o* Eq y r	70 %	70 %	70 %	70 %
rof it f the rio d Gro - P up or pe	35 5, 85 5	56 21 5 ,	96 6, 91 2	53 3, 31 1	t in -be ari de bt * Ne ter est ng	28 6, 41 9	25 8, 07 0	28 6, 41 9	25 8, 07 0
					h f low fro ion Cas rat m o pe s	32 4, 21 6	33 3, 60 3	97 1, 85 8	1, 19 6, 90 4
Op tio l E BIT * ( Far mi and VA P) ( DK K) era na ng	14 2, 38 8	21 2, 22 1	73 5, 50 5	96 7, 38 5	Cas h f low fro m f ina nci ng	-13 7, 89 2	-22 1, 72 1	-59 1, 31 3	-61 7, 72 8
Op tio l E BIT / kg ( Far mi and VA P) ( DK K) era na ng	19 .73	18 .32	22 .73	22 .42
tio l E / kg ( mi and P) ( K) Op BIT Far VA NO era na ng	25 .34	23 .02	29 .25	27 .82	PR OF ITA BIL ITY
					sic rni har e ( K) Ba DK ea ngs pe r s	7.3 2	1.1 6	19 .88	10 .97
Far mi - O ati ng per ng rev en ue	44 5, 07 7	61 9, 28 9	1, 88 6, 51 5	2, 40 9, 27 8	Dil ute d e ing sha ( DK K) arn s p er re	7.3 2	1.1 6	19 .88	10 .97
Far mi - O ati al EB IT* ng per on	13 9, 62 8	21 6, 69 1	76 1, 25 9	1, 07 9, 37 3	RO CE	3.2 %	5.4 %	17 .0%	23 .4%
mi ati al in Far - O EB IT m ng per on arg	31 .4%	35 .0%	40 .4%	44 .8%
mi ati al IT/ kg ( K) Far - O EB DK ng per on	19 .35	18 .70	23 .53	25 .02	VO LU ME S
mi ati ( K) Far - O al EB IT/ kg NO ng per on	24 .85	23 .51	30 .28	31 .05	s ( ) Ha ste d v olu tgw rve me	7, 21 7	11 58 5 ,	32 35 6 ,	43 14 5 ,
					rod d v olu s ( tgw ) VA P p uce me	1, 42 5	20 9 5,	51 0 5,	14 11 8 ,
tin VA P - Op era g r ev en ue	69 22 5 ,	24 6, 23 0	25 5, 83 7	71 0, 35 5	ld f eed So to nn es	23 46 8 ,	22 32 0 ,	53 06 4 ,	59 17 9 ,
tio l E * VA P - Op BIT era na	2, 76 0	-4, 47 0	-25 75 4 ,	-11 1, 98 8	al f eed les Int to ern sa nn es	20 78 3 ,	20 39 8 ,	48 59 1 ,	55 36 3 ,
VA P - Op tio l E BIT in era na m arg	4.0 %	-1. 8%	-10 .1%	-15 .8%	Sm olt lea sed th d ( ) re ou san pcs	3, 31 6	3, 20 6	9, 22 5	6, 51 9
VA P - Op tio l E BIT / kg ( DK K) era na	1.9 4	-0. 86	-4. 67	-7. 93
Op tio l E / kg ( NO K) VA P - BIT era na	2.4 9	-1. 08	-6. 01	-9. 84
FO F - Op tin era g r ev en ue	35 4, 22 5	34 2, 13 0	98 0, 87 5	93 6, 30 4	* A lign ed for fa ir v alu dju stm ent of bi e a ass om , on	tra cts ero us con	isio in pr ov ns,	e f com rom	iat as soc es
FO F - EB ITD A	41 39 4 ,	79 49 3 ,	19 3, 87 4	17 2, 46 7	nd tax ref to No te 10 a rev en ue er –
in FO F - EB ITD A m arg	11 .7%	23 .2%	19 .8%	18 .4%	ita ** R etu l em loy ed bas ed rn on ave rag e c ap p on	tio l E op era na	BIT ref to No er –	te 10
					, *** Co ari fig ith fig s f d 2 01 ure s w ure rom en	7
K ( e) DK K/ NO ave rag	77 .85	79 .57	77 .71	80 .58	mp ng

Summary of the 3rd Quarter 2018 and the First Nine Months of 2018

(Figures in parenthesis refer to the same period last year)

The Bakkafrost Group delivered a total EBIT of DKK 434.2 million in Q3 2018. Harvested volumes were 7.2 thousand tonnes gutted weight. The combined farming and VAP segments made an operational EBIT of DKK 142.4 million. The farming segment made an operational EBIT of DKK 139.6 million. The salmon spot prices decreased in Q3 2018, compared to the previous quarter. The price decrease had a negative effect on the operational EBIT in the farming segment. The VAP segment made an operational EBIT of DKK 2.8 million. The EBITDA for the FOF segment was DKK 41.4 million.

The Group made a profit for Q3 2018 of DKK 355.9 million (DKK 56.2 million). For the first nine months of 2018, the profit was DKK 966.9 million (DKK 533.3 million).

The total volumes harvested in Q3 2018 were 7,217 tonnes gutted weight (11,585 tgw). Total harvested volumes in the first nine months of 2018 were 32,356 tonnes gutted weight (43,145 tgw). The guidance for harvest in 2018 is reduced by 3,000 tonnes gutted weight, from 49,000 to 46,000 tonnes gutted weight.

3.3 million (3.2 million) smolts were transferred during Q3 2018. During the first nine months of 2018, 9.2 million (6.5 million) smolts were transferred. One million smolts – out of the 13.9 million smolts, which were expected to be released in 2018 – will be postponed for release in 2019. Thus, the new expected smolt release for 2018 is 12.9 million smolts.

The combined farming and VAP segments made an operational EBIT of DKK 142.4 million (DKK 212.2 million) in Q3 2018. The operational EBIT per kg in Q3 2018 was DKK 19.73 (DKK 18.32), which corresponds to NOK 25.34 (NOK 23.02) for the combined farming and VAP segments. For the first nine months of 2018, the combined farming and VAP segments made an operational EBIT of DKK 735.5 million (DKK 967.4 million).

The farming segment made an operational EBIT of DKK 139.6 million (DKK 216.7 million) in Q3 2018. The harvested volumes were lower, and the average spot price was higher in Q3 2018, compared to Q3 2017. For the first nine months of 2018, the operational EBIT was DKK 761.3 million (DKK 1,079.4 million).

On 20 September 2018, Bakkafrost recorded elevated mortality level at farming site A-81 Kolbanagjógv. Poisonous species of algae were registered in the sea at the farming site A-81 Kolbanagjógv when the incident occurred. Approximately 700 thousand fish with an average weight of 500 gramme live weight died within a couple of hours. The fish at farming site A-81 Kolbanagjógv was released into the sea in June - August 2018. The Farming segment had a net expense of DKK 7.2 million in Q3 2018 due to the incident.

Farming activity has been at the farming site A-81 Kolbanagjógv for the past 30 years. Bakkafrost has not observed any similar situations, neither at farming site A-81 Kolbanagjógv, nor at any other farming sites before or after the incident. The remaining fish at farming site A-81 Kolbanagjógv has not been affected by the incident and is performing well.

The VAP segment made an operational EBIT of DKK 2.8 million (DKK -4.5 million) for Q3 2018. For the first nine months of 2018, the operational EBIT was DKK -25.8 million (DKK -112.0 million).

The FOF segment (fishmeal, oil and feed) made an EBITDA of DKK 41.4 million (DKK 79.5 million) for Q3 2018, and the EBITDA margin was 11.7% (23.2%). The EBITDA was DKK 193.9 million for the first nine months of 2018 (DKK 172.5 million), corresponding to an EBITDA margin of 19.8% (18.4%).

During Q3 2018, Havsbrún sourced 7,496 tonnes (21,937 tonnes) of raw material, and for the first 9 months of 2018, Havsbrún sourced 255,987 tonnes (291,604 tonnes) of raw material.

Bakkafrost has, through its recently established subsidiary Bakkafrost US, signed an agreement in Q2 2018 to acquire the business and assets in North Landing, which is a US salmon importer focusing on the East Coast and has a sales office, handling and processing facilities in Clifton, New Jersey, USA. Through the acquisition, Bakkafrost will have a better market access and better abilities to serve Bakkafrost's customers in the US market. The acquisition of North Landing was closed in Q3 2018.

The net interest-bearing debt amounted to DKK 286.4 million at the end of Q3 2018 (DKK 258.1 million at year-end 2017). Undrawn credit facilities amounted to DKK 1,204.9 million at the end of Q3 2018.

The equity ratio was 70% at 30 September 2018, compared to 70% at the end of 2017.

Financial Review

(Figures in parenthesis refer to the same period last year)

Income Statement

The operating revenue amounted to DKK 621.6 million (DKK 804.2 million) in Q3 2018, and for the first nine months of 2018, the operating revenue amounted to DKK 2,427.1 million (DKK 2,864.0 million).

The farming segment's harvest volume was lower, and the achieved prices were higher in Q3 2018, compared to the same quarter last year. The farming and VAP segments had lower revenues because of lower volumes, but higher prices in Q3 2018, compared to Q3 2017. The FOF segment had somewhat lower external revenue in Q3 2018, compared to Q3 2017.

Operational EBIT was DKK 168.3 million (DKK 251.8 million) in Q3 2018. The farming and FOF segments had lower operational EBIT, while the VAP segment had improved operational EBIT in Q3 2018, compared to Q3 2017. For the first nine months of 2018, the operational EBIT was DKK 844.4 million (DKK 1,046.4 million).

The fair value adjustment of the Group's biological assets amounted to DKK 293.5 million (DKK -155.1 million) in Q3 2018. The positive adjustment is due to higher forward market prices for salmon at the end of the quarter, compared to the beginning of the quarter. For the first nine months of 2018, the fair value adjustment amounted to DKK 435.4 million (DKK -334.8 million).

