Andfjord Salmon

Earnings Release • Jun 4, 2021

Andfjord Salmon AS announces potential plan for 50 percent growth in production volume | Q1 2021 interim financial results

Andfjord Salmon AS announces potential plan for 50 percent growth in production volume | Q1 2021 interim financial results

4.6.2021 07:05:30 CEST | Andfjord Salmon | Non-regulatory press releases

Andfjord Salmon AS today announces an opportunity to initiate a volume expansion

plan at its Kvalnes facility. The plan involves increasing production volume by

around 50 percent, from 12,600 to 19,000 tonnes HOG. This is equivalent to an

annual EBIT increase from approximately NOK 350 million to NOK 500 million at

full production.

"We are constantly looking at ways to improve the Kvalnes build-out, both to

reduce project risk and to increase the long-term profitability of Andfjord

Salmon, to the benefit of our shareholders. To initiate the build-out of Kvalnes

Phase 3 is another such measure," says Martin Rasmussen, CEO of Andfjord Salmon.

New opportunity at Kvalnes

Andfjord Salmon is currently in process of acquiring additional 63,000 square

meters of land area adjacent to its site at Kvalnes. This land area purchase

unlocks an opportunity to initiate a further expansion at Kvalnes, with a

possibility to increase production volume by approximately 50 percent, from

today's 12,600 tonnes to 19,000 tonnes, equivalent to a potential EBIT increase

of approximately NOK 150 million at full production.

By initiating the Kvalnes Phase 3 build-out now, Andfjord Salmon is able to

capitalize on a window of opportunity that can lower build-out costs notably. It

will also allow the company to harvest improved economics at scale at Kvalnes

earlier than planned, which means improved profitability. The alternative plan

involves shifting the release of smolt in the first pool to the second quarter

of 2022 and will significantly strengthen the mid and long-term revenue

potential for Andfjord Salmon.

Initiating Kvalnes Phase 3 will also further reduce biological risk at Phase 1

and Phase 2 at Kvalnes. It will allow an even longer test period of the first

pool, plus further reduce the risk that fish from Phase 1 and Phase 2 suffer

stress from noise/vibrations from nearby construction work.

"It is the management's view that clearing the path to realize a potential 50

percent growth in production volume at Kvalnes, at lower build-out cost than we

will achieve at a later stage, is an attractive proposition that more than

outweighs the consequence of moving first smolt release to 2022," says Martin

Rasmussen.

The alternative plan is subject to approval by the Andfjord Salmon board of

directors and necessary financing. Should the plan be approved, debt financing

will be the source of financing for the early initiation of Phase 3 at Kvalnes.

First pool technically complete

Andfjord Salmon is currently putting the finishing touches on the first pool

(Phase 1) and conducting the excavation work for the next pools at Kvalnes

(Phase 2), representing a total production volume of 12,600 tonnes HOG.

The construction of the first pool is finalized, with only minor

post-construction installations remaining on the pool, making it technically

ready to be filled with water.

The installation of the outer joints to the pool's water inlet pipeline remains.

Andfjord Salmon has discovered damage to the outer connection point of the

installed water inlet pipeline and a replacement section has been ordered. The

company estimates that it will take approximately 8-10 weeks and a cost of NOK

30 million to complete the repair. This work has already commenced.

"This has increased the relevance of initiating the Kvalnes Phase 3 build-out

now, because it will eliminate time constraints associated with repairing the

inlet pipeline section," says Martin Rasmussen.

Q1 2021 interim results

Andfjord Salmon is currently building up its first land-based salmon farming

facility, which means that at present it does not generate revenues. The company

had an operating loss of NOK 7.3 million this year's first quarter compared to a

loss of NOK 3.3 million in the corresponding quarter last year.

As of 31 March 2021, Andfjord Salmon held cash or cash equivalents of NOK 88.8

million. This figure does not include a NOK 35 million undrawn credit facility

of NOK 15 million in available grants.

Q1 operational update presentation

The presentation material for today's operational update and Q1 2021 interim

results, to be presented at 08:00 CET today, is enclosed to this announcement.

The webcast presentation can be followed from this link:

https://channel.royalcast.com/landingpage/hegnarmedia/20210604_1/

ENDS

DISCLOSURE REGULATION

This information is subject to the disclosure requirements set out in section

5-12 of the Norwegian Securities Trading Act.

CONTACTS

* Bjarne Martinsen, CFO, Andfjord Salmon AS, +4797508345,

bjarne.martinsen@andfjord.no

* Martin Rasmussen, CEO, +47 975 08 665, martin@andfjord.no

ABOUT ANDFJORD SALMON

About Andfjord Salmon AS

Andfjord Salmon has developed an innovative and sustainable aquaculture concept

for shore-based farming of Atlantic salmon, based on a flow-through farming

concept. 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.

Located at Kvalnes on the island of Andøya on the Arctic Archipelago of

Vesterålen, Norway, the company's first facility is currently under

construction. The company holds a license to produce 12 600 tonnes (HOG) for

land-based farming of Atlantic salmon and has secured rights to land for a

planned expansion of an additional 77,400 tonnes (HOG) production capacity.

Further expansion is subject to the zoning of the land and granting of licenses.

Andfjord Salmon AS is listed on Euronext Growth under the ticker ANDF.

www.andfjordsalmon.com - http://www.andfjordsalmon.com/

The information in this announcement is subject to disclosure requirements under

the EU Market Abuse Regulation and Euronext Growth listing rules. The

information was submitted for publication by the contact person set out above.

ATTACHMENTS

Andfjord Salmon AS Q1 2021 report.pdf -

https://kommunikasjon.ntb.no/ir-files/17847566/620/835/Andfjord%20Salmon%20AS%20

Q1%202021%20report.pdf