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Austevoll Seafood ASA

Interim / Quarterly Report Aug 24, 2017

3546_rns_2017-08-24_308b3af7-3a70-4108-9551-2509af20a7c3.pdf

Interim / Quarterly Report

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Financial Report Q2 and H1 2017

Index

Key figures for the Group03
Q2 2017 04
Operating segments 04
Cash flows Q2 2017 07
Financial information, first half 201708
Cash flows, H1 2017 08
Balance sheet as at 30 June 201708
Risks and uncertainties 09
Shareholders09
Market and outlook 10
Income statement12
Condensed statement of comprehensive income12
Statement of financial position 13
Condensed statement of changes in equity 13
Cash flow statement14
Note 1 Accounting policies 15
Note 2 Related party transactions 15
Note 3 Biological assets15
Note 4 Segments 18
Note 5 Associates 19
Note 6 List of the 20 largest shareholders 20
Declaration of the Board of Directors and CEO 21

Austevoll Seafood ASA

Alfabygget N-5392 Storebø NORWAY

www.auss.no

FINANCIAL REPORT Q2 AND H1 2017

Extremely good prices realised for Atlantic salmon/trout in Q2

As planned, fall in harvest volume of salmon and trout from Q2 2016 to Q2 2017

Good activity within whitefish in the quarter

Early start for first fishing season in Peru, total quota of 2.8 million tonnes against 1.8 million tonnes in same season in 2016

  • Total volume caught before end of season on 31 July was 2.37 million tonnes against 0.9 million tonnes in same season in 2016
  • Austral caught 160,000 tonnes by end of season against 67,000 tonnes in same season in 2016

Higher volume of horse mackerel in Chile and good fishing season

According to season, lower activity within pelagic operations for consumer products in Europe, but good activity within production of fishmeal and oil

Austevoll Seafood ASA issued a new unsecured bond loan of NOK 500 million in June. The loan has a maturity of six years at terms: 3-month NIBOR + 2.35%.

All figures in NOK 1,000 Q2 2017 Q2 2016 H1 2017 H1 2016 2016
Operating revenue 5 019 195 4 558 229 11 094 149 8 970 468 18 911 523
EBITDA 1 322 119 984 919 2 877 464 1 870 663 3 880 831
EBITDA % 26 % 22 % 26 % 21 % 21 %
EBIT 1 089 974 789 594 2 420 857 1 485 585 2 912 911
Pre tax profit 1 816 827 659 092 2 232 487 1 566 788 4 682 581
Earnings per share (EPS) 3,52 1,09 4,54 2,92 8,17
Total assets 35 150 568 28 039 359 35 150 568 28 039 359 35 001 403
Equity 19 053 074 16 004 776 19 053 074 16 004 776 18 212 820
Equity ratio 54 % 57 % 54 % 57 % 52 %
Net interest bearing debt (NIBD) 5 169 271 1 911 029 5 169 271 1 911 029 5 492 880

KEY FIGURES FOR THE GROUP

Q2 2017

Group operating revenue in Q2 2017 totalled NOK 5,019 million, compared with NOK 4,558 million in Q2 2016.

The increase in revenue was generated by the pelagic segment as a result of increased quotas in Peru and an earlier start for the first fishing season in 2017 when compared with the same season in 2016. This gave rise to a higher sales volume for fishmeal in Q2 2017 compared with Q2 2016.

EBITDA in Q2 2017 was NOK 1,322 million, up from NOK 985 million in the same quarter of 2016. The increase in EBITDA comes from the operating segment for Atlantic salmon/ trout/whitefish and the pelagic segment. The increase in EBITDA from salmon/trout/whitefish is attributed to the very high prices realised for salmon and trout in the quarter, in addition to the contribution to profit from whitefish (Havfisk/Lerøy Norway Seafoods). Havfisk and Lerøy Norway Seafoods were not part of the Group in Q2 2016. The improvement in profit for the pelagic segment is attributed to increased quotas and higher sales volume in Peru in Q2 2017 when compared with the same period in 2016.

EBIT before fair value adjustment related to biological assets in Q2 2017 was NOK 1,090 million (Q2 2016: NOK 790 million). EBIT after fair value adjustment related to biological assets in Q2 2017 was NOK 1,792 million (Q2 2016: NOK 639 million). The fair value adjustment related to biological assets for the quarter was positive at NOK 702 million (Q2 2016: NOK -150 million).

Income from associates in Q2 2017 totalled NOK 116 million (Q2 2016: NOK 69 million). The increase in profit from associates from Q2 2016 to Q2 2017 is attributed to Norskott Havbruk AS, and as a result of good operations and very good prices realised for salmon. The largest associates are Norskott Havbruk AS (owner of the Scotland-based fish farming company Scottish Sea Farms Ltd.) and Pelagia AS.

The Group's net interest expense in Q2 2017 totalled NOK 68 million (Q2 2016: NOK 58 million).

Profit before tax and fair value adjustment related to biological assets for Q2 2017 amounted to NOK 1,104 million, compared with NOK 810 million in Q2 2016.

Profit before tax for the quarter totalled NOK 1,817 million (Q2 2016: NOK 659 million). Profit after tax was NOK 1,398 million (Q2 2016: NOK 504 million).

The Group is financially sound with an equity ratio of 54%.

The Group had net interest-bearing debt totalling NOK 5,169 million at the end of Q2 2017, compared with NOK 1,911 million at the same time last year.

Net interest-bearing debt at the end of Q2 2016 was impacted by Lerøy Seafood Group ASA (LSG) carrying out a private placement in June 2016 worth a total of NOK 2,075 million. The proceeds from the placement were used to part-finance LSG's acquisitions of Havfisk ASA and Lerøy Norway Seafoods (former Norway Seafoods Group AS) in August 2016.

OPERATING SEGMENTS

Austral Group S.A.A (Peru)

Austral Group S.A.A (Austral) is involved in fishing, production of fishmeal and oil and consumer products. Austral holds 6.87% of the total quota for anchoveta in Central/North Peru, and just under 4% of the quota in South Peru. In addition, the company has fishing rights for horse mackerel and mackerel.

Anchoveta is used to produce fishmeal and oil, while horse mackerel/mackerel is fished for consumer products.

The main fishing seasons for anchoveta in Central/North Peru are from April to July and November to January.

Fishmeal and oil are produced in four factories, located in Coishco, Chancay, Pisco and Ilo. The company also produces consumer products in facilities that share premises with the fishmeal and fish oil factories in Coishco and Pisco.

The first anchoveta fishing season in Central/North Peru started as early as 22 April. The total quota for the season was 2.8 million tonnes, against 1.8 million tonnes in the same season in 2016.

By the end of June, Austral had caught 80% of their total quota for the season of 193,000 tonnes. The season ended on 31 July. Fishing conditions in July were very difficult, with poor weather, closed harbours and a concentration of fish within the five-mile limit where the company's vessels are not permitted to fish. By the end of the season, Austral had caught a total 160,000 tonnes (83%). The catch volume in the same season of 2016 was 67,000 tonnes (55%).

