Bakkafrost P/f

Earnings Release • May 19, 2025

Strong biological performance - weaker prices

Strong biological performance - weaker prices

The Bakkafrost Group delivered a total operational EBIT of DKK 505 million (DKK

710 million) in Q1 2025.

(Figures in parenthesis refer to the same period last year unless otherwise

specified)

The performance in Q1 2025 per region was as follows:

· Faroe Islands             Revenues of DKK 1,403 million (1,594 million)

Operational EBIT of DKK 435 million (671

million)

· Scotland                    Revenues of DKK 496 million (612 million)

Operational EBIT of DKK 71 million (39

million)

Commenting on the result, CEO Regin Jacobsen said:

"Overall, we are satisfied with the results in this quarter. Our Faroese

freshwater and marine operations delivered another quarter of strong biological

performance, reflecting robust growth, effective sea lice management, and

consistent harvesting of large, high-quality fish. The freshwater segment

continues to excel, further improving our production efficiency with high

-quality, large smolt, which positively impacts costs.

In Scotland, our strategic focus remains firmly on the successful transition to

large, high-quality smolt at Applecross. We are steadily progressing in scaling

up this production, which remains central to fundamentally transforming our

Scottish farming operations and enhancing long-term sustainability and

profitability.

The supply of whole salmon from Norway increased 38% in the quarter. This caused

a significant drop in salmon prices during the first quarter. The Applecross and

Skálavík hatcheries and the Havsbrún feed factory expansion are progressing

according to plan. These projects remain critical to achieving our strategic

objectives."

During Q1 2025, the FOF segment sourced 109,502 tonnes (136,874 tonnes) of raw

material. The Operational EBIT margin was 13% (24%), and fish feed sales

amounted to 31,338 tonnes (27,046 tonnes).

In Q1 2025, the Freshwater segments in the Faroe Islands and Scotland

transferred a total of 3.8 million (3.7 million) smolts combined:

.                       Freshwater FO: 3.2 million (2.1 million),

.                       Freshwater SCT: 0.6 million (1.6 million).

In Q1 2025, the Freshwater FO segment made an operational EBIT per kg

transferred smolt of DKK 42.11 (DKK 25.06), corresponding to NOK 65.75 (NOK

38.36). The Freshwater SCT segment made an operational EBIT per kg transferred

smolt of DKK 12.33 (DKK -178.98), corresponding to NOK 19.26 (NOK -274.00).

The Farming segments achieved lower prices in Q1 2025 than in Q1 2024. The

Farming segments had higher volumes in Q1 2025 compared to Q1 2024. In Q1 2025,

the Farming SCT segment had incident-based costs of DKK 8 million (DKK 18

million).

The total combined harvest in Q1 2025 of the farming segments in the Faroe

Islands and Scotland was 25,200 tonnes gutted weight (21,557 tgw):

.                       Farming FO:    18,914 tgw (14,294 tgw),

.                       Farming SCT:   6,286 tgw (7,263 tgw).

In Q1 2025, the Farming FO segment made an operational EBIT per kg of DKK 15.15

(DKK 33.03), corresponding to NOK 23.65 (NOK 50.56). The Farming SCT segment

made an operational EBIT per kg of DKK 2.53 (DKK 3.35), corresponding to NOK

3.95 (NOK 5.13).

The Services segment made an operational EBIT per kg of DKK 1.51 (DKK 1.22),

corresponding to NOK 2.35 (NOK 1.87). The operational EBIT margin for the

segment was 17% (10%).

The Sales & Other segment had a revenue of DKK 2,962 million (2,850 million) and

an operational EBIT margin of -1% (0%). The operational EBIT per kg was DKK 1.65

(DKK -0.11), corresponding to NOK 2.57 (NOK -0.16).

The performance related to the Faroe Islands and Scotland as a region can be

found in the Appendix.

The long-term goal of the Board of Directors is that 30-50% of earnings per

share shall be paid out as a dividend. Bakkafrost's financial position is

strong, with a solid balance sheet, a competitive operation, and available

credit facilities.

The Annual General Meeting convened on April 30 2025, decided to pay out a

dividend of DKK 8.44 (NOK 13.37) per share. The total dividend of DKK 501

million (NOK 781 million) will be paid out on or around May 21 2025.

OUTLOOK AND OPERATIONAL PERFORMANCE

Market

Supply increased in Q1 2025

The supply of salmon increased 5.3% in Q1 2025 compared to Q1 2024, incl.

inventory movements. Without inventory movements, the supply increase was 8.4%,

according to the latest estimate from Kontali Analyse.

Lower salmon prices in Q1 2025

Salmon reference prices (in NOK) for 4-5kg superior salmon were 18.1% lower this

quarter compared to Q1 2024. The price reduction was largely driven by increased

supply resulting from improved biology in Norway. Most of the other producing

regions contributed to the supply growth, except Canada.

