Nordic Halibut AS — Earnings Release 2021

Aug 25, 2021

Highlights in the second quarter 2021

Financial performance

• Sales revenues came in at 12.73 NOKm this quarter compared to 2.35 NOKm same period last year. The 441% YoY improvement was to a large extent related to the Hotel, Restaurants and Catering (HoReCa) market being mainly closed last year. However, seeing a noticeably improvement during the quarter we remain confident that the halibut market will normalize during the second half of 2021 as our main markets Norway, UK and US, reopens.
• Harvest volumes in second quarter 2021 was 117.0 tonnes HOG vs 21.0 tonnes HOG in 2Q20 (+458% YoY).
• The company achieved a price in 2Q of NOK 108.6 vs. NOK 109.8 in 2Q20 which was more or less unchanged YoY (-1%).
• Cost of goods sold rose from -4.20 NOKm to -11.79 NOKm YoY driven by a combination of higher feed cost and a 3.95 NOKm positive inventory change in 2Q20 compared to a negative 0.39 NOKm this quarter. Other expenses rose 4.98 NOKm YoY to 7.82 NOKm in 2Q21 mainly due to fishnet cleaning and Euronext Growth listing related expenses.
• This quarters result after tax was -17.66 NOKm vs. -16.21 NOKm in 2Q20.

Operational performance

• Harvested volume in 2Q21 was 117.0 tonnes HOG vs 21.0 tonnes HOG in 2Q20. Harvested volume rose 19.2% QoQ and YTD harvest volume is 215.1 tonnes HOG.
• Nordic Halibut still expect a total harvest of 425 tonnes HOG in 2021.

Other

• The company raised 115 NOKm in new equity and was successfully listed on Euronext Growth Oslo 26th of April. The rationale behind the capital raise was to fund the company's business plan, which is; (i) to grow harvest volumes in two phases: to 4500 tonnes in 2026 and 9000 tonnes in 2030 (HOG) and (ii) to add value-added products to the portfolio.
• Atle Jacobsen was hired as Chief Commercial Officer in April and he will be responsible for all market activities, including the development of the future VAP products.

Income statement

		Unaudited	Unaudited	Unaudited	Unaudited	Audited
Amounts in NOKm	Note	2Q21	2Q20	YTD 2021	YTD 2020	2020
Operating revenue		12,73	2,35	24,15	15,46	34,85
Cost of goods sold		−11,79	−4,20	−19,60	−10,84	−4,83
Personnel expenses		−5,43	−4,93	−13,40	−10,97	−23,56
Depreciation and amortization		−3,26	−3,16	−6,41	−6,35	−12,60
Other operating expenses		−7,82	−2,84	−12,92	−6,61	−11,36
Operating expenses		−28,29	−15,13	−52,32	−34,77	−52,36
Operating profit/loss		−15,56	−12,78	−28,16	−19,31	−17,51
Net financial items		−2,10	−3,43	−3,50	−3,21	−3,76
Profit/loss before tax		−17,66	−16,21	−31,67	−22,53	−21,26
Tax		0,00	0,00	0,00	0,00	0,00
Profit/loss for the period		−17,66	−16,21	−31,67	−22,53	−21,26
Shares		2Q21	2Q20	YTD 2021	YTD 2020	2020
Outstanding, m 1		23,0	11,1	23,0	11,1	17,9
EPS 2		−0,8	−1,5	−1,4	−2,0	−1,2
Harvest volumes, HOG		2Q21	2Q20	YTD 2021	YTD 2020	2020
Harvested volume, t		117,0	21,0	215,1	124,0	301,1
Average sales price, NOK pr kg		108,6	109,8	112,2	123,7	115,4

Performance analysis

2Q21:

Sales rose a massive 441% YoY but the increase was mainly related to the HoReCa segment being largely closed in 2Q 2020. As a more relevant comparison sales was 8.39 NOKm in 2Q19 (pre-covid) and 11.42 NOKm in 1Q21 (+51.5% and +11.3% respectively).

Cost of goods sold rose from -4.20 NOKm to -11.79 NOKm YoY driven by a combination of higher feed cost and a 3.95 NOKm positive inventory change in 2Q20 compared to a negative 0.39 NOKm this quarter. Other expenses rose 4.98 NOKm YoY to 7.82 NOKm mainly due to fishnet cleaning and listing related expenses (2.0 NOKm and 2.15 NOKm respectively).

Profit after tax in the quarter ended at -17.66 NOKm vs. -16.21 NOKm last year (-9.0%).