On a nationwide scale, 2.37 million tonnes of the total quota allocated of 2.8 million tonnes had been caught by season end. This is a substantial increase on the first season of 2016, when 0.9 million tonnes of the total quota of 1.8 million tonnes were caught by the end of the season.

Partly due to the early season start, approx. 58% of the total production of fishmeal in the quarter was also sold in the second quarter. By comparison, the later season start in 2016 resulted in a limited sales volume of fishmeal in Q2 2016.

The company is starting Q3 2017 with an inventory of 25,500 tonnes of fishmeal and oil. At the start of the third quarter of 2016, the company had a corresponding inventory of approx. 11,400 tonnes.

Operating revenue in Q2 2017 totalled NOK 489 million (Q2 2016: NOK 55 million) and EBITDA amounted to NOK 181 million (Q2 2016: NOK -28 million).

Peru is one of the largest producers of fishmeal and oil in the world. Production volumes in Peru normally have a direct influence on the global prices for fishmeal. Over the last three years, Peru has struggled with low quotas and difficult operating conditions. The weather phenomenon known as "El Niño" has made its impact during the period. The institutions that monitor this weather phenomenon are now reporting a return to normal for sea temperatures in 2017. This is supported by the positive development in fishing.

Foodcorp Chile S.A (Chile)

Foodcorp Chile S.A (FC) is involved in fishing, consumer products, and production of fishmeal and oil. FC has a quota of 9.1% for fishing horse mackerel in South Chile in addition to a quota for sardine/anchoveta.

All FC's facilities share the same premises in Coronel.

The main season for horse mackerel fishing is from December to July. The main season for sardine/anchoveta fishing is divided into two periods. The first season starts in March and ends in July/August. The second season normally starts in October/November.

At the end of the second quarter, the company had fished its entire quota for horse mackerel, a total volume of 21,650 tonnes. The company has also signed an agreement for fishing rights totalling 18,000 tonnes of horse mackerel from a third party, caught by FC with the company's own vessels. At the end of June 2017, the company had caught approx. 3,200 tonnes of this volume. By mid-August, the catch volume was 13,000 tonnes. The fish is processed at FC's factory in Coronel.

Demand for frozen horse mackerel has seen an increase in 2017 on what are traditionally the main markets for this product. The increase in demand has given rise to increased prices when compared with 2016.

Squid is still an important raw material for the company, and provides increased activity within production of frozen goods for consumers. The company received a somewhat lower volume of squid in Q2 2017 than in the same period of 2016 – down from 8,700 tonnes to 6,500 tonnes. The market is strong with good prices realised for the products.

The coastal fleet's fishing for sardine/anchoveta started as normal in March, and catches have been good – as opposed to the same season last year when catches were difficult due to the "El Niño" weather phenomenon. Foodcorp Chile S.A purchased a total of approx. 13,000 tonnes of sardine/anchoveta in Q2 2017, compared with approx. 4,000 tonnes in the same quarter of 2016.

Operating revenue in Q2 2017 totalled NOK 163 million (Q2 2016: NOK 151 million) and EBITDA amounted to NOK 71 million (Q2 2016: NOK 22 million).

There has been a marked decline in fishing for horse mackerel in Chile since 2008/2009. International fish stock management was introduced in 2012, along with the first total quota for horse mackerel catches. Responsibility for fish stock management is assigned to the South Pacific Regional Fisheries Management Organization. The quotas established in subsequent years have only seen a minor increase, in order to safeguard the build-up in biomass. We are confident that the current practice of conservative management lays the foundations for a sustainable biomass in the long term and, consequently, increased activities for the Group's business in Chile.

Lerøy Seafood Group ASA (LSG)

In Q2 2017, LSG reported operating revenue of NOK 4,232 million (Q2 2016: NOK 4,262 million) and EBITDA before fair value adjustment related to biological assets of NOK 948 million (Q2 2016: NOK 876 million).

As previously reported, the harvest volume in Q2 2017 was significantly lower than in Q1 2017. The company harvested 26,156 tonnes gutted weight of salmon and trout in the quarter, compared with 41,132 tonnes in the same quarter of 2016, representing a decline in harvest volume of 36%. The harvest volume in Q2 2017 must be seen in light of the high volume harvested in Q1 2017. LSG currently expects the total harvest volume in 2017 to be higher than in 2016.

The prices for Atlantic salmon are impacted by the fact that Norway, the largest producer of Atlantic salmon in the world, has not increased domestic production since 2012. This, together with a positive development in demand and the weaker Norwegian krone, resulted in historically high prices for salmon.

LSG harvested a low volume – 26,156 GWT – in the second quarter of 2017 and subsequently reported a high contract share of 45%. Contract prices remain lower than spot prices in the quarter. The spot prices for trout have seen a significant improvement in the second half of 2016 and early 2017, and the prices realised for trout in Q2 2017 are marginally higher than for salmon. The Group can happily confirm that the prices for trout – after what will soon be three very difficult years – have over time re-gained the same level as salmon prices. This is the result of a combination of sales to new markets and a slight reduction in production. The trade barriers that blocked access to the all-important trout market in Russia in August 2014, and which still remain, have as previously reported caused substantial losses for LSG.

Release from stock costs in Q2 2017 were higher than in Q1 2017, impacted by the low harvest volume. In the Group's opinion, these costs are extraordinarily high. One important factor here is higher feed costs, but other factors include the extremely high direct and indirect costs related to measures to comply with the statutory limits for salmon lice.

Release from stock costs for Lerøy Aurora in Q2 2017 were higher than the figures for Q1 2017. At the time of writing, release from stock costs are expected to be lower in the second half of 2017.

Release from stock costs for Lerøy Midt in Q2 2017 were higher than in Q1 2017, mainly due to the low harvest volume. As previously reported, the release from stock costs for Lerøy Midt in 2017 will be affected by the extreme challenges in Central Norway in the autumn of 2016. The development in production in 2017 is positive. Release from stock costs are expected to be lower in the next quarters.

Release from stock costs for Lerøy Sjøtroll in Q2 2017 were higher than the figures for Q1 2017. There is substantial potential for cost reductions, but release from stock costs are currently expected to remain relatively stable or slightly on the decline in 2017.

LSG has a total of 146 licences: 26 in Troms, 57 in Central Norway and 63 in West Norway.

In the autumn of 2016, Lerøy Seafood Group ASA obtained 100% ownership of both Havfisk ASA (Havfisk) and Norway Seafoods Group AS. As a result of this transaction, both companies were consolidated into Lerøy Seafood Group ASA as of 1 September 2016. Norway Seafoods Group AS subsequently changed its name to Lerøy Norway Seafoods AS (LNWS).

The primary segment for Havfisk is wild catches of whitefish. Havfisk has licence rights to harvest just above 10% of the total Norwegian cod quotas in the zone north of 62 degrees latitude, corresponding to more than 30% of the total quota allocated to the trawler fleet. Havfisk has nine trawlers in operation and one on order, scheduled for delivery in the first quarter of 2018. Havfisk owns several processing plants, which are mainly leased out to LNWS on long-term contracts. Havfisk's trawler licences stipulate an operational obligation for these processing plants.