Change in provisions for onerous contracts amounted to DKK -11.0 million (DKK 12.2 million) in Q3 2018. For the first nine months of 2018, the change in provisions for onerous contracts amounted to DKK -17.1 million (DKK 67.4 million).

In Q3 2018, there was a loss from associated companies amounting to DKK -2.5 million (DKK -1.0 million). For the first nine months of 2018, the result from associated companies amounted to DKK -1.7 million (DKK -1.1 million).

The revenue tax amounted to DKK -14.1 million in Q3 2018 (DKK -23.7 million). The revenue tax decreased because of lower harvested volumes, compared to the same quarter last year. For the first nine months of 2018, the revenue tax was DKK -71.8 million (DKK -99.4 million).

Net interests in Q3 2018 were DKK -0.7 million (DKK -16.1 million). For the first nine months of 2018, net interests were DKK -10.2 million (DKK -27.3 million).

Net taxes amounted to DKK -77.7 million (DKK -11.7 million) in Q3 2018. For the first nine months of 2018, net taxes amounted to DKK -212.0 million (DKK -117.8 million).

The result for Q3 2018 was DKK 355.9 million (DKK 56.2 million) and for the first nine months of 2018, the result was DKK 966.9 million (DKK 533.3 million).

Statement of Financial Position

(Figures in parenthesis refer to end last year)

The Group's total assets amounted to DKK 5,790.7 million (DKK 5,155.5 million) at the end of Q3 2018.

Intangible assets increased in the quarter and amounted to DKK 388.9 million (DKK 376.7 million) at the end of Q3 2018. The increase on DKK 12.3 million is due to the acquisition of goodwill in Bakkafrost USA.

Property, plant and equipment amounted to DKK 2,788.8 million (DKK 2,570.4 million) at the end of Q3 2018. In Q3 2018, Bakkafrost made investments in PP&E amounting to DKK 127.2 million.

Non-current financial assets amounted to DKK 101.9 million (DKK 76.7 million) at the end of Q3 2018. In Q3 2018, Bakkafrost made investments in noncurrent financial assets amounting to DKK 30.0 million.

The carrying amount (fair value) of biological assets amounted to DKK 1,562.9 million (DKK 1,096.7 million) at the end of Q3 2018. Biological assets have increased due to higher fair value adjustment, compared to year end 2017. Included in the carrying amount of the biological assets is a fair value adjustment amounting to DKK 622.3 million (DKK 187.0 million) at the end Q3 of 2018.

Inventories amounted to DKK 330.9 million (DKK 305.8 million) at the end of Q3 2018. The inventories

primarily represent Havsbrún's inventory of fishmeal, fish oil and fish feed.

Total receivables, including long-term receivables, amounted to DKK 311.2 million (DKK 419.6 million) at the end of Q3 2018.

The Group's equity amounted to DKK 4,082.0 million (DKK 3,626.4 million) at the end of Q3 2018. The change in equity consists primarily of the positive result for the first nine months of 2018 and the dividend payment of DKK 510.7 million in Q2 2018.

Total non-current liabilities amounted to DKK 1,282.6 million (DKK 602.1 million) at the end of Q3 2018.

Deferred taxes and other taxes amounted to DKK 690.6 million (DKK 455.4 million) at the end of Q3 2018.

Long-term debt was DKK 592.0 million (DKK 146.7 million) at the end of Q3 2018.

At the end of Q3 2018, the Group's total current liabilities were DKK 426.2 million (DKK 926.9 million). The current liabilities consist of accounts payable and tax payable.

Derivatives amounted to DKK 0.6 million (DKK 127.3 million) at the end of Q3 2018.

Short-term interest-bearing debt amounted to DKK 0.0 million (DKK 378.3 million) at the end of Q3 2018.

The equity ratio was 70% at the end of Q3 2018, compared with 70% at the end of 2017.

Cash Flow

(Figures in parenthesis refer to the same period last year)

The cash flow from operations was DKK 324.2 million (DKK 333.6 million) in Q3 2018. The changes in receivables and current debts had a positive effect on the cash flow from operations, and changes in inventory had a negative effect. For the first nine months of 2018, the cash flow from operations was DKK 971.9 million (DKK 1.196,9 million).

The cash flow from investment activities amounted to DKK -164.5 million (DKK -117.8 million) in Q3 2018. The amount relates to investments in property, plant and equipment, goodwill and financial assets. For the first nine months of 2018, the cash flow from investments amounted to DKK -383.9 million (DKK -466.8 million).

The cash flow from financing activities totalled DKK -137.9 million (DKK -221.7 million) in Q3 2018. For the first nine months of 2018, cash flow from financeing amounted to DKK -591.3 million (DKK -617.7 million).

In Q3 2018, net change in cash flow amounted to DKK 21.8 million (DKK -6.0 million). For the first nine months of 2018, net change in cash flow amounted to DKK -3.4 million (DKK 112.4 million).

At the end of Q3 2018, Bakkafrost had unused credit facilities of DKK 1,204.9 million (DKK 932.6 million).

Farming Segment

The farming segment produces high quality Atlantic salmon from juveniles to harvest size salmon. The salmon is sold to fresh fish markets globally and to the internal VAP production. The farming sites are in the Faroe Islands.

Volumes

The total volumes harvested in Q3 2018 were 7,217 tonnes gutted weight (11,585 tgw) – a decrease in volumes of 38%. 6,254 tgw came from the North region and 963 tgw from the West region. Total harvested volumes for the first nine months of 2018 were 32,356 tonnes gutted weight (43,145 tgw). The low harvest in Q3 was mainly due to Borðoyavík A-13 being harvested in Q2 – earlier than anticipated. Harvest in Q4 is expected to be around 14,000 tgw.

3.3 million (3.2 million) smolts were transferred in Q3 2018. For the first nine months of 2018, 9.2 million (6.5 million) smolts were transferred. This is in line with the smolt transfer plan.

	Q 3	Q 3		Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	C ha ng e	2 0 1 8	2 0 1 7	C ha ng e
ina ia F l nc
To ta l re ve nu e	0 4 4 5, 7 7	6 9, 9 1 2 8	% -2 8	6, 1, 8 8 5 1 5	0 9, 2, 4 2 7 8	% -2 2
E B I T	4 1 8, 9 9 5	3 7, 8 5 7	1 0 0 7 %	1, 1 2 4, 7 9 6	6 4 5, 1 3 5	7 4 %
ion l Op t E B I T era a	1 3 9, 6 2 8	2 1 6, 6 9 1	-3 6 %	7 6 1, 2 5 9	1, 0 7 9, 3 7 3	-2 9 %
ing ion l / kg ( ) Fa Op t E B I T D K K rm era a -	1 9. 3 5	1 8. 7 0	3 %	2 3. 5 3	2 5. 0 2	-6 %
lum Vo es
d v lum ( ) Ha te tg rve s o es w	7, 2 1 7	1 1, 5 8 5	-3 8 %	3 2, 3 5 6	4 3, 1 4 5	-2 5 %
ing h Fa No t rm r -	6, 2 5 4	1, 6 5 9	2 7 7 %	2 1, 8 9 2	2 4, 3 6 4	-1 0 %
Fa ing We t rm s -	9 6 3	9, 9 2 6	-9 0 %	1 0, 6 4 4	1 8, 8 1 7	% -4 4
Sm l lea d ( ho d ) ts t o re se us an	3, 3 1 6	3, 2 0 6	3 %	9, 2 2 5	6, 5 1 9	4 2 %
ing h Fa No t rm r -	3 5 8	1, 6 4 8	-7 8 %	6 2 0	3, 0 4 3	-8 0 %
ing Fa We t rm s -	2, 9 5 8	1, 5 5 8	9 0 %	8, 6 0 5	3, 4 7 6	1 4 8 %

Financial Performance

In Q3 2018, the operating revenue for Bakkafrost's farming segment was DKK 445.1 million (DKK 619.3 million). The operating revenue for the farming segment for the first nine months of 2018 was DKK 1,886.5 million (DKK 2,409.3 million).

In Q3 2018, the farming segment's EBIT amounted to DKK 419.0 million (DKK 37.9 million). The farming segment's EBIT for the first nine months of 2018 was DKK 1,124.8 million (DKK 645.1 million).

Operational EBIT amounted to DKK 139.6 million (DKK 216.7 million) in Q3 2018, which corresponds to an operational EBIT margin of 31% (35%). For the first nine months of 2018, operational EBIT was DKK 761.3 million (DKK 1,079.4 million).

The Farming segment had expenses of DKK 7.2 million in Q3 2018 due to the mortality incident at A-81 Kolbanagjógv, which affected operational EBIT/kg negatively by DKK 1.00 (1.28 NOK) in Q3 2018.

Operational EBIT/kg for the farming segment was DKK 19.35 (NOK 24.85) in Q3 2018, compared with DKK 18.70 (NOK 23.51) in Q3 2017. Operational EBIT/kg for the first nine months of 2018 was DKK 23.53 (NOK 30.28), compared with DKK 25.02 (NOK 31.05) for the first nine months of 2017.

VAP Segment

The VAP (value added products) segment produces skinless and boneless portions of salmon. The main market for the VAP products is Europe with increasing sales in other markets. The VAP products are sold on long-term fixed price contracts.

Volumes

20% (45%) of the total harvested volumes in Q3 2018 went to production of VAP products and 17% (33%) of the harvested volumes in the first nine months of 2018 went to production of VAP products.

The VAP production in Q3 2018 was 1,425 tonnes gutted weight (5,209 tgw). The decrease in production in Q3 2018 was 73%, compared to Q3 2017. The harvest volumes were lower and the contract coverage is also reduced in Q3 2018, compared to Q3 2017. For the first nine months of 2018, the VAP production was 5,510 tgw (14,118 tgw).

Financial Performance

The operating revenue for the VAP segment amounted to DKK 69.2 million (DKK 246.2 million) in Q3 2018. The decrease in revenue is due to lower volumes in Q3 2018, compared with Q3 2017. In the first nine months of 2018, the VAP revenue was DKK 255.8 million (DKK 710.4 million).

