Gigante Salmon AS

Quarterly Report • Oct 24, 2023

Q3 REPORT 2023

24th October 2023

CEO Helge E. W. Albertsen CFO Rune Johansen

The majority owner Gigante Havbruk is also a co-owner of operations at all stages of the salmon value creation chain. This ensures Gigante Salmon access to the necessary expertise in all areas.

Updated project summary Rødøy

• § Gigante Salmon is constructing a land-based salmon farming site on Lille Indre Rosøy which has a yearly production capacity of up to 16.000 tonnes HOG, based on a licensed MAB of 13,731 tonnes.
• § Construction in two phases: Phase 1 covers a grow-out basin where smolt grows from 100 grams to 1 kg in 11 months. Phase 2 covers 2 production basins where salmon grows from 1 kg to harvest (4-7 kg). Phase 1 will be completed Q4 2023 with subsequent smolt transfer.
• § The design is changed to basin walls/floor in concrete with liner, and water outlet in concrete channels. Extra area established by filling in sea. Increased automation and redundancy. High inflation on especially power supply/ distribution. Additional investments amount to approx. 200 MNOK. The company raised 300 MNOK in mid October 2023 to cover increased capex, strengthen working capital and establish a capital buffer.
• § This financing round will cover capital needs to complete construction and working capital up to full production.

THE PROJECT ECONOMICS REMAIN STRONG AND HIGHLY

1. gen prod. volume Full production

122

1. gen prod. volume

THE INCREASED CAPITAL NEED IS FUNDED AS FOLLOWS:

COMPETITIVE:	SOURCES	MNOK
PRODUCTION COSTS1	Expansion of leasing facility:	100.0
NOK/kg HOG 60	New equity from Gigante Havbruk:	100.0
42	New equity from other investors:	100.0
	Total	300.0

CAPEX NOK/kg HOG	USES	MNOK
	Remaining capex:	200.0
	Working capital:	50.0
40	General corporate purposes and buffer:	50.0
	Total	300.0
Full production

UPDATED PROGRESS PLAN

The timeline for the project follows the initial plan. The date for completion of construction and testing is pushed from originally August 2023 to November 2023. However, the fish to be released into the site is already growing and is held by Grytåga Settefisk AS awaiting completion of the site so the expected time to first harvest by Q4 2024 remains unchanged.

1 Includes financials costs

Fully-funded to produce 16,000 tonnes after capital raise

	PHASE 1	FULL PRODUCTION
INVESTMENT:	MNOK 645	No additional investments required
SMOLT RELEASED:	1,100,000	3,300,000
HARVEST (TONNES, WFE):	6,350	19,050
HARVEST (TONNES, HOG):	5,300	16,000
UTILISATION MAB:	0.5x	1.4x
PROD. COST NOK/KG HOG1 :	60	42
CAPEX/KG HOG:	122	40
	2023	2025 2027

Health, Security, Environmental & Quality HSE&Q

PROJECT EXECUTION

An overriding focus for all our activities is that the health of our colleagues and fish is crucial for our success: "If the fish are doing well, then we are doing well."

Important areas of responsibility for Gigante Salmon AS as the project's owner is undoubtedly health, environment, safety and quality.

One accident with high potential of risk in connection with diving operations during Q3 2023.

Highlights Q3 2023

THE THIRD QUARTER OF 2023

• Onshore power for phase I established
• Feed, housing and work fleet anchored and operational
• Risers and sieve boxes for water intake phase I installed
• Preparations, groundwork and installations of technical area for phase I in completion
• All positions in planned operating organization filled
• Plan audit completed and forecast updated
• Financing
  • - Increased leasing agreement with SpareBank1 Finans Nord-Norge (100 MNOK)
  • - Private placement 11 October (200 MNOK)

Majority of capex increase directed to increase quality and robustness

ADDITIONAL INVESTMENTS SPLIT

CAPEX Category	Original budget	Updated prognosis	Additional investments
Land and Excavation	99,0	132,1	33,1
Concrete works	18,0	82,0	64,0
Technical installations	264,0	327,9	63,9
Shore power	18,0	62,0	44,0
Other	46,0	41,0	-5,0
TOTAL	445,0	645,0	200,0

Capex increase	Design improvement
3,1	30,0
4,0	60,0
37,9	26,0
30,0	14,0
-5,0	0,0
70,0	130,0

COMMENTS

Main design improvements:

• 1. Filled out east shore of the island creating area for expansion or additional water treatment/process equipment
• 2. Higher spec on automation equipment and increased redundancy in water supply system
• 3. Power capacity increased from 5 to 6,5 MW with increased redundance

Snapshot from Building Information Model

On track for first harvest in Q4-2024

Income statement - Group

• Income statement reflects project execution phase, with limited income and operating expenses