Havfisk's total catch volume in Q2 2017 was 16,769 tonnes, compared with 17,020 tonnes in Q2 2016. The ratio of saithe in Q2 2017 was significantly higher than in Q2 2016. The harvest volume in Q2 2017 comprised 4,067 tonnes of cod, 6,585 tonnes of saithe and 2,050 tonnes of haddock. The distribution in Q2 2016 was 6,057 tonnes of cod, 1,820 tonnes of saithe and 4,181 tonnes of haddock. On comparison with Q2 2016, prices for cod were up 9%, prices for haddock were up 30% while prices for saithe were down 28%. The remaining quotas for cod, haddock and saithe as of Q2 2017 are approximately 25,000 tonnes, on par with the remaining quotas at the same time last year.

LNWS's primary business is processing wild caught whitefish. The company has eight processing plants in Norway, five of which are leased from Havfisk. LNWS is the largest purchaser of cod from the coastal fishing fleet in Norway. LNWS previously owned two facilities in Denmark, but these were sold at the start of 2017 to Seafood International A/S – a Danish seafood corporation in which Lerøy Seafood Group ASA owns one third of the shares.

Significant changes were implemented in LNWS in Q4 2016. With effect from 1 January 2017, all sales and logistics are coordinated with LSG's marketing department in Bergen as part of the business transfer.

The total contribution to operating profit made by Havfisk/ LNWS in Q2 2017 was NOK 86 million.

LSG has major downstream activities and a clearly defined goal to increase demand for seafood in the form of new products and market development. LSG sells, processes and distributes own-produced salmon and trout along with whitefish from its own fleet of trawlers, but also has substantial activities in cooperation with third parties. As a result, the Group now supplies a full range of seafood products.

A low harvest volume in Q2 2017 has affected the level of activity for processing salmon and trout, but LSG has identified positive synergy effects within marketing as a result of the acquisitions made within whitefish.

For further information, please read LSG's presentation for Q2 2017.

Br. Birkeland AS (BRBI)

BRBI owns three pelagic ring net vessels/trawlers. Two of these vessels have 650 basic tonne capacity for ring nets and a 1,425 trawler quota for blue whiting. The third vessel has 471 basic tonne capacity for ring nets. The company also has two vessels that fish for snow crab. In addition to fishing activities, BRBI owns seven licences for farming Atlantic salmon/trout in Hordaland.

In Q2 2017, the BRBI segment reported operating revenue of NOK 305 million (Q2 2016: NOK 210 million) and EBITDA before fair value adjustment related to biological assets of NOK 118 million (Q2 2016: NOK 105 million).

In Q2 2017, the ring net vessels have fished for blue whiting and North Sea herring. Fisheries for blue whiting started somewhat later than planned, and therefore also continued in April. The prices realised for blue whiting were down compared with the same quarter last year. This is due to the substantial increase in quotas from 2016 to 2017. The North Sea herring season closed in June and prices realised were considerably lower than in 2016.

BRBI harvested a much higher volume of salmon in Q2 2017 when compared with both Q1 2017 and Q2 2016 – approx. 3,700 tonnes in Q2 2017 compared with 2,300 tonnes in Q2 2016. Realised salmon prices in Q2 2017 were good, despite the low average weight of the fish harvested.

Norwegian vessels fishing for snow crab have not been able to fish in the Barents Sea Loophole in 2017, and have therefore operated in the waters surrounding Svalbard. In 2017, these waters had a lot of ice, making fishing difficult. Snow crab catches in Q2 2017 amounted to approx. 257 tonnes, compared with 410 tonnes in Q2 2016.

Pelagia AS

In accordance with IFRS 11, AUSS' consolidated financial statements report the joint venture Pelagia AS as an associate. In the notes to the financial statements for this segment (Note 4) and in the description of the segment in this report, the financial information comprises 50% of Pelagia AS' total revenue, EBITDA, EBIT and sales volume. This corresponds to AUSS' equity interest in Pelagia AS.

Revenue for the quarter was NOK 596 million (Q2 2016: NOK 533 million) and EBITDA was NOK 47 million (Q2 2016: NOK 60 million).

Receipt of products for fishmeal and fish oil has seen a high level of activity in the quarter. This is due to a later start for the blue whiting season and increased quotas for sand eel. Receipt of products for consumers has, as normal, seen a low level of activity in the quarter. The main season in this quarter is for North Sea herring. Total receipt of raw materials in the Group (100%) in Q2 2017 for fishmeal/FPC and fish oil production was approx. 313,000 tonnes, compared with approx. 211,000 tonnes in the same quarter of 2016. The volume of raw materials received for consumer products was 47,000 tonnes in Q2 2017, compared with 51,000 tonnes in Q2 2016.

As a result of increased quotas for fishing in South America and the North Atlantic for the species of fish used to produce fishmeal and oil, the market prices for fishmeal and oil have fallen in the first half of 2017.

In June 2017, Pelagia signed an agreement with FMC regarding the purchase of the company's Epax Omega-3 operations. FMC is a leading manufacturer of Omega-3 products based on marine ingredients. The products can be utilised for dietary supplements and in pharmaceutical products. The acquisition will expand Pelagia's existing product range and is part of the strategy to increase value generation from pelagic raw materials. The transaction was finalised on 1 August 2017.

CASH FLOWS Q2 2017

Cash flow from operating activities in Q2 2017 was NOK 269 million (Q2 2016: NOK 1,033 million). This cash flow is a reflection of increased tied-up working capital within both salmon/trout and the pelagic segment. Moreover, tax payments have been made of NOK 352 million in Q2 2017, compared with NOK 36 million in Q2 2016.

Cash flow from investing activities in Q2 2017 was NOK -311 million (Q2 2016: NOK 22 million), and includes e.g. dividends from associates of NOK 210 million in the quarter. Dividends received from associates in Q2 2016 amounted to NOK 227 million.

Cash flow from financing activities in Q2 2017 was NOK -338 million (Q2 2016: NOK 164 million). In June 2017, AUSS issued an unsecured bond loan of NOK 500 million. The loan has a maturity of six years and the terms are 3-month NIBOR + 2.35% margin. Dividend payments in the quarter totalled NOK 947 million. Dividends paid in the same quarter last year totalled NOK 1,695 million. Moreover, cash flow from financing activities in Q2 2016 was impacted by the private placement carried out by LSG of NOK 2,075 million.

Net change in cash in the second quarter of 2017 was NOK -381 million (Q2 2016: NOK 1,219 million).

The Group's cash and cash equivalents at the end of Q2 2017 totalled NOK 4,047 million, compared with NOK 4,979 million at the end of Q2 2016.

FINANCIAL INFORMATION, FIRST HALF 2017

The Group reported operating revenue of NOK 11,094 million for the first half of 2017 (H1 2016: NOK 8,970 million). EBITDA before value adjustment related to biological assets in the first half of 2017 was NOK 2,877 million (H1 2016: NOK 1,871 million).

