Andfjord Salmon

Earnings Release • Dec 1, 2020

Andfjord Salmon to fast-track construction plans | Q3 2020 financial results

Andfjord Salmon to fast-track construction plans | Q3 2020 financial results

1 December 2020 – Andfjord Salmon AS (ANDF-ME) announces plans to fast-track the development of the next phase of its land-based salmon farming facility at Kvalnes, Andøya, and releases the company’s third quarter 2020 financial results.

Andfjord Salmon is currently finalising the construction of its first 1,000 tonnes maximum allowed biomass (MAB) capacity pool at Kvalnes, Andøya. However, the company has today initiated a process to raise proceeds to finance an opportunity to fast-track a parallel development of Kvalnes Phase 2, with the ambition of expanding the capacity from 1,000 to 10,000 tonnes MAB, equivalent to a target production volume of 12,500 tonnes HOG.

“We are delighted to announce plans to fast-track the construction work at Kvalnes Phase 2. Put simply, we are moving from a sequential development at Kvalnes to a parallel development of the full Kvalnes area. This will reduce both overall project execution risk for the area development and biological risk for the start pool,” says Martin Rasmussen, CEO of Andfjord Salmon.

In August, Andfjord Salmon announced that it would release the smolt in the first 1,000 tonnes MAB pool during spring 2021 in order to secure optimal biological growth conditions for the smolt. Since then, and in parallel with constructing the first pool, Andfjord Salmon has worked to identify ways to fast-track the development of the remaining 9,000 tonnes MAB capacity pools at Kvalnes.

By commencing the parallel development, Andfjord Salmon anticipates biological and time saving benefits, in addition to a significant de-risking of the Kvalnes expansion. Further, initiating the parallel development results in saved expenses related to de-mobilization and mobilization of required machinery, and does not otherwise affect total capex.

The company has already negotiated an agreement with a contractor for the Kvalnes Phase 2 blasting and excavation work, which will now be brought forward by six months.

“Fast-tracking the full Kvalnes development is first and foremost a risk-reducing measure, both when it comes to project execution, operations and biology. It will contribute towards a much smoother journey towards 10,000 tonnes MAB,” says Martin Rasmussen.

To allow for completion of blasting and excavation work at the other pools at Kvalnes, first smolt will be released in the first pool late spring/summer 2021. Work on finalising the first pool will continue as planned, but with some variations to take into account the larger area workscope that will now be initiated.

The work on the first pool has progressed well throughout the autumn. The final section of the pool wall is planned to be installed tomorrow, while the water inlet and outlet pipelines are ready to be installed at the next available weather window.

“We are very satisfied with the progress on the first pool, which is nearing completion. Another positive effect of our larger Kvalnes area development is that we get more time to test the first pool, which helps to further de-risk our technology,” says Martin Rasmussen.

In the third quarter 2020, Andfjord Salmon, which is currently building up its first land-based salmon farming facility, had zero revenues compared to zero revenues in the same quarter last year. The company’s operating profit in this year’s third quarter was negative NOK 12.5 million versus negative NOK 5.4 million last year. Cash and deposits at the end of the third quarter 2020 was NOK 126.8 million. The latter figure does not include a NOK 50 million undrawn credit facility with Sparebank 1 Nord-Norge and Innovation Norway. In addition, NOK 15 million in grants, from Innovation Norway (NOK 14 million) and Samskap (NOK 1 million) are not included.

Andfjord Salmon has developed a patented, innovative, and sustainable aquaculture concept for land-based farming of Atlantic salmon. The company’s facility is escape-proof, lice-free and its innovative multi cleaning system prevents polluting marine life.

Located at Kvalnes on the island Andøya on the Arctic Archipelago of Vesterålen, Norway, Andfjord Salmon’s first facility is currently under construction. The company holds a license for 10,000 tonnes MAB for land-based farming of Atlantic salmon and has secured rights to land for a potential expansion of an additional 60,000 tonnes MAB capacity (together with Kvalnes 1 a total of 70,000 tonnes MAB), equivalent to a total production volume capacity of approximately 90,000 tonnes (HOG).

The presentation material for tomorrow’s Q3 2020 financial results presentation, to be held at 08:00 CET, is enclosed to this announcement. The webcast presentation can be followed from this link: https://channel.royalcast.com/landingpage/hegnarmedia/20201202_4/

ENDS

For more information, please contact:

Media:

Martin Rasmussen, CEO, tel: +47 975 08 665, e-mail: martin@andfjord.no

Investors:

Helge Krøgenes, director of financing and business development, +47 930 96 109, e-mail: helge@andfjord.no

About Andfjord Salmon™

Andfjord Salmon™ has developed an innovative and sustainable aquaculture concept for shore-based farming of Atlantic salmon. The company’s ambition is to build the world’s most sustainable aquaculture facility of its kind. The facility is escape-proof, lice-free and its highly filtered effluent avoids polluting marine life. Additionally, the facility will be partly powered by the use of solar panels and wind turbines.

Located at Kvalnes on the island Andøya on the Arctic archipelago of Vesterålen, Norway, the company’s first facility is currently under construction. The company holds a license for 10,000 tonnes maximum allowed biomass (MAB) for land-based farming of Atlantic salmon and has secured rights to land for a potential expansion of an additional 60,000 tonnes MAB production capacity. The further expansion is subject to zoning of the land and granting of licenses. Andfjord Salmon AS is listed on Euronext Growth under the ticker ANDF.

www.andfjordsalmon.com