6-7% growth in 2025

The global supply is expected to increase around 7% in H1 2025. In H2 2025, the

global supply is expected to grow around 6%, compared to H2 2024. For the full

year 2025, the global supply is expected grow around 6-7%.

Overall, the salmon market has been affected by larger than expected supply.

Improved biology in Norway has also led to lower share of production fish being

sold to the market. These factors impacted the market dynamics in the quarter

leading to lower salmon prices, compared to previous years.

Bakkafrost has a strong focus on ensuring a well-balanced flow to the different

markets to increase diversification and mitigate market risk. Bakkafrost

operates in the main salmon markets, Europe, the USA, and the Far East. Since

the beginning of the war in Ukraine, Bakkafrost has stopped all trading with

Russia.

Farming

The biological performance in Q1 2025 in the Faroese farming operation continued

showing strong performance. Harvest weights have been high and sea lice levels

well under control. Feeding, growth and survivability rates have all have been

high. These positive trends indicate strong future performance as the fish are

expected to thrive and contribute significantly to the operation's success.

The Faroese freshwater operation is continuing to increase the production volume

of large high-quality smolt. The capacity utilization is expected to continue

growing, leading to increased production volume. The volume is projected to rise

slightly in 2025, with smolt weights a bit higher than in 2024. The current

hatchery capacity in the Faroes allows for an annual smolt production of 9,000

tonnes, equalling 18 million smolt of 500g. This will increase to 24 million

smolt of 500g when the ongoing construction of the new hatchery in Skálavík will

be finished late 2026. The construction of the hatchery progresses according to

plan.

In Q1 2025, the average weight of transferred smolt in the Faroe Islands was

421g, which is 10% higher than in 2024.

The farming operation in Scotland has performed strongly in Q1 2025. Mortality

levels are normally lower in the first quarter than the rest of the year. This

has also been the case in this quarter. Overall, the health condition of the

fish has been good. Sea lice levels have been managed well and average harvest

weights have been exceptionally high.

As earlier announced, Bakkafrost is following a de-risking strategy for the

Scottish marine farming in 2025, similar to 2024. Bakkafrost expects to harvest

around 67% of the annual volume in H1 2025 with good average weights. Ahead of

Q3, harvest weights will probably reduce as some sites are emptied to reduce

risk.

During 2025, the biomass at sea will gradually change character, transitioning

to be based on high-quality smolt. This strategic shift is expected to enhance

overall fish health and growth rates, leading to a more robust and sustainable

aquaculture environment.

In the Scottish freshwater operation, the main priority is to ensure a steadily

growing output of large high-quality smolt from Applecross which is currently in

the ramp-up phase to deliver fish above 200g in 2025. This is not a straight

-line development, but a delicate and gradual process involving some level of

risk which reduces as the operation is fine-tuned, and all procedures executed

at least once. Production volume and smolt release will increase throughout the

year and into 2026. With the new Applecross 5 module now in production, the

production capacity is around 3,500 tonnes of smolt annually. This capacity will

be utilised to make Bakkafrost self-sufficient with around 14 million high

-quality smolt of 250g.

Another priority in 2025 is the completion of the Applecross phase 6 and 7,

which will improve the biosecurity in the smolt production and add flexibility.

In Q1 2025, the average weight of transferred smolt from Applecross in Scotland

was 232g, which is 80% higher than in Q1 2024. The average smolt weight for all

of Bakkafrost's smolt release in Scotland in the quarter was 169g, which is 40%

higher than in Q1 2024.

Smolt transfer

Bakkafrost's expected smolt transfer in 2025 in the Faroe Islands is around 18.5

million smolts with an average weight of around 430g. In Scotland, the smolt

transfer in 2025 is expected to be around 10.0 million smolts with an average

weight of above 200g. The number and average weight of smolts transferred are

key elements of predicting Bakkafrost's future production.

Million smolt transferred '25e '24 '23 '22 '21 '20

FO 18.5 17.1 14.2 14.4 14.4 14.7

SCT 10.0 6.0 9.0 11.0 11.1 10.4

Avg. weight (g)

FO 430 410 396 345 376 320

SCT 200 109 117 107 95 88

In 2025, Bakkafrost expects to harvest around 77,000 tonnes gutted weight in the

Faroe Islands and 20,000 tonnes gutted weight in Scotland, giving a total of

around 97,000 tonnes gutted weight. The quarterly harvest profile is outlined in

in the table below. Biological, environmental and market conditions can affect

the expected harvest profile.

Expected harvest profile in 2025 as a % of total harvest pr. region:

Region Q1 Q2 Q3 Q4

FO 25% 19% 29% 27%

SCT 31% 36% 16% 16%

The estimates for harvest volumes and smolt transfers in both geographies are

dependent on biological development.