The increase in revenue and EBITDA comes from both the operating segment for salmon/trout/whitefish and the pelagic segment. EBIT before value adjustment related to biological assets in the first half of 2017 was NOK 2,421 million (H1 2016: NOK 1,486 million). The fair value adjustment related to biological assets in H1 2017 was negative at NOK 319 million. The corresponding figure for the same period in 2016 was positive at NOK 14 million. EBIT after value adjustment related to biological assets in the first half of 2017 was NOK 2,102 million (H1 2016: NOK 1,499 million).

Income from associates for H1 2017 totalled NOK 266 million (H1 2016: NOK 165 million). The increase in income from associates is mainly attributable to Norskott Havbruk AS, which owns the Scottish farming company, Scottish Sea Farm Ltd.

The Group's net interest expense in H1 2017 totalled NOK 143 million (H1 2016: NOK 119 million).

Profit before tax and fair value adjustment related to biological assets for H1 2017 was NOK 2,505 million, compared with NOK 1,534 million in H1 2016.

Profit after tax for the first half of 2017 totalled NOK 1,742 million (H1 2016: NOK 1,197 million).

CASH FLOWS, H1 2017

Cash flow from operating activities for the first half of 2017 was NOK 2,001 million (H1 2016: NOK 1,822 million). Tax payments in H1 2017 totalled NOK 567 million (H1 2016: NOK 217 million).

Cash flow from investing activities for the first half of 2017 was NOK -559 million (H1 2016: NOK 828 million). The positive cash flow in H1 2016 was mainly generated by AUSS' sale of LSG shares in Q1 2016.

Cash flow from financing activities for H1 2017 was NOK -1,135 million (H1 2016: NOK -138 million). In February 2017, AUSS released an unsecured bond loan of NOK 400 million. In June 2017, AUSS issued an unsecured bond loan of NOK 500 million with maturity of six years and the following terms: 3-month NIBOR + 2.35% margin. Cash flow from financing activities in H1 2016 was impacted by the private placement carried out by LSG in June 2016 of a total NOK 2,075 million. The Group paid dividends of NOK 951 million in H1 2017, compared with NOK 1,695 million in the same period in 2016.

Net change in cash for the Group in H1 2017 was NOK 307 million (H1 2016: NOK 2,512 million).

The Group's cash and cash equivalents at the end of June 2017 totalled NOK 4,047 million compared with NOK 4,979 million at the end of June 2016.

BALANCE SHEET AS AT 30 JUNE 2017

The Group had a balance sheet total at end June 2017 of NOK 35,151 million, compared with NOK 28,039 million at end June 2016.

The Group is financially sound with book equity at 30 June 2017 of NOK 19,053 million, equivalent to an equity ratio of 54%. At end June 2016, the book equity was NOK 16,005 million, or an equity ratio of 57%.

Net interest-bearing debt at the end of the June 2017 totalled

NOK 5,169 million, compared with NOK 1,911 million at 30 June 2016. Net interest-bearing debt at the end of June 2016 was affected by LSG's private placement mentioned above. Proceeds from the placement were utilised as part of the settlement for the shares in Havfisk ASA and Norway Seafoods Group ASA. The transaction was completed in August 2016.

RISKS AND UNCERTAINTIES

The Group's risk exposure is described in the Annual Report 2016. The Group's activities are essentially global and will always be impacted to varying degrees by developments in the global economy. In light of the turmoil in the global economy in recent years, including trade barriers and geopolitical risk, the general consensus is that macroeconomic uncertainty is still greater than what was previously considered normal. Although this situation may have negative effects on the real economy in most markets, we are confident that AUSS' core activities are founded on long-term sustainable assets within interesting segments of the global seafood industry.

The Group is exposed to risk related to the value of the Group's assets. Risk arises mainly as a result of changes in the prices of raw materials and finished products, to the extent that these changes impact the company's competitiveness and earnings potential over time. Operational factors, such as marine biomass, fishing conditions and price trends for the Group's input factors, are other key parameters that have an impact on risk for the Group.

At the end of Q2 2017, the Group had live fish on its balance sheet worth around NOK 6 billion. Biological risk has been and will remain a substantial risk factor in the Group's operations. Assessing and managing biological risk must therefore be a part of the Group's core expertise.

Changes in fishing patterns and quota adjustments mean fluctuations in catch volumes from quarter to quarter and year to year, and hence varying utilisation of the Group's production facilities. The seasonal fluctuations in catch volumes cause similar fluctuations in the quarterly key figures.

After LSG's acquisition of Havfisk and LNWS, the Group has substantial exposure in relation to catches of various species of whitefish according to Norwegian quotas. The Group faces political risk involving management by the authorities, including framework conditions for fish farming and licence terms related to the legislation governing fisheries. In Q1 2017, the Norwegian government published its White Paper, "Cod trawler fleet land-lock obligation system", containing

recommendations for significant amendments to the framework conditions for Havfisk and Lerøy Norway Seafoods. This White Paper was scheduled for presentation to Parliament in Q2 2017, but the recommendation was withdrawn and was not presented for discussion. As previously reported, LSG was of the opinion that the White Paper ("Cod trawler fleet land-lock obligation system") contained substantial weak points. If adopted, the recommendation to revoke a considerable share of the Group's quota would have impaired the potential for industrial development in Norway, and therefore represented consequences for the Group and its employees both on and offshore. LSG had hopes for a political process resulting in a final outcome that would boost the potential for positive industrial development of the whitefish industry in Norway. Rational adaptations to current regulations would have strengthened the potential to make forward-looking investments on and offshore. With the withdrawal of the White Paper, LSG now looks forward to being able to develop these businesses in line with their long-term industrial objectives, and without interruption.

In the approval granted by the Ministry of Trade, Industry and Fisheries, LSG's ownership of Havfisk and LNWS is linked to the ownership approved when the application was submitted, thereby requiring approval of any changes in ownership not covered by the exemption granted by the Ministry. The nationality requirement in section 5 of the Act relating to the right to participate in fishing must also be met.

The majority of the Group's debt is at floating interest rates, but fixed-rate contracts have been entered into for approx. 19% of the Group's interest-bearing debt.

The Group is exposed to fluctuations in foreign exchange rates, particularly the EUR, GBP, USD, Chilean peso and Peruvian sol. Measures to reduce this risk in the short term include forward contracts and multi-currency overdraft facilities. Furthermore, parts of the long-term debt are adjusted in relation to earnings in the same currency.

SHAREHOLDERS

The company had 4,817 shareholders as of 30 June 2017. The number of shareholders at the start of the period was 4,819.

The share price at the start of Q2 2017 was NOK 63.00 and NOK 71.00 at the end of the quarter.

A list of the 20 largest shareholders can be found in Note 6 in this report.