The VAP segment had an EBIT amounting to DKK -8.2 million (DKK 7.7 million) in Q3 2018. Changes in onerous contracts were DKK -11.0 million (DKK 12.2 million). In the first nine months of 2018, the VAP segment's EBIT amounted to DKK -42.8 million (DKK -44.6 million).

	Q 3	Q 3		Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	ha C ng e	2 0 1 8	2 0 1 7	ha C ng e
ina ia F l nc
To ta l re ve nu e	6 9, 2 2 5	2 4 6, 2 3 0	-7 2 %	2 5 5, 8 3 7	7 1 0, 3 5 5	-6 4 %
E B I T	-8, 2 0 2	6 8 7, 7	-2 0 % 7	2, 8 2 -4 5	6 0 -4 4, 1	% 4
ion l Op t E B I T era a	2, 7 6 0	-4, 4 7 0	1 6 2 %	-2 5, 7 5 4	-1 1 1, 9 8 8	7 7 %
ion l / kg ( ) V A P - Op t E B I T D K K era a	1. 9 4	-0. 8 6	3 2 6 %	-4. 6 7	-7. 9 3	4 1 %
lum Vo es
du d v lum ( ) V A P p tg ro ce o es w	1, 4 2 5	5, 2 0 9	-7 3 %	5, 5 1 0	1 4, 1 1 8	-6 1 %
d v lum d in du ion Ha te V A P p t rve s o es us e ro c	2 0 %	4 5 %	-5 6 %	1 7 %	3 3 %	-4 8 %
fre fro Ha te d v lum l d h / rve s o es so s ze n	8 0 %	5 5 %	4 6 %	8 3 %	6 7 %	2 3 %

Operational EBIT amounted to DKK 2.8 million (DKK -4.5 million) in Q3 2018, corresponding to an operational EBIT of DKK 1.94 (NOK 2.49) per kg gutted weight in Q3 2018, compared with DKK -0.86 (NOK -1.08) per kg gutted weight in Q3 2017.

The decrease in the salmon spot prices in Q3 2018, compared to the previous quarter, had a positive effect on the VAP segment's margin as the VAP segment buys the raw material at spot prices.

For the first nine months of 2018, operational EBIT amounted to DKK -25.8 million (DKK -112.0 million), corresponding to an operational EBIT of DKK -4.67 (NOK -6.01) per kg, compared with an operational EBIT of DKK -7.93 (NOK -9.84) in the first nine months of 2017.

FOF Segment

The FOF (fishmeal, oil and feed) segment produces fishmeal, fish oil and fish feed. Most of the production is used for fish feed, used internally in the farming segment. The quality of the fish feed is important to the quality of the salmon from Bakkafrost. Fishmeal, fish oil and fish feed are also sold externally.

Volumes

Havsbrún received 7,496 tonnes (21.937 tonnes) of raw material to produce fishmeal and fish oil in Q3 2018. The raw material intake depends on the fishery in the North Atlantic and available species of fish. In the first nine months of 2018, Havsbrún received 255,987 tonnes (291,604 tonnes) of raw material.

The production of fishmeal in Q3 2018 was 2,634 tonnes (5,615 tonnes). In the first nine months of 2018, Havsbrún produced 54,340 tonnes (62,332 tonnes) of fishmeal.

The production of fish oil in Q3 2018 was 1,201 tonnes (1,789 tonnes). The production of fish oil varies, depending on the species of fish sourced for production and the timing of catch. For the first nine months of 2018, Havsbrún produced 6,370 tonnes (6,291 tonnes) of fish oil.

Sales of feed amounted to 23,468 tonnes (22,320 tonnes) in Q3 2018, of which the farming segment internally used 20,783 tonnes (20,398 tonnes) or 89% (91%). For the first nine months of 2018, Havsbrún sold 53,064 tonnes (59,179 tonnes) of feed.

Financial Performance

The operating revenue for the FOF segment amounted to DKK 354.2 million (DKK 342.1 million) in Q3 2018, of which DKK 197.5 million (DKK 184.7 million) represented sales to Bakkafrost's farming segment, corresponding to 56% (54%). For the first nine months of 2018, the revenue amounted to DKK 980.9 million (DKK 936.3 million) of which DKK 468.4 million (DKK 519.7 million) represented sales to Bakkafrost's farming segment, corresponding to 48% (56%).

	Q 3	Q 3		Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	C ha ng e	2 0 1 8	2 0 1 7	C ha ng e
ina ia l F nc
l re To ta ve nu e	3 5 4, 2 2 5	3 4 2, 1 3 0	4 %	9 8 0, 8 7 5	9 3 6, 3 0 4	5 %
E B I T	3 1, 4 6 0	7 1, 2 7 0	-5 6 %	1 7 0, 1 3 7	1 4 7, 8 6 9	1 5 %
E B I T D A	4 1, 3 9 4	7 9, 4 9 3	-4 8 %	1 9 3, 8 7 4	1 7 2, 4 6 7	1 2 %
O in F F - E B I T D A ma rg	1 1. % 7	2 3. 2 %	0 % -5	1 9. 8 %	1 8. % 4	% 7
lum ( ) Vo to es nn es
l d fee d So	2 3, 4 6 8	2 2, 3 2 0	5 %	5 3, 0 6 4	5 9, 1 7 9	-1 0 %
Fe d in ter l sa le e na -	2 0, 7 8 3	2 0, 3 9 8	2 %	4 8, 5 9 1	5 5, 3 6 3	-1 2 %
d e l s le Fe ter e x na a -	2, 6 8 5	1, 9 2 2	4 0 %	4, 4 7 3	3, 8 1 6	1 7 %
is hm l e l sa le F ter ea na x	1 1, 6 4 8	1 4, 5 4 7	-2 0 %	3 9, 4 5 3	4 0, 0 5 1	-1 %
is h o i l e l sa le F ter x na	1, 2 1 1	1 0	-	3, 2 1 9	1 0	-
Re ive d r ter ia l ce aw m a	7, 4 9 6	2 1, 9 3 7	-6 6 %	2 5 5, 9 8 7	2 9 1, 6 0 4	-1 2 %

Total revenue for the FOF segment in Q3 2018 increased 4%, compared to the same quarter last year. The internal revenue has increased, and external sales have decreased. The decrease in external revenue is due to lower volumes of fishmeal sold in Q3 2018, compared to Q3 2017.

EBITDA was DKK 41.4 million (DKK 79.5 million) in Q3 2018, and the EBITDA margin was 11.7% (23.2%). Havsbrún sources raw pelagic fish for the fishmeal and fish oil production, which are part of the recipe to produce salmon feed. For the first nine months of 2018, the EBITDA was DKK 193.9 million (DKK 172.5 million), corresponding to an EBITDA margin of 19.8% (18.4%).

OutlookMarket

The latest estimate from Kontali Analyse of global supply of Atlantic salmon in Q3 2018 is an increase of around 5%, compared to Q3 2017. The global harvest of Atlantic salmon in Q4 2018 is expected to increase 1.4%, compared to Q4 2017. The estimated global supply of Atlantic salmon for 2018 is an increase of around 7%, compared to 2017.

The supply of Atlantic salmon will be tight in 2019, as global supply in 2019 is estimated to increase around 4%, compared to estimated supply in 2018.

Bakkafrost operates in the main salmon markets, Europe, USA, the Far East and Russia. Variation in sales distribution between the different markets is driven by the change in demand from quarter to quarter in the different regions. Bakkafrost, however, aims to have a balanced market diversification to reduce market risk.

Farming

The outlook for the farming segment is good. The estimates for harvest volumes and smolt releases are dependent on the biological development.

Bakkafrost focuses on reducing biological risk continuously and has made several new investments and procedures to diminish this risk. Bakkafrost focuses on using non-medical methods in treatments against sea lice and has invested in new technology to follow this strategy.

Bakkafrost's guidance for harvest in 2018 is reduced by 3,000 tonnes gutted weight, from 49,000 to 46,000 tonnes gutted weight. In 2019, Bakkafrost expects to harvest 53,000 tonnes gutted weight.

As Bakkafrost has postponed 1 million smolts from expected smolt release in Q4 2018 to Q1 2019, Bakkafrost expects to release 12.9 million smolts in 2018, compared to 9.9 million smolts in 2017 and 11.7 million smolts released in 2016. In 2019, Bakkafrost expect to release 13.5 million smolts. The number of smolts released is a key element of predicting Bakkafrost's future production.

VAP (Value added products)

Bakkafrost has signed contracts covering around 12% of the expected harvested volumes for the rest of 2018. Bakkafrost is presently negotiating new contracts for 2019. Bakkafrost's long-term strategy is to sell around 40-50% of the harvested volumes of salmon as VAP products at fixed price contracts.

The VAP contracts are at fixed prices, based on the salmon forward prices at the time they are agreed and the expectations for the salmon spot price for the contract period. The contracts last for 6 to 12 months.

FOF (Fishmeal, oil and feed)

The outlook for the production of fishmeal and fish oil is dependent on the availability of raw material. The ICES 2018 recommendation for blue whiting is 1,388 thousand tonnes, compared with 1,342 thousand tonnes in 2017.

The ICES recommendation for blue whiting in 2019 is 1,143 thousand tonnes, which corresponds to a decrease of 18%, compared to ICES's recommendation for 2018.

The production of fishmeal and fish oil in 2018 will not reach the same level as in 2017. Bakkafrost expects a decrease in production volumes of fishmeal and fish oil in 2019, compared to 2018.

The major market for Havsbrún´s fish feed is the local Faroese market including Bakkafrost's internal use of fish feed.

Havsbrún's sales of fish feed in 2018 are expected to be at 80,000 tonnes, depending on external sales. Sales of fish feed in 2019 are expected to be around 85,000 tonnes.

The new salmon meal and salmon oil plant started operation in Q3 2018 and production is still at an early stage. This operation will increase the value of offcuts from salmon harvested and processed in the harvest/VAP factory at Glyvrar.

Investments

Bakkafrost's investment program for the period from 2018 to 2022 will amount to DKK 3 billion, including maintenance capex, and will reinforce Bakkafrost's integrated business model. The aim of the investment program is to minimize the biological risk, increase efficiency and create sustainable organic growth.

