AKVA Group — Earnings Release 2016

Feb 22, 2017

AKVA group ASA: 4Q 2016 financial reporting

AKVA group ASA: 4Q 2016 financial reporting

High market activity - growth strategy continues

AKVA group completed fourth quarter with record high sales and order intake. The

revenue in fourth quarter of 2016 ended on 449 MNOK (344 MNOK) with an EBITDA of

24 MNOK (27 MNOK). Fourth quarter EBITDA margin was 5.3% (7.9%). EBITDA in the

quarter hampered by material restructuring cost of 19.9 MNOK related to AKVA

group Denmark.

AKVA group is ending the quarter with an order backlog of approximately 1 BNOK.

The growth strategy in AKVA group continues with the acquisition of Sperre AS, a

leading ROV and subsea provider to the aquaculture industry and investments in

increased capacity in Helgeland Plast AS.

Cage Based Technology (CBT)

The cage based segment in the Nordic region had an increase in revenues of 72%

YoY. EBITDA was up from 10.3 MNOK in Q4 2015 to 26.9 MNOK in Q4 2016. All

entities are contributing well. The Farming Services operations is increasing

and strengthening the Group.

We saw increased activity in Chile in Q4 and they deliver a positive EBITDA of

1.8 MNOK after several poor quarters. Q4 in Canada was slow as regards to new

sales, but the area continue to deliver good margins. Australia remain a small,

but profitable operation.

In Scotland the OPEX based revenue and service sales performed very well and

offset a more quiet project market. The Turkish operation continued to improve

and quarterly financial performance were good. We continue to see increased

activity in the Sea Bass and Sea Bream industry in the Mediterranean and the

outlook for 2017 is positive. Export to emerging markets have mainly deliveries

to Iran in Q4. Emerging markets are dominated by a few but large contracts and

this will continue to give variations in the P&L quarter by quarter.

Software (SW)

AKVA group Software has stable performance YoY. Wise Ehf experience somewhat

lower margins due to accelerating salary costs in Iceland.Overall, the software

segment had improved performance year on year, with higher topline and stable

margins. The Software segment has ongoing investments in new product modules

expected to strengthen the financial performance of the SW segment going

forward.

Land Based Technology (LBT)

The land based segment with Aquatec Solutions and Plastsveis performed very well

with good margins and ending the year with a high order backlog. However,

restructuring costs and one-off expenses relating to AKVA group Denmark reduced

the overall EBITDA for the segment by 19.9 MNOK in Q4. The EBITDA was also

offset by a 4 MNOK earn-out to former shareholders of Aquatec Solutions. The

land based segment ended the quarter with a strong order backlog, representing

41% of the total backlog for the Group at end of 2016.

Order Backlog

We have experienced continued good market activity throughout the fourth quarter

of 2016. The order intake in Q4 2016 was 561 MNOK (350 MNOK). The order backlog

at the end of Q4 2016 was 998 MNOK (649 MNOK). This is the highest order backlog

ever for AKVA group.

Balance sheet

The balance sheet is strong and we had a strong operational cash flow in Q4.

Working capital as a percentage of 12 months rolling revenue is 2.2% (8.8%). We

are able to maintain a very low working capital despite record high activity.

Cash and unused credit facilities amounted to 256 MNOK at the end of Q4 (160

MNOK).Total assets and total equity amounted to 1,307 MNOK (1,083 MNOK) and 452

MNOK (428 MNOK) respectively, resulting in an equity ratio of 35% (40%) at the

end of Q4.

Acquisition of Sperre AS - the leading ROV provider

Sperre AS will be the "center of excellence" in AKVA group in terms of ROV

technologies as well as relevant subsea technologies. AKVA group ASA acquired

66% of the shares in Sperre AS. The closing of the transaction took place on

November 4th, 2016. The enterprice value on a 100% basis was NOK 126.9 million

for Sperre AS. The Minority Shareholder has an option to sell to AKVA, and AKVA

has an option to purchase from the Minority Shareholder the remaining 34% of the

shares after three years, where the pricing is based on financial performance in

the three-year period. The acquisition was paid in cash and was financed with a

loan from Danske Bank.

Atlantis Subsea Farming AS

In partnership with the companies Sinkaberg-Hansen AS and Egersund Net AS, AKVA

group ASA established the company Atlantis Subsea Farming AS on February

1st, 2016 with the purpose of developing submersible fish-farming facilities for

salmon on an industrial scale.  Atlantis Subsea Farming AS has applied for six

development licenses to enable large-scale development and testing of the new

technology and operational concept.

On November 26th The Norwegian Directorate of Fisheries informed Atlantis Subsea

Farming that the concept for submersible farms fell within the general scope of

the scheme for awarding development fish-farming licenses, and that the

Directorate will continue on to consider the concept further with an objective

to award one or more licenses.

Atlantis Subsea Farming AS has engaged in a process with the Directorate to

provide additional information, including target financial criteria for the

concept.

Dividend

A dividend of NOK 0.50 per share will be paid out in Q1 2017. Total dividend pay

out  in Q1 2017 will be 12.9 MNOK. The dividend is in accordance to AKVA group's

current  dividend policy. For  further details on  dividend please read the full

fourth quarter report and/or a separate stock notice regarding dividend.

Outlook

Biological conditions remains challenging for core customers and thus focus on

solutions to improve productivity and efficiency. At the same time customers

experience record earnings and cash flow. We see this being reflected in high

activity level in the Nordic cage based segment.

We expect increased activity in UK and Chile in 2017 and a solid recovery

compared to 2016. In Canada we are facing somewhat increased competition in the

market and we have moderate expectations for the development in 2017. The

activity in the Mediterranean represents an upside potential and we will focus

our resources in this region over the next quarters.

The land based segment is growing in AKVA group with very high activity level. A

key for AKVA group is to be selective and focus on project execution.

Service and after sales in the Nordic region has potential for further

improvements and we will put additional focus on this going forward. There is

also an untapped potential for the current core business, particularly within

sourcing and supply chain.

About AKVA group

AKVA group is a technology and service partner to the aquaculture industry

worldwide. The company has 792 employees, offices in 8 countries and a total

turnover of NOK 1.6 billion in 2016. We are a public listed company operating in

one of the world's fastest growing industries and supply everything from single

components to complete installations, both for cage farming and land based

aquaculture. AKVA group is recognized as a pioneer and technology leader through

more than 30 years. The

Corporate Headquarter is in Bryne Norway.

Dated: 22 February 2017

AKVA group ASA

Web: www.akvagroup.com

CONTACTS:

Hallvard Muri Chief Executive Officer

Phone: +47 51 77 85 00

Mobile: +47 91 58 07 50

E-mail: hmuri@akvagroup.com

Andreas Pierre Hatjoullis Chief Financial Officer

Phone: +47 51 77 85 00

Mobile: +47 92 69 99 33

E-mail: aphatjoullis@akvagroup.com