MARKET AND OUTLOOK

Fishmeal and fish oil

In Europe, the second quarter has also been a good quarter for production. The price level for fishmeal in Europe has been on the decline in the first half of 2017, impacted by a good second fishing season in 2016 in Peru and a total quota of 2.8 million tonnes for the first season in 2017. Moreover, the quotas in the North Atlantic for fish species used for fishmeal and oil in Europe have seen a substantial increase in 2017 when compared with 2016. These prices have stabilised in Q3 2017. Realised prices for fishmeal FOB Peru (superprime) are currently USD 1,450, while CIF Hamburg prices for fishmeal (standard 64%/65%) are USD 1,355.

Consumer products

The Group's production of consumer products takes place in Europe and South America. In Europe, the season for herring and capelin is – as normal – from January to April and the season for North Sea herring from May onwards. The mackerel season normally starts in September and continues throughout the autumn. The remaining quotas for Norwegian springspawning herring are also caught during the same period. The first half of the year is the season for horse mackerel in South America. The ban on imports to Russia and import quotas and currency restrictions on sales in Nigeria have made marketing much more complex. The companies have worked hard to find alternative markets for the products traditionally exported to Russia and Nigeria – the main markets for these products. The market situation in Nigeria has improved to date in 2017. We note that the Group's products are faring well in competition with alternative sources of protein.

Production, sale and distribution of salmon, trout and white fish At the time of writing, it appears that there are limited opportunities for growth in the global supply of salmon and trout in the next few years. In light of the market prospects and the segment's potential for improvements in own production, the outlook is good. Salmon lice prevention costs are expected to increase in 2017, while costs related to treatment are expected to fall. There is significant potential for reductions in treatment costs, and the Group has a clearly defined strategy and goal to realise this potential, while acknowledging that it is difficult to specify a timeline for such a development.

LSG has been a driver towards the end market via its fully integrated value chain, product development, increased traceability and availability for the broadest possible product range. In line with market trends, the company has launched

consumer packaged products for whitefish, salmon and trout. The Group is confident that there is significant potential for value generation in further developing the whitefish market, including boosting the Group's position as a supplier of fresh/"refreshed" seafood with a full range of seafood products.

The Group

The Group is financially sound, has shown positive development and currently has a strong position on a number of seafood markets worldwide. The Group's strategy going forward is to continue to grow and further develop within its current operating segments. The Group has and shall continue to have the financial flexibility to support its strategy of further organic growth, carry out strategic acquisitions and sustain the company's dividend policy.

The Group's strong position within the global seafood industry gives grounds for a positive outlook for the Group's future development.

Storebø, 23 August 2017 The Board of Directors of Austevoll Seafood ASA

Chairman of the Board

Board member

Deputy Chairman of the Board

Board member Board member

Board member Board member

CEO

INCOME STATEMENT (unaudited)

(audited)
All figures in NOK 1.000 Note Q2 2017 Q2 2016 H1 2017 H1 2016 2016
Operating revenue 4 5 019 195 4 558 229 11 094 149 8 970 468 18 911 523
Raw material and consumables used 2 398 348 2 648 753 5 547 040 5 239 069 10 522 582
Salaries and personnel expenses 659 309 437 288 1 430 714 926 789 2 229 746
Other operating expenses 639 419 487 269 1 238 931 933 947 2 278 364
Operating profit before depreciation (EBITDA) 1 322 119 984 919 2 877 464 1 870 663 3 880 831
Depreciation and amortisation 232 753 196 846 458 419 388 558 845 126
Impairment -608 -1 521 -1 812 -3 480 122 794
EBIT before fair value biomass adjustment 1 089 974 789 594 2 420 857 1 485 585 2 912 911
Fair value adjustment biomass 3 702 362 -150 187 -318 864 13 641 1 549 449
Operating profit 1 792 336 639 407 2 101 993 1 499 226 4 462 360
Income from associated companies 5 115 929 69 093 266 338 165 462 459 498
Net interest expenses -68 268 -58 381 -142 747 -118 568 -251 644
Net other financial items (incl. agio/disagio) -23 170 8 973 6 903 20 668 12 367
Profit before tax 1 816 827 659 092 2 232 487 1 566 788 4 682 581
Income tax expenses -418 592 -154 933 -490 882 -369 975 -974 607
Net profit 1 398 235 504 159 1 741 605 1 196 813 3 707 974
Profit to non-controlling interest 688 728 285 833 825 166 609 957 2 063 069
Profit to controlling interests 709 507 218 326 916 439 586 856 1 644 905
Earnings per share (EPS) 3,52 1,09 4,54 2,92 8,17
Diluted EPS 3,52 1,09 4,54 2,92 8,17

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

(audited)
All figures in NOK 1.000 Q2 2017 Q2 2016 H1 2017 H1 2016 2016
Net earnings in the period 1 398 235 504 159 1 741 605 1 196 813 3 707 974
Other comprehensive income
Currency translation differences -1 964 -20 008 44 154 -213 716 -224 901
Other comprehensive income from associated companies -54 -2 727
Cash flow hedges 3 885 3 248 5 438 -13 310 38 091
Change in value available for sale financial assets
Others incl. tax effect 2 688 -2 255 3 382 7 051 7 556
Total other comprehensive income 4 555 -19 015 50 247 -219 975 -179 254
Comprehensive income in the period 1 402 790 485 144 1 791 852 976 838 3 528 720
Allocated to;
Minority interests 703 294 218 426 847 444 473 009 1 984 792
Majority interests 699 496 266 718 944 408 503 829 1 543 928

(unaudited) STATEMENT OF FINANCIAL POSITION

(audited)
All figures in NOK 1.000 Note 30.06.2017 30.06.2016 31.12.2016
Assets
Intangible assets 11 726 665 8 049 524 11 746 906
Vessels 2 003 817 905 814 1 992 120
Property, plant and equipment 4 953 401 4 584 406 4 698 944
Investments in associated companies 5 1 861 630 1 602 057 1 710 001
Investments in other shares 33 039 113 902 33 821
Other long-term receivables 164 921 55 997 120 842
Total non-current assets 20 743 473 15 311 700 20 302 634
Inventories 3 7 340 888 5 030 351 7 878 681
Accounts receivable 2 217 879 1 971 350 2 340 495
Other current receivables 800 807 747 151 734 205
Cash and cash equivalents 4 047 521 4 978 807 3 745 388
Total current assets 14 407 095 12 727 659 14 698 769
Total assets 35 150 568 28 039 359 35 001 403
Equity and liabilities
Share capital 6 101 359 101 359 101 359
Own shares -18 312 -35 306 -18 312
Share premium 3 713 549 3 713 549 3 713 549
Retained earnings and other reserves 5 891 469 4 501 788 5 451 621
Non-controlling interests 9 365 009 7 723 386 8 964 603
Total equity 19 053 074 16 004 776 18 212 820
Deferred tax liabilities 3 992 376 2 745 025 3 986 198
Pensions and other obligations 120 965 170 592 146 067
Borrowings 8 022 527 4 973 232 7 065 191
Other long-term liabilities 28 818 24 605 33 927
Total non-current liabilities 12 164 686 7 913 454 11 231 383
Short term borrowings 878 104 1 518 495 1 350 926
Overdraft facilities 287 343 373 504 788 224
Account payable 1 284 390 1 185 630 1 500 089
Other current liabilities 1 482 971 1 043 500 1 917 961
Total current liabilities 3 932 808 4 121 129 5 557 200
Total liabilities 16 097 494 12 034 583 16 788 583
Total equity and liabilities 35 150 568 28 039 359 35 001 403
NIBD 5 169 271 1 911 029 5 492 880
Equity ratio 54 % 57 % 52 %