Bakkafrost's strategy and investment program will be presented at Bakkafrost's Capital Markets Day on 12 June 2019 in the Faroe Islands.

Financial

Favourable market balances in the world market for salmon products and cost-conscious production will likely maintain the financial flexibility going forward.

A high equity ratio together with Bakkafrost's bank financing, which was renewed for five years in Q1 2018, makes Bakkafrost's financial situation strong. This enables Bakkafrost to carry out its investment plans to further focus on strengthening the Group, M&A's, organic growth opportunities and to fulfil its dividend policy in the future, which is unchanged although a new investment program is announced.

Risks

Biological risk has been and will be a substantial risk for Bakkafrost. The Annual Report 2017 gives more explanation on the biological risk and Bakkafrost's risk management in this regard.

Reference is made to the Outlook section of this report for other comments to Bakkafrost's risk exposure and to Note 3.

Bakkafrost is, as explained in the Annual Report 2017, exposed to the salmon price. Global supply of salmon will increase in 2018 and will influence the salmon price.

The Annual Report 2017 is available on request from Bakkafrost and on Bakkafrost's website, www.bakkafrost.com.

Events after the Date of the Statement of Financial Position

From the date of the statement of financial position until today, no events have occurred which materially influence the information provided by this report.

Statement by the Management and the Board of Directors on the Interim Report

The Management and the Board of Directors have today considered and approved the interim report of P/F Bakkafrost for the period 1 January 2018 to 30 September 2018.

The interim report, which has not been audited or reviewed by the company's independent auditors, has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and Faroese disclosure requirements for listed companies.

Glyvrar, November 5th, 2018

Management:

Regin Jacobsen CEO

The Board of Directors of P/F Bakkafrost:

Rúni M. Hansen Johannes Jensen Teitur Samuelsen Chairman of the Board Deputy Chairman of the Board Board Member

Board Member Board Member

Øystein Sandvik Annika Frederiksberg

In our opinion, the accounting policies used are appropriate, and the interim report gives a true and fair view of the Group's financial positions at 30 September 2018, as well as the results of the Group activities and cash flows for the period 1 January 2018 to 30 September 2018.

In our opinion, the management's review provides a true and fair presentation of the development in the Group operations and financial circumstances of the

results for the period and of the overall financial position of the Group as well as a description of the most significant risks and elements of uncertainty facing the Group.

Over and above the disclosures in the interim report, no changes in the Group's most significant risks and uncertainties have occurred relative to the disclosures in the annual report for 2017.

Consolidated Income Statement

For the period ended 30 September 2018

Consolidated Statement of Comprehensive Income

For the period ended 30 September 2018

	Q 3	Q 3	YT D	YT D		Q 3	Q 3	YT D	YT D
DK K 1 00 0 ,	20 18	20 17	20 18	20 17	00 0 DK K 1 ,	20 18	20 17	20 18	20 17
tin	62 60 2	80 0	42 07 4	86 97
Op era g r ev en ue	1,	4, 15	2, 7,	2, 3, 9	fit for eri Pro th od e p	35 5, 85 5	56 21 5 ,	96 6, 91 2	53 3, 31 1
Pu rch of od ase go s	-17 7, 39 0	-15 9, 16 6	-72 0, 85 9	-67 3, 84 1	Fai alu dju of fin ial de riv ati stm ent r v e a anc ve s	24 8	6, 83 0	-15 79 7	-10 88 9
Ch e i n i d b iolo ica l as s (a ) ent set t c ost ang nv ory an g	7, 11 8	-72 88 5	45 28 1	-12 8, 13 4	Inc e t eff ect om ax	-38	-1, 04 2	, 5, 87 6	, 1, 66 1
Sal d p l ex ary an ers on ne pen ses	-71 94 0 ,	, -85 36 1 ,	, -25 0, 23 8	-29 3, 52 3	Res e t har e-b d p nt erv o s ase ay me	39 5	19 5	1, 14 0	41 5
Oth tin er op era g e xp en ses	8, 00 8 -15	-18 4, 75 5	-50 9, 40 4	-58 81 6 4,	nsl ati dif fer Cu tra rre ncy on enc es	-54	31 9	-53	73 2
De cia tio n pre	-53 09 4 ,	-50 18 7 ,	-14 7, 45 1	-13 7, 25 8	Ad jus of sha tm ent tre asu ry res	-29 9	19 1	84 1	4, 24 9
tio Op l EB IT * era na	16 8, 28 8	25 1, 79 6	84 4, 40 3	1, 04 6, 40 7	the reh siv e in o b Ne t o e t r co mp en com e
					sif ied ofi in s las to t o r lo ub nt rec pr ss seq ue
Fai alu dju f b iolo ica l as stm ent set r v e a s o g s	29 3, 45 9	-15 5, 12 2	43 5, 36 7	-33 4, 84 6	rio ds pe	25 2	6, 49 3	-7, 99 3	-3, 83 2
On tra cts ero us con	-10 96 8 ,	12 15 7 ,	-17 07 7 ,	67 37 6 ,
Inc e f iat om rom as soc es	-2, 45 9	-1, 03 7	-1, 73 5	-1, 09 7	the reh siv e in be Ne t o ot to r co mp en com e n
Rev tax en ue	-14 09 2 ,	-23 71 2 ,	-71 83 0 ,	-99 39 2 ,	las sif ied to ofi t o r lo in s ub nt rec pr ss seq ue
nin bef in d t ( IT) Ear ter est EB gs ore an ax es	43 4, 22 8	84 08 2 ,	1, 18 9, 128	67 8, 44 8	rio ds pe	0	0	0	0
Ne t in ter est re ve nue	46 7	45 6	2, 08 9	1, 01 0	Oth he nsi in er com pre ve com e	25 2	6, 49 3	99 3 -7,	-3, 83 2
Ne t in ter est ex pe nse s	-2, 27 1	-6, 81 4	-10 21 5 ,	-20 36 1 ,
eff Ne t c ect urr en cy s	1, 93 8	-8, 72 8	1, 12 6	-4, 61 0	siv e in e f To tal ot he reh the r co mp en com or
Oth fin ial er anc ex pe nse s	-79 9	-1, 03 5	-3, 24 1	-3, 36 2	rio d pe	35 6, 10 7	62 70 8 ,	95 8, 91 9	52 9, 47 9
nin bef s ( T) Ear ta EB gs ore xe	43 3, 56 3	67 96 1 ,	8, 88 1, 17 7	65 12 1, 5
					Co reh siv e in e f the rio d mp en com or pe
Tax es	-77 70 8 ,	-11 74 6 ,	-21 1, 97 5	-11 7, 81 4	rib att uta ble to
fit los s fo r th eri od Pro or e p	35 5, 85 5	56 21 5 ,	96 6, 91 2	53 3, 31 1	llin int No tro sts n- con g ere	0	0	0	0
					f P / akk afr Ow F B ost ner s o	35 6, 10 7	62 70 8 ,	95 8, 91 9	52 9, 47 9
Pro fit los s fo r th at tri bu tab le t or e y ear o
llin int No tro sts n-c on g ere	0	0	0	0
f P / ak kaf Ow F B t ne rs o ros	35 5, 85 5	56 21 5 ,	96 6, 91 2	53 3, 31 1
nin sh ( K) Ear DK gs per are	7.3 2	6 1.1	19 .88	10 .97
Dil ute d e ing sha ( DK K) arn s p er re	7.3 2	1.1 6	19 .88	10 .97

* Operational EBIT is EBIT before fair value of biomass, onerous contracts, income from associates and revenue tax.

Consolidated Statement of Financial Position

As at 30 September 2018

	30 Se t p	31 De c
DK K 1 00 0 ,	20 18	20 17
AS SET S
No t a ts n-c urr en sse
ible Int set ang as s	38 8, 93 4	37 6, 67 5
Pro rty lan t a nd uip nt pe , p eq me	2, 78 8, 75 3	2, 57 0, 43 0
Fin ial ets anc ass	10 1, 86 4	76 70 2 ,
eiv ab les Lon ter g- m rec	9, 20 0	0
tal To t a ts no n-c urr en sse	3, 28 8, 75 1	3, 02 3, 80 7
Cu nt ets rre ass
Bio log ica l as s ( bio ss) set ma	1, 56 2, 94 0	1, 09 6, 66 4
Inv ent ory	33 0, 85 1	30 5, 84 5
tal in To nto ve ry	1, 89 3, 79 1	1, 40 2, 50 9
cei ble
Ac nts cou re va Oth eiv ab les	24 7, 65 7 54 36 5	26 2, 49 3 15 15 6
er rec tal cei ble To	, 30 02 2	7, 41 64 9
re va s	2,	9,
Cas h a nd sh uiv ale nts ca eq	30 6, 16 7	30 9, 55 1
tal To nt ets cu rre ass	2, 50 1, 98 0	2, 13 1, 70 9
TO TA L A SSE TS	5, 79 0, 73 1	5, 15 5, 51 6

DK K 1 00 0 ,	30 Se t p 20 18	31 De c 20 17
EQ UIT Y A ND LIA BIL ITI ES
Eq uit y
ita Sha l re cap	48 85 8 ,	48 85 8 ,
Oth uit er eq y	4, 03 3, 11 6	3, 57 7, 57 1
tal uit To eq y	4, 08 1, 97 4	3, 62 6, 42 9
No t li ab ilit ies n-c urr en
fer red d o the De r ta an xes	69 0, 62 9	45 5, 44 8
int bea rin de bt Lon ter st- g- m ere g	59 1, 95 6	14 6, 69 6
Fin ial de riv ati anc ve s	0	0
To tal t li ab ilit ies no n-c urr en	1, 28 2, 58 5	60 2, 144
liab ilit ies Cu nt rre
Fin ial de riv ati anc ve s	63 0	12 7, 25 5
Sho in -be ari de bt rt-t ter est erm ng	0	30 0 37 8,
Ac nts ble d o the r d ebt cou pa ya an	42 5, 54 2	42 1, 38 8
liab ilit ies To tal nt cu rre	42 6, 17 2	92 6, 94 3
tal lia bil itie To s	1, 70 8, 75 7	1, 52 9, 08 7
TO TA L E Q UIT Y A ND LIA BIL ITI ES	5, 79 0, 73 1	5, 15 5, 51 6

