Bakkafrost P/f

Earnings Release • Nov 3, 2015

Operational EBIT of DKK 206 million in third quarter

Operational EBIT of DKK 206 million in third quarter

The Bakkafrost Group delivered a total operating EBIT of DKK 206 million in Q3

2015, compared with DKK 209 million in Q3 2014. Harvested volumes were 13

thousand tonnes gutted weight in Q3 2015. Result after tax in Q3 2015 was DKK

168 million.

The total volumes harvested in Q3 2015 were 12,982 tonnes gutted weight, which

is an increase of 19%, compared with Q3 2014. The farming segment delivered an

operational EBIT of DKK 183 million in Q3 2015. The VAP segment, which produced

3,745 tonnes in Q3 2015, made an operational EBIT of DKK 9 million. The FOF

segment delivered an EBITDA of DKK 42 million in Q3 2015.

Commenting on the result, CEO Regin Jacobsen said:

"The margins fell in this quarter and relates mainly to increased costs.

Although higher costs, all segments delivered positive results in the quarter.

With the delivery of the live fish carrier "Hans á Bakka" in the third quarter,

Bakkafrost made a significant step forward in Bakkafrost's strategy to reduce

biological risk and improve efficiency. The outlook for the market remains tight

because of none expected supply growth in 2016."

Bakkafrost released 2.8 million smolts in Q3 2015, which is in line with the

company's smolt release plan.

Havsbrún's sourcing of raw material the first nine months of 2015 has been

similar to the first nine months in 2014. Havsbrún has purchased 10 thousand

tonnes of raw material in Q3 2015. Havsbrún's purchase of raw material in the

first nine months of 2015 amounts to 171 thousand tonnes.

The live fish carrier "Hans á Bakka" was delivered to Bakkafrost in Q3 2015. The

capacity is 450 tonnes of live fish, and the ship is equipped with state of the

art technology. The investment in "Hans á Bakka" will increase transport

capacity and at the same time reduce biological risks. Following the delivery,

finalising instalment of equipment and required tests were carried out in Q3

Bakkafrost's net interest bearing debt at the end of Q3 2015 was DKK 182

million, compared with DKK 233 million at year-end 2014. Bakkafrost had undrawn

credit facilities of approximately DKK 802 million at the end of Q3 2015, and

the equity ratio was 63%.

OUTLOOK

Market

The global demand in the salmon market continues with strong growth rates. The

markets are affected differently by the currency development during the year.

Expected global supply growth in 2015 is around 4% and 0% in 2016. Production

capacity is close to full utilization and further expansion relates to high

investments.

Farming

Bakkafrost expects to harvest 50,000 tonnes gutted weight in 2015. Bakkafrost's

forecast for smolt release in 2015 is 10.4 million pieces. The estimates for

harvesting volumes and smolt releases is as always dependent on the biological

situation.

Bakkafrost expects to harvest 48,000 tonnes gutted weight in 2016 and expect to

release 10.5 million pieces of smolt in 2016.

Value added products (VAP)

Bakkafrost's long-term strategy is to sell around 40-50% of the harvested

volumes of salmon as value added products on fixed price contracts. The

contracts last for 6 to 12 months. Bakkafrost has signed contracts covering

around 78% of the VAP capacity for the rest of 2015.

Fishmeal, -oil and feed (FOF)

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

availability of raw material. The quotas for catching blue whiting in the North

Atlantic are expected to be reduced, and therefore the production of fishmeal

and fish oil is most likely to reduce in volume in 2016 from relatively high

volumes in 2015.

The major market for Havsbrún´s fish feed is the local Faroese market, including

Bakkafrost's internal use of fish feed.

Havsbrún's sales of fish feed in 2015 is expected to be at 79,000 tonnes.

Depending on the purchase from external customers, the sales of fish feed in

2016 is expected to be 80,000 tonnes.

Investments

Bakkafrost has announced an investment plan for the period until 2017, latest

updated in August 2014. The purpose of the investment plan is to continue to

have one of the most costs efficient value chains in the farming industry, carry

out organic growth, increase flexibility and reduce the biological risk to meet

the future consumers' trends and to be more end-customer orientated.

The total investments for the period 2014-2017 were announced to be DKK 1,370

million including maintenance CAPEX. Investments in 2015 are expected to be DKK

550 million.

Financial

Improved market balances in the world market for salmon products and costs

effective production will likely improve the financial flexibility going

forward. A high equity ratio with the Group's bank financing and the issuance of

bonds makes Bakkafrost's financial situation strong. This enables Bakka­frost to

carry out its investment plans to further focus on strengthening the Group,

M&A's, organic growth opportunities and fulfil its dividend policy in the

future.

Please find enclosed the Company's Q3 2015 report and presentation.

Contacts:

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

Gunnar Nielsen, 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. 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 Fuglafjørður. The Group

operates licenses on 14 farming fjords. The Group has primary pro­cessing in

Klaksvík, Strendur, Kollafjørður, and secondary processing (VAP) in Glyvrar and

Fuglafjørður. The headquarter is located in Glyvrar, and the company has a total

of around 700 employees.

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