(unaudited) CONDENSED STATEMENT OF CHANGES IN EQUITY

(audited)
All figures in NOK 1.000 30.06.2017 30.06.2016 31.12.2016
Equity period start 18 212 820 13 610 808 13 610 808
Comprehensive income in the period 1 791 852 976 838 3 528 720
Dividends -950 584 -1 694 645 -1 757 525
Business combinations/acquisition - - 947 016
Transactions with non-controlling interest -1 014 3 111 775 1 883 801
Effect option programme - - -
Other - - -
Total changes in equity in the period 840 254 2 393 968 4 602 012
Equity at period end 19 053 074 16 004 776 18 212 820

CASH FLOW STATEMENT (unaudited)

All figures in NOK 1.000 Q2 2017 Q2 2016 H1 2017 H1 2016 (audited)
2016
Cash flow from operating activities
Profit before income taxes 1 816 826 659 092 2 232 487 1 566 788 4 682 581
Fair value adjustment of biological assets -702 362 150 187 318 864 -13 641 -1 549 449
Taxes paid in the period -351 591 -36 419 -567 323 -216 935 -249 323
Depreciation and amortisation 232 753 196 846 458 419 388 557 845 126
Impairments -608 -1 521 -1 812 -3 480 122 794
Associated companies - net -115 929 -69 093 -266 338 -165 462 -459 498
Interest expense 80 623 68 172 163 523 137 109 297 631
Interest income -12 355 -9 791 -20 776 -18 541 -45 987
Change in inventories -220 939 180 172 218 929 523 204 -241 520
Change in receivables -12 300 -204 729 56 015 -442 428 -492 985
Change in payables -170 984 50 509 -185 177 181 555 391 699
Other operating cash flow incl currency exchange -273 791 49 087 -406 099 -114 358 -51 984
Net cash flow from operating activities 269 343 1 032 512 2 000 712 1 822 368 3 249 085
Cash flow from investing activities
Purchase of intangible and fixed assets -469 720 -273 200 -734 110 -431 193 -1 142 494
Purchase of shares and equity investments -77 170 -80 475 -77 170 -108 968 -3 419 408
Proceeds from sale of fixed assets/equity investments 35 410 132 149 66 630 1 119 589 110 484
Cash inflow from business combinations - - - - 288 311
Dividend received 210 000 227 000 210 000 227 000 278 800
Interest income 12 355 9 791 20 776 18 541 45 987
Other investing activities - net -22 265 6 755 -45 302 3 008 -11 193
Net cash flow from investing activities -311 390 22 020 -559 176 827 977 -3 849 513
Cash flow from financing activities
Proceeds from new long term debt 791 239 359 291 1 300 576 1 048 370 2 866 555
Repayment of long term debt -229 694 -405 825 -810 964 -896 839 -1 946 937
Change in short term debt 127 951 -76 264 -495 044 -504 437 -176 746
Interest paid -80 972 -69 793 -178 638 -142 502 -313 517
Dividends paid -947 005 -1 694 645 -950 584 -1 694 645 -1 695 079
Other finance cash flow - net - 2 051 656 2 051 656 3 143 219
Net cash flow from financing activities -338 481 164 420 -1 134 654 -138 397 1 877 495
Net change in cash and cash equivalents -380 528 1 218 952 306 882 2 511 948 1 277 067
Cash, and cash equivalents at start of period 4 431 625 3 752 486 3 745 198 2 470 222 2 470 222
Exchange gains/losses (-) -3 783 7 209 -4 766 -3 523 -2 091
Cash and cash equivalents at period end 4 047 314 4 978 647 4 047 314 4 978 647 3 745 198

NOTE 1 ACCOUNTING POLICIES

This interim report has been prepared in accordance with International Financial Reporting Standards (IFRS) and the related standard for interim financial reporting (IAS 34). The interim financial statements, including historical comparative amounts, are based on current IFRS standards and interpretations. Changes in the standards and interpretations may result in changes to the result. The interim report has been prepared in accordance with the same policies applied to the most recent annual report, but does not contain all the information and notes required for an annual report. This report must therefore be read in the context of the company's most recent annual report (2016).

NOTE 2 RELATED PARTY TRANSACTIONS

There were related party transactions in Q2 2017. Related party transactions take place on market terms, and the relevant types of transactions are described in more detail in the Annual Report 2016.

NOTE 3 BIOLOGICAL ASSETS

The Group recognises and measures biological assets at fair value according to IAS 41 and IFRS 13. For roe, fry, smolt and cleaner fish, historical cost is assumed to be the best estimate of fair value. For salmon and trout, including parent fish, a present value model is applied to estimate fair value.

The value of fish in the sea is estimated as a function of the estimated biomass at the time of release from stock, multiplied by the estimated sales price. For fish not ready for harvest, a deduction is made to cover estimated residual costs to grow the fish to harvest weight. The cash flow is discounted monthly by a discount rate. The discount rate comprises three main components: (1) the risk of incidents that have an effect on cash flow, (2) hypothetical licence lease and (3) the time value of money.

Estimated biomass (volume) is based on the actual number of individuals in the sea on the date of the statement of financial position, adjusted to cover projected mortality up to harvest time and multiplied by the estimated harvest weight per individual at harvest time. The measurement unit is the individual fish. However, for practical reasons, these estimates are carried out individually per locality. The live weight of fish in the sea is translated to gutted weight in order to arrive at the same measurement unit as for pricing.

Pricing is based on the Fish Pool forward prices. The forward price for the month in which the fish is expected to be harvested is applied in order to estimate cash flow. The price stipulated by Fish Pool is adjusted to take into account export costs and clearing costs, and represents the reference price. This price is then adjusted to account for estimated harvesting cost (well boat, slaughter and boxing) and transport to Oslo. Adjustments are also made for any projected differences in size and quality. The adjustments to the reference price are made individually per locality. Joint regional parameters are applied, unless factors specific to an individual locality require otherwise.

Valuation and classification are based on the principle of highest and best use according to IFRS 13. The actual market price per kilo may vary in relation to fish weight. When estimating fair value, the optimal harvest weight, i.e. the weight when the fish is ready for harvest, is defined as the live weight that results in a gutted weight of 4 kg. This corresponds to a live weight of 4.8 kg. The optimal harvest weight may, however, be lowered slightly if required by factors at an individual locality (biological challenges etc.). In terms of valuation, only fish that have achieved a live weight greater than 4.8 kg are classified as ready for harvest.