Consolidated Cash Flow Statement

For the period ended 30 September 2018

	Q 3	Q 3	YT D	YT D
DK K 1 00 0 ,	20 18	20 17	20 18	20 17
nin bef in Ear ter est d t ( EB IT) gs ore an ax es	43 4, 22 8	84 08 2 ,	1, 18 9, 128	67 8, 44 8
Ad jus s fo rite -do nd de cia tio tm ent r w wn s a pre n	53 09 4	50 18 7	12 6, 45 1	13 25 8 7,
Ad jus s fo alu dju of bi tm ent stm ent r v e a om ass	, -29 3, 45 9	, 15 5, 12 2	-43 5, 36 7	33 4, 84 6
Ad jus s fo r in e f iat tm ent com rom as soc es	2, 45 9	1, 03 7	1, 73 5	1, 09 7
Ad jus tm ent s fo eff ect r c urr en cy s	2, 41 7	-8, 22 7	9, 94 0	1, 93 9
Ad jus s fo isio n f tm ent tra cts r p rov or on ero us con	10 96 7 ,	-12 15 7 ,	17 07 6 ,	-67 37 6 ,
Ch in inv ent an ge ory	-14 18 5 ,	78 67 2 ,	-55 91 5 ,	10 9, 34 5
Ch in eiv ab les an ge rec	11 9, 47 2	55 13 9 ,	10 3, 78 4	52 30 8 ,
Ch e i ent de bts ang n c urr	9, 22 3	-70 25 2 ,	15 02 6 ,	-50 96 1 ,
Cas h f low fro ion rat m o pe s	32 4, 21 6	33 3, 60 3	97 1, 85 8	1, 19 6, 90 4
h f fro inv Cas low est nts m me
Ac isit ion od wi ll qu go	-12 25 9 ,	0	-12 25 9 ,	0
ds fro ale of fix ed Pro ets cee m s ass	0	0	25 00 0 ,	0
fo has f fi xed Pay nts set me r p urc e o as s	-12 7, 21 4	-11 7, 83 7	-36 9, 77 4	-46 6, 77 8
t in in fin ial Ne stm ent ets ve anc ass	-25 01 3 ,	0	-26 89 6 ,	0
Cas h f low fro inv est nts m me	-16 4, 48 6	-11 7, 83 7	-38 3, 92 9	-46 6, 77 8
h f low fro m f ina nci Cas ng
Ch of int bea rin de bt (s ho nd lon ) st- rt a an ge ere g g	-13 5, 43 6	-21 4, 51 7	-71 72 7 ,	-17 4, 89 8
Fin ial inc anc om e	46 7	45 5	2, 08 9	1, 00 9
Fin ial anc ex pen ses	-3, 06 8	-7, 84 9	-13 45 4 ,	-23 72 3 ,
eed s f le o f o sh Ne t p roc rom sa wn are s	14 5	19 0	2, 45 7	2, 67 9
Div ide id nd pa	0	0	-51 0, 67 8	-42 2, 79 5
Cas h f low fro m f ina nci ng	-13 7, 89 2	-22 1, 72 1	-59 1, 31 3	-61 7, 72 8
ha in sh d c ash uiv ale in rio d Ne t c nts nge ca an eq pe	21 83 8	-5, 95 5	-3, 38 4	11 2, 39 8
	,
Cas h a nd h e iva len ts ing ba lan cas pen qu – o ce	28 4, 32 9	35 3, 34 9	30 9, 55 1	23 4, 99 6
h a nd sh uiv ale los ing ba lan al Cas nts tot ca eq – c ce	30 6, 16 7	34 7, 39 4	30 6, 16 7	34 7, 39 4

Consolidated Statement of Changes in Equity

As at 30 September 2018

								Biom ass
		Sha re		Sha re-	Cur renc y			Fair val ue
DKK 00	Sha re ital	miu Pre m Res	Trea sury Sha	base d t	slat ion tran diff	Der ivat ives	ed Pro pos Div iden d	adju st- ts	ined Reta Earn	l Tota
1,0 ity 0 Equ 1.01 .201 8	Cap 48,8 58	erv e 306 ,537	res -18, 159	Pay men 3,87 4	eren ces 6,27 1	-104 ,351	513 ,009	men 186 ,951	ings 2,68 3,43 9	Equ ity 3,62 6,42 9
soli date d pr ofit Con	0	0	0	0	0	0	0	435 ,367	538 ,850	974 ,217
nsiv e in Oth rehe er c omp com e:
Fair val djus f fin ial d eriv ativ tme nt o ue a anc es	0	0	0	0	0	,797 -15	0	0	0	,797 -15
Inco tax effe ct me	0	0	0	0	0	5,87 6	0	0	0	5,87 6
Sha re-b ased t pay men	0	0	0	1,14 0	0	0	0	0	0	1,14 0
Curr tra nsla tion diff ency eren ces	0	0	0	0	-53	0	0	0	0	-53
nsiv e in Tota l oth rehe er c omp com e	0	0	0	1,14 0	-53	-9,9 21	0	0	0	-8,8 34
l com hen sive inc Tota pre ome	0	0	0	1,14 0	-53	-9,9 21	0	435 ,367	538 ,850	965 ,383
ion with Tran sact ow ners :
Trea sha res	0	0	841	0	0	0	0	0	0	841
sury Paid div iden d -out	0	0	0	0	0	0	-51 3,00 9	0	2,33 1	-51 0,67 8
Tota l tra tion wit h ow nsac ners	0	0	841	0	0	0	3,00 9 -51	0	2,33 1	-509 ,837
l cha s in ity Tota	0	0	841	1,14 0	-53	-9,9 21	-51 3,00 9	435 ,367	541 ,181	455 ,546
nge equ
uity Tota l eq 30. 09.2 018	48,8 58	306 ,537	-17, 319	5,01 4	6,21 8	-114 ,272	0	622 ,318	3,22 4,62 0	4,08 1,97 4
ity 0 Equ 1.01 .201 7	48,8 58	306 ,537	-21, 045	2,65 1	5,85 6	-83, 196	425 ,065	880 ,491	1,98 3,81 8	3,54 9,03 5
soli ofit Con date d pr	0	0	0	0	0	0	0	-69 3,54 0	1,21 0,35 9	516 ,819
Oth rehe nsiv e in er c omp com e:
Fair val djus f fin ial d eriv ativ tme nt o ue a anc es	0	0	0	0	0	-25 ,799	0	0	0	-25 ,799
Inco tax effe ct me	0	0	0	0	0	4,64 4	0	0	0	4,64 4
Sha re-b ased t pay men	0	0	0	1,22 3	0	0	0	0	0	1,22 3
Curr tra nsla tion diff ency eren ces	0	0	0	0	415	0	0	0	0	415
nsiv e in Tota l oth rehe er c omp com e	0	0	0	1,22 3	415	-21, 155	0	0	0	-19, 517
Tota l com hen sive inc pre ome	0	0	0	1,22 3	415	-21, 155	0	-69 3,54 0	1,21 0,35 9	497 ,302
ion with Tran sact ow ners :
Trea sha sury res	0	0	2,88 6	0	0	0	0	0	0	2,88 6
Paid div iden -out d	0	0	0	0	0	0	-42 5,06 5	0	2,27 1	-42 2,79 4
ed d ivid end Pro pos	0	0	0	0	0	0	513 ,009	0	3,00 9 -51	0
Tota l tra tion wit h ow nsac ners	0	0	2,88 6	0	0	0	87,9 44	0	-510 ,738	-419 ,908
Tota l cha s in ity nge equ	0	0	2,88 6	1,22 3	415	-21, 155	87,9 44	-69 3,54 0	699 ,621	77,3 94
Tota l eq uity 31. 12.2 017	48,8 58	306 ,537	-18, 159	3,87 4	6,27 1	-104 ,351	513 ,009	186 ,951	2,68 3,43 9	3,62 6,42 9
Equ ity 0 1.01 .201 7	48,8 58	306 ,537	-21, 045	2,65 1	5,85 6	-83, 196	425 ,065	880 ,491	1,98 3,81 8	3,54 9,03 5
Con soli date d pr ofit	0	0	0	0	0	0	0	-334 ,846	874 ,279	539 ,433
Oth rehe nsiv e in er c omp com e:
Fair val djus tme nt o f fin ial d eriv ativ ue a anc es	0	0	0	0	0	-10 ,889	0	0	0	-10 ,889
effe Inco tax ct me	0	0	0	0	0	1,66 1	0	0	0	1,66 1
Sha re-b ased t pay men	0	0	0	415	0	0	0	0	0	415
tion diff Curr tra nsla ency eren ces	0	0	0	0	732	0	0	0	0	732
l oth rehe nsiv e in Tota er c omp com e	0	0	0	415	732	-9,2 28	0	0	0	-8,0 81
Tota l com hen sive inc pre ome	0	0	0	415	732	-9,2 28	0	-334 ,846	874 ,279	531 ,352
Tran sact ion with ow ners :
sha Trea sury res	0	0	4,24 9	0	0	0	0	0	0	4,24 9
Paid div iden d -out	0	0	0	0	0	0	-42 5,06 5	0	2,27 1	-42 2,79 4
Tota l tra tion wit h ow nsac ners	0	0	4,24 9	0	0	0	-42 5,06 5	0	2,27 1	-418 ,545
Tota l cha s in ity nge equ	0	0	4,24 9	415	732	-9,2 28	-42 5,06 5	-334 ,846	876 ,550	112 ,807
Tota l eq uity 30. 09.2 017	48,8 58	306 ,537	-16, 796	3,06 6	6,58 8	-92, 424	0	,645 545	2,86 0,36 8	3,66 1,84 2

Notes to the Account

Accounting Policy

General Information

P/F Bakkafrost is a limited company incorporated and domiciled in the Faroe Islands.