Income statement	Note	Q3 2023	YTD 2023	Q3 2022	YTD 2022	2022
Other income			168	128	128	151
Total income			168	128	173	151
Employee benefits expense		372	1082	80	534	359
Depreciation and amortisation expenses	1	25	15	24	72	96
Other operating expenses		255	1836	604	239	3408
Total operating expenses		652	2 993	707	2844	3864
Net income		-652	-2 825	-579	-2716	-3712
Interest income		1577	4 197	1497	3033	4662
Other finance income		23	26
Interest expenses			46		29	29
Other financial expense			12	0	2	4
Stock exchange fees		237	625
Net finances		1363	3540	1497	3002	4629
Profit before income tax		711	715	917	286	917
Income tax expense		148	202	-4 713	-4613	-4667
Net profit or loss for the period	2	563	213	5 631	4900	5584
To minority interests
To majority interests		563	513	5 631	4 900	5584
Disposal
Transferred from/to equity		563	513	5 631	4 900	5584

Balance sheet - Group

Assets	Note	Q3 2023	Q3 2022	2022	Equity and liabilities	Note	Q3 2023	Q3 2022	20
Deferred tax asset		5876	6025	6078	Share capital	ദ	105 556	1055556	1055
Total intangible assets		5876	6025	6078	Share premium		165 734	165 734	1657
Land, buildings and other property		384 535	65327	108981	Other paid-in equity			114
Ships		709	798	776	Total paid-in equity	2	271290	271404	2714
"Fixtures/fittings, tools, office machinery and equipment"		16	12	24	Other equity		8 925	7 616	82
Total tangible assets	1	385 260	66137	109 781	Total retained earnings	2	8925	7 616	82
Investments in shares		100	O	-	Minority interests		-
Total financial fixed assets		100	O	-	Total equity	N	280 215	279 020	2797
Total fixed assets		391236	72162	115 859	Building loan		177838
Trade receivables			63	350	Total other non-current liabilities		177 838	-
Other receivables		24 976	15 995	19285	Trade creditors		48991	2201	370
Total receivables		24 976	16 058	19635	Public duties payable		ടല്ല	280
Cash and bank deposits		99667	198 516	182 097	Other short-term liabilities		8277	5235	6
Total current assets		124 643	214 574	201733	Total current liabilities		57 826	7 716	378
Total assets		515 879	286736	317 592	Total liabilities		2356664	7716	378

• Equity ratio at 54%
• Strengthened financing through increased leasing (100 MNOK) and private placement (200 MNOK), carried out in October

Income statement – GS Rødøy

• Total investments in the group in the second quarter rose 385 260 kNOK, compared to 260 074 kNOK in Q2

Income statement	Note	Q3 2023	YTD 2023	Q3 2022	YTD 2022	2022
Other income			140	11	11	11
Total income			140	11	11	11
Depreciation and amortisation expenses	1	22	66	22	66	90
Other operating expenses		21	231	48	189	641
Total operating expenses		44	298	71	256	730
Net income		-44	-158	-60	-245	-720
Interest income		872	2060	825	1874	2827
Other financial income		23	26
Interest expenses			23			0
Other financial expense			11			2
Net finances		896	2053	825	1874	2825
Profit before income tax		852	1894	765	1628	2105
Income tax expense		187	419	168	358	464
Net profit or loss for the period		665	1475	596	1269	1 641
To minority interests
To majority interests		665	1475	596	1269	1641
Disposal
Transferred from/to equity		665	1475	596	1269	1641

Balance sheet – GS Rødøy

Assets	Note	Q3 2023	Q3 2022	2022
Land, buildings and other property		383320	65 041	107 800
Ships		709	798	776
Total tangible assets	1	384029	65 839	108576
Total fixed assets		384029	65 839	108576
Trade receivables			13	350
Other receivables		24768	13 246	19236
Total receivables		24768	13 260	19586
Cash and bank deposits		87 980	122 698	103 603
Total current assets		112747	135 958	123 189
Total assets		496776	201796	231765

Equity and liabilities	Note	Q3 2023	Q3 2022	2022
Share capital		19230	19230	19230
Share premium		172 870	172 870	172870
Total paid-in equity		192100	192 100	192100
Other equity		3548	1701	2072
Total retained earnings		3548	1701	2072
Total equity		195 648	193801	194 172
Deferred tax		1 018	493	599
Liabilities to financial institutions		177838
Liabilities to group companies		65 000
Total other non-current liabilities		242838
Trade creditors		48875	2389	36 507
Public duties payable		386	80	153
Other short-term liabilities		8 011	5033	332
Total current liabilities		57272	7502	36993
Total liabilities		301128	7995	37592
Total equity and liabilities		496776	201796	231765