The Group enters into contracts related to future deliveries of salmon and trout. As biological assets are recognised at fair value, the fair value adjustment of the biological assets will be included in the estimated expenses required to fulfil the contract. This implies that the Group may experience loss-making (onerous) contracts according to IAS 37 even if the contract price for physical delivery contracts is higher than the actual production cost for the products. In such a scenario, a provision is made for the estimated negative value. The provision is classified in the financial statements as other short-term debt.

The fair value adjustment recognised in the income statement for the period related to biological assets comprises (1) fair value adjustment related to biological assets, (2) change in fair value (provision) related to onerous contracts and (3) change in unrealised gain/loss related to financial sale and purchase contracts (derivatives) for fish in Fish Pool. Fish Pool contracts are treated as financial instruments on the balance sheet, where unrealised gain is recognised as other current receivables and unrealised loss as other current debt.

NOTE 3 BIOLOGICAL ASSETS (cont.)

Conversion to live weight:

The figures for harvested volume and growth in the tables below have been estimated on the basis of gutted weight (GWT) and converted to live weight (LWT). The gutting loss ratio for salmon and trout applied in this conversion is 16%. The table for Lerøy Seafood Group ASA includes salmon and trout. The table for Br. Birkeland AS only includes salmon.

LWT = live weight measured in tonnes

GWT = gutted weight measured in tonnes

Lerøy Seafood Group ASA

FAIR VALUE ADJUSTMENTS RELATED TO BIOLOGICAL ASSETS

Fair value adjustments over profit and loss Q2 2017 Q2 2016 2016
Change fair value adj. biolocigal assets 697 418 -148 621 1 730 028
Change in onerous contracts, biological assets 17 170 - -284 381
Change in fair value on fishpool contracts -5 108 1 157 24 914
Total FV adj. related to biological assets 709 480 -147 464 1 470 561
Fair value adjustments over profit and loss YTD 2017 YTD 2016
Change fair value adj. biolocigal assets -435 862 25 591
Change in onerous contracts, biological assets 203 415 -
Change in fair value on fishpool contracts -17 241 -1 545
Total FV adj. related to biological assets -249 688 24 045

BALANCE SHEET ITEMS RELATED TO BIOLOGICAL ASSETS

Positive amounts are assets and negative amounts are liabilities

Carrying amount on biological assets 30.06.2017 30.06.2016 31.12.2016
Cost on stock for fish in sea 3 347 426 2 693 042 3 433 980
Cost on stock for fry, brood, smolt and cleaning fish 179 716 277 472 283 234
Total cost on stock for biological assets * 3 527 142 2 970 514 3 717 214
Fair value adj. on fish in sea 2 265 236 996 661 2 701 099
Fair value adj. on fry, brood, smolt and cleaning fish - - -
Total fair value adj. on biological assets 2 265 236 996 661 2 701 099
Fair value on fish in sea 5 612 663 3 689 703 6 135 079
Fair value on fry, brood, smolt and cleaning fish 179 716 277 472 283 234
Carrying amount of biological assets 5 792 379 3 967 174 6 418 313
Carrying amount on onerous contracts (liability)
Carrying amount of onerous contracts -80 966 - -284 381
Carrying amount on fishpool contracts
Carrying amount of fishpool contracts 8 320 -1 545 24 914
* Cost on stock is historic costs after expensed mortality
HARVESTED VOLUME
Volume in gutted weight (GWT) Q2 2017 Q2 2016 H1 2017 H1 2016 2016
Salmon 22 268 30 771 60 241 60 577 114 939
Trout 3 888 10 361 9 222 18 718 35 243
Total harvested volume 26 156 41 132 69 463 79 295 150 182

NOTE 3 BIOLOGICAL ASSETS (cont.)

Lerøy Seafood Group ASA (forts.)

VOLUME

Volume of fish in sea (LWT) Q2 2017 Q2 2016 30.06.2017 30.06.2016 31.12.2016
Volume at beginning of period 89 181 96 097 108 413 108 270 108 270
Net growht during the period 38 215 34 569 70 539 67 829 178 931
Harvested volume during the period -31 138 -48 966 -82 694 -94 399 -178 788
Volume at end of period (LWT) 96 258 81 700 96 258 81 700 108 413
30.06.2017 30.06.2016 31.12.2016
82 553 64 328 94 644
13 705 17 372 13 769
96 258 81 700 108 413
5 132 8 858 15 786

Br. Birkeland AS

FAIR VALUE ADJUSTMENTS RELATED TO BIOLOGICAL ASSETS

Fair value adjustment over profit and loss Q2 2017 Q2 2016 H1 2017 H1 2016 2016
Change FV adj. biological assets -7 118 -2 723 -69 176 -10 404 78 888
FV adj. related to biological assets -7 118 -2 723 -69 176 -10 404 78 888

BALANCE SHEET ITEMS RELATED TO BIOLOGICAL ASSETS

Positive amounts are assets and negative amounts are liabilities

Carrying amount of biological assets H1 2017 H1 2016 2016
Fish in sea at historic cost 106 269 169 879 176 748
Fair value adjustment fish in sea 90 894 70 778 160 070
Fair value fish in sea 197 163 240 657 336 818
Fry, brood and smolt - - -
Carrying amount of biological assets 197 163 240 657 336 818

HARVESTED VOLUME

Harvested volume in gutted weight (GWT) Q2 2017 Q2 2016 H1 2017 H1 2016 2016
Total volume 3 685 2 341 4 802 4 059 8 093
Salmon 3 685 2 341 4 802 4 059 8 093

VOLUME

Volume of fish in sea (LWT) Q2 2017 Q2 2016 H1 2017 H1 2016 2016
Volume at beginning of period 5 631 5 357 5 688 5 755 5 755
Net growht during the period 1 910 2 099 3 202 3 792 9 636
Harvested volume during the period -4 534 -2 669 -5 883 -4 763 -9 703
Volume at end of period (LWT) 3 007 4 787 3 007 4 784 5 688
Fish > 4,8 kg (live weight) - - - - -