Sales & VAP (Value added products)

Bakkafrost's highly flexible value chain includes state-of-the-art VAP

processing capacity, which enables the company to adapt effectively to rapidly

changing market situations.

As a result of changes in the Faroese revenue tax, Bakkafrost has adjusted the

strategy for contracted VAP (Value-Added Products) to reduce contract exposure.

For 2025, Bakkafrost intends to sign contracts covering around 15-20% of the

expected harvest volumes in the Faroe Islands and Scotland combined.

FOF (Fishmeal, oil and feed)

The outlook of fishmeal and fish oil production is dependent on the availability

of raw materials.

The ICES 2025 recommendation for blue whiting is 1,447 thousand tonnes, which

represents a -5.4% decrease from the recommendation for 2024.

In 2025 Bakkafrost expects similar production volumes of fishmeal and fish oil

as in 2025.

Bakkafrost expects the feed production at Havsbrún to be around 150,000 tonnes

in 2025. Close to all of this will be sold internally to Bakkafrost's Faroese

and Scottish Farming segments.

Investments

On the Capital Markets Day on 6 June 2023, Bakkafrost announced a 6.3bn DKK

investment plan for 2024-2028. The investrments will enable a transformation of

the operation in Scotland and provide sustainable growth in the Faroe Islands as

well as Scotland.

The main purpose of the investments in Scotland is to replicate Bakkafrost's

successful operation in the Faroe Islands. A part of this is to implement

Bakkafrost's large smolt strategy in Scotland, which is achieved through

building sufficient and energy-efficient hatchery capacity. The 2024-2028

investment plan includes projects to build hatchery capacity to produce above 15

million large smolts annually. Having large smolt in Scotland will transform the

performance, lower the biological risk and increase harvest volumes. In addition

to building hatchery capacity, Bakkafrost plans to strengthen the processing

capabilities and increase flexibility in operation. Bakkafrost will also invest

in more service vessel capacity to improve the mitigation of biological risk and

improve the cost of operation. Further, Bakkafrost will make investments in

marine site development.

The investments in the Faroe Islands include increasing annual hatchery

production capacity to around 24 million smolts at 500g, cost-efficient

repurposing of old hatcheries into broodstock operation, expansion of feed

production capacity and obtaining growth through optimization of existing sites

and new technology.

With the investment plan, Bakkafrost expects to sustainably grow the total

annual harvest volumes to 165,000 tonnes in 2028. Over the same period, the

total annual production capacity in Bakkafrost's value chain will reach 200,000

tonnes gutted weight.

Update on the 2024-2028 investment plan

Since the announcement of the 2024-2028 investment plan, Bakkafrost has decided

to change the priority of some of the investment projects in Scotland, including

the second planned hatchery at Fairlie and new processing facility.

Consequently, the capex spend in 2024 and 2025 is expected to reduce around 800

mDKK in total, compared to the investment levels announced in the 2024-2028

investment plan.

Bakkafrost will host the next Capital Markets Day on 16-17 June 2025 in the

Faroe Islands.

Financial

The global salmon product market's long-term balance is likely to favour

Bakkafrost. Bakkafrost has a long value chain and a cost-efficient production of

high-quality salmon products and will likely maintain financial flexibility

going forward.

In March 2022, Bakkafrost secured a 700 mEUR sustainability-linked credit

facility (expandable by 150 mEUR) with a 5-year term and 2-year extension

options which have been executed. This facility, along with Bakkafrost's strong

equity ratio, bolsters the Group's financial strength for organic growth and

cost reduction in Scotland, while also facilitating M&A and future organic

growth opportunities, and upholding an unchanged dividend policy.

Please find the Company's Q1 2025 report and the Q1 2025 presentation enclosed.

Contacts:

· Regin Jacobsen, CEO of P/F Bakkafrost: +298 235001 (mobile)

· Høgni Dahl Jakobsen, CFO of P/F Bakkafrost: +298 235060 (mobile)

This information is subject of the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.

About Bakkafrost:

Bakkafrost is the largest salmon farmer in the Faroe Islands and the second

-largest salmon farmer in Scotland. The Group is fully integrated from feed

production to smolt, farming, VAP and sales. The Group has production of

fishmeal, fish oil and salmon feed in the Faroe Islands and primary and

secondary processing in the Faroe Islands, Scotland and Denmark. The Group

operates sea farming and broodstock operations in both the Faroe Islands and

Scotland. The Group has built a biogas plant in the Faroe Islands. The

headquarter is located in the Faroe Islands, and the Group has sales and

administration offices in Grimsby (UK), Edinburgh (Scotland), Boulogne-Sur-Mer

(France), New Jersey (US) and Munkebo (DK). The Bakkafrost Group has 1,686

employees (full-time equivalents).

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