The Group's Annual Report as at 31December 2017 is available upon request from the company's registered office at Bakkavegur 8, FO-625 Glyvrar, Faroe Islands, or at www.bakkafrost.com.

This Condensed Consolidated Interim Report is presented in DKK.

Note 1. Statement of Compliance

This Condensed Consolidated Interim Report has been prepared in accordance with International Financial Reporting Standards (IFRS) IAS 34 Interim Financial Reporting as adopted by the EU. It does not include all the information required for the full Annual and Consolidated Report and Accounts and should be read in conjunction with the Annual and Consolidated Report and Accounts for the Group as at 31 December 2017.

This interim report has not been subject to any external audit.

Note 2. Significant Accounting Policies

The accounting policies applied by the Group in this Condensed Consolidated Interim Report are the same as those applied in the Annual Report as at and for the year ended 31 December 2017.

Note 3. Estimates and Risk Exposures

The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting principles and recognized amounts of assets, liabilities, income and expenses. The most significant estimates relate to the valuation of biological assets, which are measured at fair value. Estimates and underlying assumptions are reviewed on an ongoing basis and are based on the management's best assessment at the time of reporting. All changes in estimates are reflected in the financial statements as they occur.

The accounting estimates are described in the notes to the financial statements in the Annual Report 2017. For other risk exposures, reference is made to the Management's Statement in the Annual Report for 2017, where Bakkafrost's operational and financial risks are described, as well as to Note 4.1 (Financial risk management) in the same report.

The risks and uncertainties described therein are expected to remain.

Note 4. Biomass

	Se 3 0 t p	Se 3 0 t p	3 1 De c		Se 3 0 t p	Se 3 0 t p	3 1 De c
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	2 0 1 7		2 0 1 8	2 0 1 7	2 0 1 7
io log ica l a ing B ts t 0 1. 0 1. sse ca rry am ou n	1, 0 9 6, 6 6 4	1, 8 5 8, 4 3 5	1, 8 5 8, 4 3 5	is Nu be f f h o ( t ho d ) m r o n a ve rag e us an
du du ion ha Inc to t rea se e p ro c or pu rc se s	8 9 9, 0 2 2	1, 0 3 0, 4 4 2	1, 3 6 8, 6 0 8	be f f is h < kg Nu 1 m r o	4, 1 1 7	4, 1 1 1	4, 3 9 0
Re du t ion du to ha t ing le (co ts f g ds c e rv es or sa s o oo				be f f is h kg kg Nu 1 2 m r o <	3, 1 9 7	2, 5 2 4	2, 4 5 6
l d ) so du ion du l i (co f inc i de Re t to ta ty ts ts c e mo r s o n	-8 6 5, 5 2 0	-1, 1 5 4, 8 9 7	-1, 4 7 5, 5 7 1	be f f is h kg kg Nu 2 3 m r o <	2, 1 3 0	1, 4 7 6	1, 8 1 3
ba d m ta l i ty ) se or	-1 7, 0 1 7	-1 5, 7 9 4	0	be f f is h kg kg Nu 3 4 m r o <	1, 4 9 0	1, 9 3 0	1, 6 6 5
ir v lue d j he be inn ing f he Fa tm t a t t t a a g us en o io d r d p er ev ers e	-1 8 6, 9 5 6	-8 8 0, 4 9 2	-8 8 0, 4 9 2	be f f is h kg Nu 4 m r o <	3, 6 3 1	3, 9 4 7	4, 1 0 5
ir v lue d j he d o f he io d Fa tm t a t t t a a us en en p er	6 2 2, 3 2 3	5 4 5, 6 4 6	1 8 6, 9 5 6	l n be f f is h a To ta t s um r o ea	1 4, 5 6 5	1 3, 9 8 8	1 4, 4 2 9
Re l o f e l im ina t ion t t he be inn ing f t he ve rsa a g o io d p er	5 9, 7 5 8	9 8, 4 8 7	9 8, 4 8 7	f s Nu be l ts lea d ( t ho d ) m r o mo re se us an
l im ina ion E t s	-4 5, 3 3 4	-6 4, 8 3 7	-5 9, 7 5 8	be f s l lea d – ing h Nu ts Fa No t m r o mo re se rm r	6 2 0	3, 0 4 2	6, 3 7 0
io ica ing B log l a ts t sse ca rry am ou n				be f s l lea d – ing Nu ts Fa We t m r o mo re se rm s	8, 6 0 5	3, 4 7 5	3, 5 5 8
he d o f he io d t t t a en p er	1, 5 6 2, 9 4 0	1, 4 1 6, 9 9 0	1, 0 9 6, 6 6 4	l n be f s l lea d To ta ts um r o mo re se	9, 2 2 5	6, 5 1 7	9, 9 2 8
ice b io log ica l a Co t p ts s r sse	9 8 3, 0 5 6	9 2 9, 0 4 1	9 6 2, 7 8 2	Se i t iv i ty in D K K 1, 0 0 0 ns
i l ize d in Ca ta ter t p es	2, 8 9 5	7, 1 3 9	6, 6 8 4	C ha in d isc % t r te +1 ng e ou n a	8 0 5, 5 4	8, 8 9 7 4	3, 9 6 7 1
ir v lue d j he d o f he io d Fa tm t a t t t a a us en en p er	6 2 2, 3 2 3	5 4 5, 6 4 6	1 8 6, 9 5 6	C ha in d isc % t r te -1 ng e ou n a	-9 3, 3 7 5	-8 2 2 7, 1	-8 3, 0 3 8
l im ina ion E t s	-4 5, 3 3 4	-6 4, 8 3 7	-5 9, 7 5 8	C ha in les ice 5 D K K ng e sa p r +	-2 3, 0 2 8 4	-2 8 3 1 7, 5	-2 2, 8 6 9 1
io log ica l a ing B ts t sse ca rry am ou n	1, 5 6 2, 9 4 0	1, 4 1 6, 9 9 0	1, 0 9 6, 6 6 4	ha in les ice C 5 D K K e sa r	2 4 3, 0 2 8	2 1 7, 5 8 3	2 1 2, 8 6 9
				ng p - ha in b iom lum C 1 % e as s v o e +	-8, 4 5 7	-6, 5 2 9	-4, 2 1 7
B iom ( to ) as s o n a ve rag e nn es				ng ha in b iom lum C 1 %	4 5 7	5 2 9	2 1 7
B iom 1 kg as s <	1, 9 1 4	2, 1 3 4	1, 5 7 7	ng e as s v o e -	8,	6,	4,
B iom 1 kg 2 kg as s <	4, 8 1 7	3, 8 9 2	3, 6 0 5	On fo d p ice in C Os lo * E U R F A e y ea r rw ar r s
iom 2 kg 3 kg B as s <	3 2 5, 1	3, 2 7 7	6 2 4, 5	io d e d Pe r n	6. 3 2	6 5. 1	0 5. 3
iom 3 kg kg B 4 as s <	2 0 9 5,	6, 2 5 7	8 0 5, 1	Q ( fo d ) 1 rw ar	6. 9 5	6. 4 4	5. 4 8
iom kg B 4 as s <	9, 8 0 1 5	2 3 1, 4 5	2 1, 5 4 4	Q ( fo d ) 2 rw ar	6. 9 1	6. 6 7	5. 4 2
lum f b iom Vo t s e o as s a ea	3 7, 0 6 6	3 7, 6 7 0	3 7, 2 9 6	( fo d ) 3 Q rw ar	6. 9 6	6. 6 6	5. 4 1
				( fo d ) 4 Q rw ar	6. 3 1	6. 0 6	5. 5 8

Note 5. Segments

i F t a r m n g s e g m e n	Q 3	Q 3	Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	2 0 1 8	2 0 1 7
Ex ter l re na ve nu e	3 9 5, 6 9 1	4 0 5, 6 8 7	1, 6 5 8, 8 0 5	1, 7 3 6, 9 9 9
In ter l re na ve nu e	4 9, 3 8 6	2 1 3, 6 0 2	2 2 7, 7 1 0	6 7 2, 2 7 9
To ta l re ve nu e	4 4 5, 0 7 7	6 1 9, 2 8 9	1, 8 8 6, 5 1 5	2, 4 0 9, 2 7 8
Op t ing era ex p en se s	-2 6 4, 5 9 3	-3 6 3, 8 7 0	-1, 0 1 3, 0 0 4	-1, 2 2 8, 2 8 4
De ia t ion d a t iza t ion p rec an mo r	-4 0, 8 5 6	-3 8, 7 2 8	-1 1 2, 2 5 2	-1 0 1, 6 2 1
Op t ion l E B I T era a	3 9, 6 2 8 1	2 6, 6 9 1 1	6 2 9 7 1, 5	0 9, 3 3 1, 7 7
ir v lue d j f b io log ica l a Fa tm ts ts a a us en o sse	2 9 3, 9 4 5	2 2 -1 5 5, 1	3 3 6 4 5, 7	-3 3 8 6 4, 4
Re tax ve nu e	0 9 2 -1 4,	-2 3, 2 7 1	8 3 0 -7 1,	-9 9, 3 9 2
ing be fo in d ( ) Ea ter t a tax E B I T rn s re es n es	4 1 8, 9 9 5	3 7, 8 5 7	1, 1 2 4, 7 9 6	6 4 5, 1 3 5
in Ne t ter t r es ev en ue	4 6 7	4 5 6	2, 0 8 9	1, 0 1 0
in Ne t ter t e es xp en se s	-1, 7 3 8	-5, 4 9 5	-8, 3 8 8	-1 6, 8 1 6
f fec Ne t c ts ur ren cy e	2, 7 9 3	-7, 9 2 0	-2, 5 0 1	4 7 7
he f ina ia l e O t r nc xp en se s	-7 5 0	-9 7 6	-2, 9 2 6	-3, 1 9 4
ing be fo ( ) Ea tax E B T rn s re es	4 1 9, 7 6 7	2 3, 9 2 2	1, 1 1 3, 0 7 0	6 2 6, 6 1 2
Ta xe s	-7 3, 7 8 0	2, 0 7 2	-1 8 4, 6 9 3	-1 0 0, 8 1 2
f i los fo he io d Pr t o t o r s r p er	3 4 5, 9 8 7	2 5, 9 9 4	9 2 8, 3 7 7	5 2 5, 8 0 0

