Andfjord Salmon

Earnings Release • May 29, 2024

Andfjord Salmon Group: Kvalnes build-out on schedule | First quarter 2024 financial results

Andfjord Salmon Group: Kvalnes build-out on schedule | First quarter 2024 financial results

29.5.2024 07:00:01 CEST | Andfjord Salmon | Non-regulatory press releases

Andfjord Salmon Group AS (Andfjord Salmon) reports that its build-out at

Kvalnes, Andøya, is progressing as planned. The company has successfully

completed an equity raise of NOK 350 million, attracting new strategic

industrial investors.

"Our build-out is progressing well. During the first quarter, we identified an

additional revenue stream that strengthens our business case. We also received

another report confirming strong biological conditions in our first production

cycle, which contributed to the success of last week's equity raise," said

Martin Rasmussen, CEO of Andfjord Salmon.

KVALNES EXPANSION ON TRACK

In the first phase of the build-out, Andfjord Salmon is completing four new

pools, increasing total production capacity to 8,000 tonnes HOG at Kvalnes by

2025. The company aims to achieve a total production capacity of 40,000 tonnes

HOG at Kvalnes through gradual volume increases between 2025 and 2030. The

initial phase includes developing shared infrastructure such as waterways and a

harbor area to support future production.

In the first quarter, Andfjord Salmon announced the early completion of

excavating the next 12 pool pits at Kvalnes. A facility to produce concrete

elements for pool walls and floors is now operational and will use excavated

materials as concrete ingredients, minimizing costs and environmental impact.

The development of inlet and outlet waterways is also on track, with the bedrock

quality meeting expectations. Harbor area development is progressing according

to plan.

"POST-SMOLT" STRATEGY

During the first quarter, Andfjord Salmon revealed plans to utilise surplus pool

capacity by releasing additional smolt in its land-based pools. These smolt will

be sold to ocean-based fish farmers in the region after 5-7 months, once the

fish reach approximately 1 kilogram. This strategy enhances production capacity

and income potential without additional infrastructure costs.

According to Andfjord Salmon's calculations, this strategy will enable a 10%

higher biomass turnover, leading to an estimated 15-25% increase in EBIT. Cash

flow will also improve as sales revenue can be generated after 5-7 months of

production, in addition to income from harvesting human-grade salmon after a

full 12-15 month production cycle. Releasing larger, more robust fish into ocean

net pens shortens the ocean-based grow-out phase, providing biological and

environmental benefits to ocean-based fish farmers. Andfjord Salmon has entered

a strategic collaboration with Eidsfjord Sjøfarm/Holmøy Havbruk to supply

post-smolt to nearby ocean-based farming locations.

SUCCESSFUL EQUITY RAISE

Last week, Andfjord Salmon capitalised on increased investor interest, raising

NOK 350 million in equity to enhance financial flexibility for the ongoing

Kvalnes build-out. Current shareholders, including the company's largest

shareholder Jerónimo Martins Agro-Alimentar S.A and Eidsfjord Sjøfarm, invested

their pro-rata shares in the private placement. High Liner Foods Incorporated, a

leading seafood processor and marketer in the US and Canada, also invested USD

10 million, becoming a new shareholder in Andfjord Salmon.

"We are satisfied with our progress and pleased to see reputable industrial

investors recognise this by investing in Andfjord Salmon," said Martin

Rasmussen.

SCIENCE-BASED APPROACH

Andfjord Salmon adopts a science-based approach to land-based fish farming.

Independent research body Nofima documented biological conditions and fish

welfare in the first pool. Nofima's final report, covering the full production

cycle from smolt release to harvest, highlights Andfjord Salmon's comprehensive

welfare and health documentation plan. The report documents numerous operational

welfare indicators, including environmental factors, fish behavior, growth, and

health. Key findings are summarised in the enclosed first-quarter presentation.

"The fish farming industry is under pressure to improve biological conditions,

fish health, and welfare. Although we are still a small player in a large global

industry, this report shows that our land-based flow-through system enables

fish-friendly salmon farming," said Martin Rasmussen.

FIRST QUARTER 2024 FINANCIAL RESULTS

Andfjord Salmon is expanding its Kvalnes facility and had no salmon production

and minimal revenue in the first quarter of 2024. The company reported an

operating loss of NOK 17 million for the first quarter, compared to a loss of

NOK 13.9 million in the same period last year.

PRESENTATION IN OSLO AT 08:00 (CET) TODAY

Andfjord Salmon will provide an operational update and presentation of the

company's first quarter 2024 financial results at 08:00 (CET) today. The

presentation will be held physically in Oslo as well as streamed live to online

viewers.

Venue: Hotel Continental, Stortingsgata 24/26, 0117 Oslo

The webcast presentation can also be watched from this URL:

https://channel.royalcast.com/landingpage/hegnarmedia/20240529_3/

The presentation will be held in English. The presentation materials are

attached to this announcement.

CONTACTS

* Investors: Bjarne Martinsen, CFO, Andfjord Salmon AS, +47 975 08 345,

bjarne.martinsen@andfjord.no

* Media: Martin Rasmussen, CEO, Andfjord Salmon AS, +47 975 08 665,

martin@andfjord.no

ABOUT ANDFJORD SALMON

Located at Andøya on the Arctic Archipelago of Vesterålen, Norway, Andfjord

Salmon is developing the world's most sustainable and fish-friendly aquaculture

facility of its kind. Through a proprietary flow-through system, Andfjord Salmon

combines the best from ocean and land-based salmon farming. In its first

production cycle, the company achieved an industry-leading survival rate of 97.5

percent, feed conversion ratio of 1.05, superior share of 91.1 percent, and

required 1 kWh to produce one kilo of salmon. Andfjord Salmon has identified a

roadmap towards a production capacity of 40,000 tonnes HOG at Kvalnes, Andøya,

and set a long-term ambition to reach 90,000 tonnes HOG across Kvalnes, Breivika

and Fiskenes at Andøya. For more information, see www.andfjordsalmon.com -

http://www.andfjordsalmon.com/.

ATTACHMENTS

Andfjord Salmon Q1 2024 Presentation 240529.pdf -

https://kommunikasjon.ntb.no/ir-files/17847566/3154/4557/Andfjord%20Salmon%20Q1%

202024%20Presentation%20240529.pdf