NOTE 4 SEGMENTS

Pelagia AS
All figures in Lerøy
Seafood
Austral
Group
Foodcorp
Chile
Br.
Birkeland
Other/ (50% of
figures and
Total Group
incl. Pelagia
NOK 1.000 Group ASA S.A.A S.A AS eliminations Total Group volumes) AS (50%)
Q2 2017
Operating revenue 4 232 407 489 319 162 853 304 711 -170 095 5 019 195 596 142 5 615 337
EBITDA 947 686 181 102 71 045 117 923 4 363 1 322 119 46 848 1 368 967
EBITDA% 22 % 37 % 44 % 39 % 26 % 8 % 24 %
EBIT ex. Impairment 800 716 133 018 61 786 94 501 -655 1 089 366 25 111 1 114 477
EBIT 800 716 134 035 61 377 94 501 -655 1 089 974 24 588 1 114 562
Volumes sold:
Salmon (gwt tonnes) 26 156 3 685 29 841 29 841
Fishmeal/oil/FPC (tonnes) 35 092 5 212 40 304 24 483 64 787
Frozen fish (tonnes) 5 012 9 432 14 444 23 138 37 582
Q2 2016
Operating revenue 4 261 897 54 964 151 000 210 425 -120 057 4 558 229 532 911 5 091 140
EBITDA 875 633 -28 093 21 685 104 594 11 100 984 919 60 124 1 045 043
EBITDA% 21 % -51 % 14 % 50 % 22 % 11 % 21 %
EBIT ex. Impairment 760 443 -71 619 5 608 87 939 5 702 788 073 39 910 827 983
EBIT 760 443 -70 097 5 608 87 939 5 701 789 594 39 910 829 504
Volumes sold:
Salmon (gwt tonnes) 41 132 2 341 43 473 43 473
Fishmeal/oil/FPC (tonnes) 2 352 5 590 7 942 19 300 27 242
Frozen fish (tonnes) 27 6 727 6 754 20 178 26 932
H1 2017
Operating revenue 9 692 024 923 329 260 923 428 531 -210 658 11 094 149 1 282 223 12 376 372
EBITDA 2 371 150 268 636 80 861 148 354 8 463 2 877 464 128 469 3 005 933
EBITDA% 24 % 29 % 31 % 35 % 26 % 10 % 24 %
EBIT ex. Impairment 2 078 064 173 242 62 465 106 893 -1 619 2 419 045 86 399 2 505 444
EBIT 2 078 064 175 463 62 056 106 893 -1 619 2 420 857 91 969 2 512 826
Volumes sold:
Salmon (gwt tonnes) 69 463 4 802 74 265 74 265
Fishmeal/oil/FPC (tonnes) 67 651 8 524 76 175 40 880 117 055
Frozen fish/fresh (tonnes) 8 136 13 699 21 835 55 655 77 490
H1 2016
Operating revenue 8 077 555 476 788 254 636 388 934 -227 445 8 970 468 1 165 376 10 135 844
EBITDA 1 572 988 49 742 41 167 191 443 15 323 1 870 663 123 489 1 994 152
EBITDA% 19 % 10 % 16 % 49 % 21 % 11 % 20 %
EBIT ex. Impairment 1 344 905 -33 999 7 987 158 524 4 688 1 482 105 83 300 1 565 405
EBIT 1 344 905 -30 518 7 987 158 524 4 688 1 485 586 83 300 1 568 886
Volumes sold:
Salmon (gwt tonnes) 79 295 4 059 83 354 83 354
Fishmeal/oil/FPC (tonnes) 30 067 9 151 39 218 32 022 71 240
Frozen fish/fresh (tonnes) 72 10 651 10 723 60 361 71 084

NOTE 4 SEGMENTS (cont.)

All figures in Lerøy
Seafood
Austral
Group
Foodcorp
Chile
Br.
Birkeland
Other/ Pelagia AS
(50% of
figures and
Total Group
incl. Pelagia
NOK 1.000 Group ASA S.A.A S.A AS eliminations Total Group volumes) AS (50%)
2016
Operating revenue 17 269 735 1 020 483 425 333 789 702 -593 730 18 911 523 2 879 204 21 790 727
EBITDA 3 355 089 140 105 31 135 344 541 9 961 3 880 831 314 098 4 194 929
EBITDA% 19 % 14 % 7 % 44 % 21 % 11 % 19 %
EBIT ex. Impairment 2 843 469 -35 189 -37 797 277 279 -12 057 3 035 705 232 110 3 267 815
EBIT 2 843 469 -8 819 -186 961 277 279 -12 057 2 912 911 232 110 3 145 021
Volumes sold:
Salmon (gwt tonnes) 150 182 8 093 158 275 158 275
Fishmeal/oil/FPC (tonnes) 62 125 13 219 75 344 77 850 153 194
Frozen fish (tonnes) 7 788 21 869 29 657 132 300 161 957

NOTE 5 ASSOCIATES

Q2 2017 Q2 2016 H1 2017 H1 2016 2 016
Norskott Havbruk AS 50.0% 100 498 35 470 193 049 93 847 238 804
Pelagia AS 50.0% 5 082 28 436 56 344 62 958 193 415
Others 10 349 5 187 16 945 8 657 27 279
Total income from ass.companies 115 929 69 093 266 338 165 462 459 498
Total investment 1 861 629 1 602 057 1 710 001

NOTE 6 LIST OF THE 20 LARGEST SHAREHOLDERS AS AT 30 JUNE 2017

Investor Number of shares % of top 20 % of total
LACO AS 112 605 876 77.63 55.55
STATE STREET BANK AN A/C CLIENT FUND NUMB 5 690 563 3.92 2.81
STATE STREET BANK AN A/C CLIENT OMNIBUS D 2 620 100 1.81 1.29
STATE STREET BANK AN A/C CLIENT OMNIBUS F 2 588 694 1.78 1.28
PARETO AKSJE NORGE 2 549 842 1.76 1.26
DANSKE INVEST NORSKE C/O DANSKE CAPITAL A 2 066 429 1.42 1.02
FOLKETRYGDFONDET 1 938 691 1.34 0.96
MITSUI AND CO., LTD 1 782 236 1.23 0.88
OM HOLDING AS 1 781 850 1.23 0.88
THE NORTHERN TRUST C USL NON-TREATY ACCOUNT 1 462 778 1.01 0.72
MP PENSJON PK 1 136 091 0.78 0.56
JPMORGAN CHASE BANK, JPMCB RE HB SWED FUN 1 091 416 0.75 0.54
CITIBANK, N.A. S/A DFA-INTL SML CAP 1 064 981 0.73 0.53
MSIP EQUITY MORGAN STANLEY & CO. 1 051 359 0.72 0.52
DANSKE INVEST NORSKE 1 042 824 0.72 0.51
J.P. MORGAN BANK LUX JPML SA RE CLT ASSET 1 008 831 0.70 0.50
PARETO AS 921 000 0.63 0.45
JPMORGAN CHASE BANK, A/C VANGUARD BBH LEN 919 682 0.63 0.45
AUSTEVOLL SEAFOOD ASA 893 300 0.62 0.44
CLEARSTREAM BANKING 839 086 0.58 0.41
Total number owned by top 20 145 055 629 100 % 71.56 %
Total number of shares 202 717 374 100 %

DECLARATION OF THE BOARD OF DIRECTORS AND CEO

We declare that, to the best of our knowledge, the half-yearly accounts for the period 1 January to 30 June 2017 have been prepared in accordance with IAS 34 – Interim Financial Reporting, and that the information in the accounts provides a correct illustration of the Group's assets, liabilities, financial position and result as a whole. We also declare that, to the best of our knowledge, the half-yearly report provides a correct overview of significant events during the accounting period and their impact on the half-yearly accounts, the most central risks and uncertainties faced by the Group during the next accounting period and of significant transactions with related parties.

Storebø, 23 August 2017 The Board of Directors of Austevoll Seafood ASA

Chairman of the Board

Board member

Deputy Chairman of the Board

Board member Board member

Board member Board member

CEO

www.auss.no

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