l d d d d V t a u e a e p r o u c s	Q 3	Q 3	Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	2 0 1 8	2 0 1 7

l re Ex ter na ve nu e	6 9, 2 2 5	2 6, 2 3 0 4	2 8 3 5 5, 7	0, 3 7 1 5 5
l p ha f r ia l In ter ter na urc se o aw m a	9, 6 -4 3 8	6 0 -2 1 3, 2	0 -2 2 7, 7 1	-6 7 2, 2 7 8
ing Op t era ex p en se s	-1 2, 3 1 6	-3 2, 8 2 5	-4 0, 6 8 4	-1 3 7, 9 2 9
ia ion d a iza ion De t t t p rec an mo r	-4, 7 6 3	-4, 2 7 3	-1 3, 1 9 7	-1 2, 1 3 6
ion l Op t E B I T era a	2, 7 6 0	-4, 4 7 0	-2 5, 7 5 4	-1 1 1, 9 8 8
is ion fo Pro tra ts r o ne ro us co n c v	-1 0, 9 6 2	1 2, 1 5 7	-1 7, 0 7 1	6 7, 3 7 8
ing be fo in d ( ) Ea ter t a tax E B I T rn s re es n es	-8, 2 0 2	7, 6 8 7	-4 2, 8 2 5	-4 4, 6 1 0
in Ne t ter t e es xp en se s	-7 0	-2 3 8	-1 3 7	-6 9 9
f fec Ne t c ts ur ren cy e	1 0	3 0	-2 9 8	-2 9 5
he f ina ia l e O t r nc xp en se s	0	-4	-2 0	-8
ing be fo ( ) Ea tax E B T rn s re es	-8, 2 6 2	7, 4 7 5	-4 3, 2 8 0	-4 5, 6 1 2
Ta xe s	1, 4 8 7	-1, 3 4 5	3, 6 9 1	8, 2 1 1
f i fo io Pr t o los t he d o r s r p er	-6, 7 7 5	6, 1 3 0	-3 9, 5 8 9	-3 7, 4 0 1

i f i i f i f F h l, h l d h d s m e a s o a n s e e	Q 3	Q 3	Y T D	Y T D
0 0 0 D K K 1,	2 0 8 1	2 0 1 7	2 0 8 1	2 0 1 7
l re Ex ter na ve nu e	1 5 6, 6 8 5	1 5 7, 4 3 0	5 1 2, 4 3 2	4 1 6, 6 2 5
l re In ter na ve nu e	1 9 7, 5 4 0	1 8 4, 7 0 0	4 6 8, 4 4 3	5 1 9, 6 7 9
l re To ta ve nu e	3 5 4, 2 2 5	3 4 2, 1 3 0	9 8 0, 8 7 5	9 3 6, 3 0 4
f g ds l d Co t o s oo so	-2 7 3, 5 9 8	-2 3 0, 3 8 8	-6 3 4, 9 9 3	-6 2 3, 5 4 7
ing Op t era ex p en se s	-3 9, 2 3 3	-3 2, 2 4 9	-1 5 2, 0 0 8	-1 4 0, 2 9 0
ia ion d a iza ion De t t t p rec an mo r	-7, 4 7 5	-7, 1 8 6	-2 2, 0 0 2	-2 3, 5 0 1
ion l Op t E B I T era a	3 3, 9 1 9	7 2, 3 0 7	1 7 1, 8 7 2	1 4 8, 9 6 6
fro ia Inc tes om e m as so c	-2, 4 5 9	-1, 0 3 7	-1, 7 3 5	-1, 0 9 7
ing be fo in d ( ) Ea ter t a tax E B I T rn s re es n es	3 1, 4 6 0	7 1, 2 7 0	1 7 0, 1 3 7	1 4 7, 8 6 9
in Ne t ter t e en es xp se s	-4 6 3	-1, 0 8 1	-1, 6 9 0	-2, 8 4 6
f fec Ne t c ts ren e ur cy	-8 6 5	-8 3 8	3, 9 2 5	-4, 7 9 2
he f ina ia l e O t r nc xp en se s	-4 9	-5 5	-2 9 5	-1 6 0
ing fo Ea be tax ( E B T ) rn s re es	3 0, 0 8 3	6 9, 2 9 6	1 7 2, 0 7 7	1 4 0, 0 7 1
Ta xe s	-5, 4 1 5	-1 2, 4 7 3	-3 0, 9 7 3	-2 5, 2 1 3
f i fo io Pr t o los t he d o r s r p er	2 4, 6 6 8	5 6, 8 2 3	1 4 1, 1 0 4	1 1 4, 8 5 8

Reconciliation of reportable segments

G i b f ( ) t t E B T o r o u p e a r n n g s e o r e a x e s	Q 3	Q 3	Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	2 0 1 8	2 0 1 7
ing Fa rm	4 1 9, 7 6 7	2 3, 9 2 2	1, 1 1 3, 0 7 0	6 2 6, 6 1 2
( lue d de d du ) V A P Va A Pr ts o c	-8, 2 6 2	7, 4 7 5	-4 3, 2 8 0	-4 5, 6 1 2
( is hm l, f is h i l a d f is h d ) F O F F O Fe ea n e	3 0, 0 8 3	6 9, 2 9 6	1 7 2, 0 7 7	1 4 0, 0 7 1
l im ina ion E t s	-8, 0 2 5	-3 2, 7 3 2	-6 2, 9 8 0	-6 9, 9 4 6
ing be fo ( ) Gr tax E B T ou p ea rn s re es	4 3 3, 5 6 3	6 7, 9 6 1	1, 1 7 8, 8 8 7	6 5 1, 1 2 5
i i i i t d l b l t t A s s e s a n a e s p e r s e g m e n		Se 3 0 t p	Se 3 0 t p	3 1 De c
0 0 0 D K K 1,		2 0 8 1	2 0 1 7	2 0 1 7
ing * Fa rm		5, 3 4 0, 3 9 5	4, 9 5 0, 9 0 6	4, 7 2 8, 4 0 2
( lue d de d du ) * V A P Va A Pr ts o c		1 9 9, 4 1 5	3 2 9, 1 1 2	3 0 2, 1 3 5
( is hm l, f is h i l a d f is h d ) F O F F O Fe ea n e		8 4 0, 1 1 9	8 0 1, 7 5 9	8 0 3, 3 5 9
l im ina ion E t s		-5 8 9, 1 9 8	-7 1 6, 2 9 1	-6 7 8, 3 8 0
l a To ta ts sse		5, 7 9 0, 7 3 1	5, 3 6 5, 4 8 6	5, 1 5 5, 5 1 6
* R ecl ific ati be ing d V of K i tw Fa AP 11 6 m DK n Q 1 2 01 8 ass on een rm an
ing Fa rm		-5 7 4, 9 1 2	-4 7 1, 5 2 2	-5 2 9, 9 3 1
( lue d de d du ) V A P Va A Pr ts o c		-3 1, 6 5 5	-5, 3 2 1	-3, 2 4 8
( is hm l, f is h i l a d f is h d ) F O F F O Fe ea n e		-4 7 1, 5 3 6	-4 6 1, 6 3 4	-5 6 2, 1 8 9
l im ina ion E t s		-6 3 0, 6 5 4	-7 6 5, 1 6 3	-4 3 3, 7 1 9
ia i i ies To ta l l b l t		-1, 7 0 8, 7 5 7	-1, 7 0 3, 6 4 0	-1, 5 2 9, 0 8 7

Note 6. Capital Commitments

The Group had capital expenditures committed but not provided in these accounts at the date of the Statement of Financial Position of approximately DKK 249 million. DKK 169 million relate to the building of the new hatchery station. DKK 67 million relate to the building of a new biogas plant.

Note 7. Transactions with Related Parties

Note 5.2 in Bakkafrost's Annual Report for 2017 provides detailed information on related parties' transactions.

Transactions between P/F Bakkafrost and its subsidiaries meet the definition of related party transactions. As these transactions are eliminated on consolidation, they are not disclosed as related party transactions.

Note 8. Fair Value Measurements

All assets/liabilities, for which fair value is recognized or disclosed, are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1: Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities.

Level 2: Valuation techniques (for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable).

Level 3: Valuation techniques (for which the lowest level input that is significant to the fair value measurement is unobservable).

For biological assets, the fair value calculation is done using a valuation model (level 3 in the valuation hierarchy) where the value is estimated based on observable market prices per period end.

For more information on these calculations, please refer to Note 4.

For assets/liabilities that are recognized at fair value on a recurring basis, the Group determines, whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement).

There have been no transfers into or out of Level 3 fair value measurements.

As at 30 September 2018, the Group held the following classes of assets/liabilities measured at fair value:

D K K 1, 0 0 0		Co t s
As ts d l ia b i l i t ies d a t fa ir v lue se an m ea su re a	Fa ir v lue a	t am ou n	Le l 1 ve	Le l 2 ve	Le l 3 ve
B io log ica l a ts ( b iom ) sse as s	1, 5 6 2, 9 4 0	9 4 1, 0 1 4	0	0	1, 5 6 2, 9 4 0
ir v As ts d a t fa lue 3 0 / 9- 2 0 1 8 se me as ur e a	1, 5 6 2, 9 4 0	9 4 1, 0 1 4	0	0	1, 5 6 2, 9 4 0
ia b i l i t ies d a t fa ir v lue 3 0 / 9- 2 0 8 L 1 m ea su re a	0	0	0	0	0
B io log ica l a ts ( b iom ) sse as s	1, 0 9 6, 6 6 4	9 0 9, 0 8 7	0	0	1, 0 9 6, 6 6 4
d a fa ir v lue 3 / 2- 2 0 As ts t 1 1 1 7 se me as ur e a	0 9 6, 6 6 1, 4	9 0 9, 0 8 7	0	0	0 9 6, 6 6 1, 4
ia b i l i ies d a fa ir v lue 3 / 2- 2 0 L t t 1 1 1 7 m ea su re a	0	0	0	0	0
io log ica l a ( b iom ) B ts sse as s	1, 4 1 6, 9 9 0	8 7 1, 3 4 3	0	0	1, 4 1 6, 9 9 0
d a fa ir v lue / As ts t 3 0 9- 2 0 1 7 se me as ur e a	1, 4 1 6, 9 9 0	8 7 1, 3 4 3	0	0	1, 4 1 6, 9 9 0
ia b i l i ies d a fa ir v lue / L t t 3 0 9- 2 0 1 7 m ea su re a	0	0	0	0	0

Note 9. Business Combinations

On 1 July 2018, Bakkafrost purchased the business and assets in North Landing via Bakkafrost USA LLC.

The purchase is paid in cash and financed by existing facilities.

The key employees of North Landing will continue in Bakkafrost USA LLC.

The fair value of intangible assets has been determined on an estimated fair value. Fair value has been identified in customer relationship employing generally accepted valuation techniques. The market value of the customer relationship is measured to DKK 6.2 million.

The fair value of property, plant and equipment has been determined based a 3rd party valuation.

From 1 July to 30 September 2018, the acquired business contributed with a profit of -2,8 mDKK to the Group's results.

Identifiable assets assumed:

i b le In tan ts g as se	1 2, 2 5 8
lan d e ip Pro ty t a t p er p n qu me n ,	1 3, 3 7 2
Inv to en ry	1, 5 9 0
l n i de i f ia b le To ta t t ts e n as se	2 7, 2 2 1

Note 10. APM

- Alternative Performance Measures

Bakkafrost's financial information is prepared in accordance with international financial reporting standards (IFRS). In addition, the management's intention is to provide alternative performance measures, which are regularly reviewed by the management to enhance the understanding of the company's performance, but not replacing the financial statements prepared in accordance with IFRS. The alternative performance measures presented may be determined or calculated differently by other companies. Bakkafrost's experience is that these APM's are frequently used by analysts, investors and other parties.

These APM's are adjusted IFRS measures, defined, calculated and used in a consistent and transparent manner over the years and across the company where relevant.

NIBD

Net interest-bearing debt consists of both current and non-current interest-bearing liabilities, less related current and non-current hedging instruments, financial instruments, such as debt instruments and derivatives and cash and cash equivalents. The net interest-bearing debt is a measure of the Group's net indebtedness that provides an indicator of the overall balance sheet strength. It is also a single measure that can be used to assess both the Group's cash position and its indebtedness. The use of the term 'net debt' does not necessarily mean that the cash included in the net debt calculation is available to settle the liabilities included in this measure. Net debt is an alternative performance measure as it is not defined in IFRS. The most directly comparable IFRS measure is the aggregate interest-bearing liabilities (both current and non-current), derivatives and cash and cash equivalents. A reconciliation is provided below.

3 0 Se t p	3 1 De c
2 0 8 1	2 0 1 7
3 0 6, 6 1 7	3 0 9, 5 5 1

i in De t fo ter t- d c p os r es an ur ren cy sw ap	0	8 4, 6 3 0
iva ive De t r s	-6 3 0	-1 2 7, 2 5 5
in ing Lo d s ho t- ter ter t- be de b t ng - a n r m es ar	-5 9 1, 9 5 6	-5 2 4, 9 9 6
in ing Ne t ter t- be de b t es ar	-2 8 6, 4 1 9	-2 5 8, 0 7 0

Operational EBIT

Operational EBIT is EBIT aligned for fair value adjustments, onerous contracts provisions, income from associates and revenue tax.

Operational EBIT is a major alternative performance measure in the salmon farming industry. A reconciliation from EBIT to Operational EBIT is provided below.

	Q 3	Q 3	Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	2 0 1 8	2 0 1 7
E B I T	4 3 4, 2 2 8	8 4, 0 8 2	1, 1 8 9, 1 2 8	6 7 8, 4 4 8
ir v lue d j f Fa tm ts a a us en o b io log ica l a ts sse	-2 9 3, 4 5 9	1 5 5, 1 2 2	-4 3 5, 3 6 7	3 3 4, 8 4 6
On tra ts ero us co n c	1 0, 9 6 8	-1 2, 1 5 7	1 7, 0 7 7	-6 7, 3 7 6
fro ia Inc tes om e m as so c	2, 4 5 9	1, 0 3 7	1, 7 3 5	1, 0 9 7
Re tax ve nu e	1 4, 0 9 2	2 3, 7 1 2	7 1, 8 3 0	9 9, 3 9 2
ion l Op t E B I T era a	1 6 8, 2 8 8	2 5 1, 7 9 6	8 4 4, 4 0 3	1, 0 4 6, 4 0 7

Operational EBIT per kg

i F t:	୓୮ ୧୭୬ ୪ ୉ ୆ ୍ ୘ ୊ୟ ୧୬ ୟ୲ ୲ ୣ୰ ୟ ୰୫ ୥ ୱୣ ୥ ୫ ୣ୬
a r m n g s e g m e n	୪ ୦ୟ ୢ ୴ ୪୳ ሺ ሻ ୘୭ ୲ୟ ୲ୣ ୰୴ ୣୱ ୭ ୫ ୣୱ ୥ ୵
V A P t: s e m e n	୪ ୓୮ ୧୭୬ ୉ ୆ ୍ ୘ ୚ ୅ ୔ ୱ ୟ୲ ୲ ୣ୰ ୟ ୣ୥ ୫ ୣ୬
g	୘୭ ୪ ୴ ୪୳ ୢ୳ ୢ ሺ ୧ୟ ୪ ୥ ሻ ୲ୟ ୲ୣ ୭ ୫ ୣୱ ୮ ୰୭ ୡୣ ୰ୟ ୵ ୫ୟ ୰ ୵
i d F V A P: a r m n a n	୪ ୢ ୓୮ ୧୭୬ ୉ ୆ ୍ ୘ ୊ୟ ୧୬ ୚ ୅ ୔ ୱ ୟ୲ ୲ ୣ୰ ୟ ୰୫ ୥ ୟ୬ ୣ୥ ୫ ୣ୬
g	୪ ୦ୟ ୢ ୴ ୪୳ ሺ ሻ ୘୭ ୲ୟ ୲ୣ ୰୴ ୣୱ ୭ ୫ ୣୱ ୥ ୵

EBITDA

Earnings before interest, tax, depreciations and amortizations (EBITDA) is a key financial parameter for Bakkafrost's FOF segment. EBITDA before other income and other expenses is defined as EBITDA less gains and losses on disposals of fixed assets and operations and is reconciled in the section Group overview. This measure is useful to users of Bakkafrost's financial information in evaluating operating profitability on a more variable cost basis as it excludes depreciations and amortization expenses related primarily to capital expenditures and acquisitions, which occurred in the past, nonrecurring items, as well as evaluating operating performance in relation to Bakkafrost's FOF segments competitors. The EBITDA margin presented is defined as EBITDA before other income and other expenses divided by total revenues.

Adjusted EPS

Adjusted EPS is based on the reversal of certain fair value adjustments shown in the table below, as it is Bakkafrost's view that this figure provides a more reliable measure of the underlying performance.

	Q 3	Q 3	Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	2 0 1 8	2 0 1 7
f i fo he he Pro t t to t r y ea r ha ho l de f P / F Ba k ka fro t s re rs o s	3 5 5, 8 5 5	5 6, 2 1 5	9 6 6, 9 1 2	5 3 3, 3 1 1
ir v lue d j tm t o f b iom Fa a a us en as s	-2 9 3, 9 4 5	1 1 2 2 5 5,	3 3 6 -4 5, 7	3 3 8 6 4, 4
On tra ts is ion ero us co n c p rov s	1 0, 9 6 8	-1 2, 1 5 7	1 0 7, 7 7	-6 3 6 7, 7
fa ir v lue d j tm t Ta x o n a a us en	0, 8 8 5 4	-2 3 5, 7 4	2 9 2 7 5,	8, 1 -4 4 5
j f i fo A d te d p t t he to us ro r y ea r ha ho l de f / f k ka fro P Ba t s re rs o s	1 2 4, 2 1 2	1 7 3, 4 4 6	6 2 3, 9 1 4	7 5 2, 6 3 6
im ig h d a be T te e-w e ve rag e n um r f s ing ha ts tan d t hr h o res ou ou g he t y ea r	4 8, 6 4 1, 8 7 2	4 8, 6 0 6, 5 1 2	4 8, 6 4 1, 8 7 2	4 8, 6 0 6, 5 1 2
d j d e ing ha A te us ar n s p er s re fo fa ir v j f ( be lue d tm t o re a a us en b iom d p is ion fo as s a n rov s r d d S tra ts te E P	2. 5 5	3. 5 7	2. 8 3 1	8 1 5. 4
) ( j ) on ero us co n c a us

ROCE

Return on average capital employed (ROCE) is defined as the period's operational EBIT divided by the average capital employed, which is total assets adjusted for total current liabilities. The performance measure is expressed as a percentage and is useful for evaluating Bakkafrost's profitability.

	Q 3	Q 3	Y T D	Y T D
D K K 1, 0 0 0	2 0 1 8	2 0 1 7	2 0 1 8	2 0 1 7
ion l Gr Op t E B I T ou p - era a	1 6 8, 2 8 8	2 5 1, 7 9 6	8 4 4, 4 0 3	1, 0 4 6, 4 0 7
i l loy d Av Ca ta Em era g e p p e	5, 2 1 5, 3 1 8	4, 6 5 1, 0 1 8	4, 9 7 1, 7 7 2	4, 4 7 3, 2 1 9
R O C E	3. 2 %	% 5. 4	0 % 1 7.	2 3. % 4

Contacts

P/F BAKKAFROST Bakkavegur 8 FO-625 Glyvrar Faroe Islands Telephone: +298 40 50 00 Fax: +298 40 50 09 Email: bakkafrost@bakkafrost.com Website: www.bakkafrost.com