¹ Share split 10:1, 01.03.21

² Historical EPS figures are adjusted for share split in 1Q21

Balance sheet

		Unaudited	Unaudited	Audited
Amounts in NOKm	Note	2Q21	2Q20	2020
Assets
Non-current assets
Intangible assets		0,02	0,04	0,02
Property & equipment		129,93	119,96	119,66
Financial fixed assets		1,11	0,00	1,11
Total non-current assets		131,06	120,00	120,79
Current assets
Inventory & biological assets	3	172,63	145,96	170,39
Account receivables		16,47	6,47	12,83
Cash & cash equivalents		123,29	6,05	53,11
Total current assets		312,39	158,47	236,33
Total assets		443,45	278,48	357,12
Equity and liabilities
Equity
Share capital	4	145,69	55,70	89,38
Other equity	4	132,23	68,29	110,17
Total equity		277,92	123,99	199,55
Long-term debt
Debt to credit institutions	5	95,30	102,90	91,40
Other long-term debt	5	17,30	16,82	15,44
Total long-term debt		112,60	119,72	106,84
Short term debt
Bank overdraft facility	5	23,38	16,41	22,20
Account payables		21,20	13,36	23,67
Other short-term debt		8,35	5,00	4,85
Total short term debt		52,93	34,76	50,72
Total debt		165,53	154,48	157,56
Total equity and liabilities		443,45	278,48	357,12

Financial status

At the end of second quarter 2021 Nordic Halibuts' total capital was 443.45 NOKm (QoQ change +108.62 NOKm or +32.4%).

Inventories and biological assets are capital ized at 172.63 NOKm compared to 170.39 NOKm at year-end (+1.3%) and 173.48 NOKm at 1Q21 (-0.5%).

The company's bank deposits were 123.29 NOKm as of 30. June 2021, up 70.2 NOKm since year-end 2020 driven by share issue and YTD loss.

Total equity stands at 277.92 NOKm at the end of this quarter. That represents an eq uity ratio of 62.7% vs. 55.9% at year end driven by 110 NOKm in net new equity offset by loss YTD 2021.

There are only minor changes in the com pany's debt levels both since YE and since 1Q21. Long-term interest-bearing debt came in at 112.60 NOKm in 2Q21 compared 106.84 NOKm at 4Q20 (+5.76 NOKm). The bank overdraft facility was also up 1.18 NOKm (6.7%) since YE to 23.38 NOKm.

Cash flow

	Unaudited	Unaudited	Unaudited	Unaudited	Audited
Amounts in NOKm	2Q21	2Q20	YTD 2021	YTD 2020	2020
Cash flow from operating activities
P/L before tax	−17,66	−16,21	−31,67	−22,53	−21,26
Tax	0,00	0,00	0,00	0,00	0,00
Depreciation and amortization	3,26	3,16	6,41	6,35	12,60
Change in working capital	−4,82	−0,09	−4,85	0,83	−20,05
Net cash flow	−19,23	−13,14	−30,11	−15,35	−28,72

Cash flow from investing activities

Cash flow	−13,54	−0,29	−16,68	−2,68	−6,47
Net cash flow	−13,54	−0,29	−16,68	−2,68	−6,47

Cash flow from financing activities

Net new debt	13,60	19,03	6,94	18,42	19,83
New equity	110,04	0,00	110,04	0,00	62,79
Net cash flow	123,64	19,03	116,97	18,42	82,63

Cash and cash equivalents

End of the period	123,29	6,05	155,71	6,50	53,11
Net cash flow	90,87	5,60	70,18	0,39	47,45
Start of the period	32,42	0,45	85,52	6,11	5,66

2Q21:

The company's operating activities gener ated a negative cash flow of 19.23 NOKm in 2Q21 while the investment and financ ing activities generated a combined positive cash flow of 110.09 NOKm. Both the former and the latter were as expected and com municated in the listing documents.

At the end of 2Q21, the company has an unused overdraft facility of 5.40 NOKm vs. 6.46 NOKm at YE.

During 2Q the company raised 110.04 NOKm in new equity (~5.11 m shares) and the company's total cash flow in the sec ond quarter was therefore a positive 90.87 NOKm.

Cash at period end was 123.29 NOKm.

2020:

In 2020 the cash flow was a positive 47.45 NOKm as payment of new equity and raising of new loans counterweighed the negative result for the whole year.

The board and CEO of Nordic Halibut AS

Averøy, 24th of August 2021

Note 1 General information

Nordic Halibut AS has no subsidiaries or ownership in any other companies. This interim report has been through a limited review by the company's auditors.

Note 2 Accounting Principles

These interim financial statements have been prepared in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway. The interim financials statements have been prepared based on the principle of historic cost. The same accounting policies, presentations, methods and calculations have been used in the interim financial statements as they were applied in the preparation of the company's financial statement of the year ending 31st of December 2020.

Note 3 Biological assets

In connection with the stock listing and capital raise in April 2021 a review of the biomass valuation was carried out. As of year-end 2020, Nordic Halibut values the biomass estimating the expected amount of biological assets at time-ofharvest multiplied by the expected sales price at the same time minus the sales cost per kg.

Amounts in NOKm	Unaudited 2Q21	Unaudited 2Q20	Audited 2020
Feed
Fish feed	1,5	2,0	1,8
Biomass
Broodstock	23,0	23,0	23,0
Fry and fish in sea, 0-1kg	35,8	1	40,8
Fish in sea, > 1kg	112,3	1	104,8
Sum biomass	171,1	144,0	168,6
Total biological assets
Sum	172,6	146,0	170,4

• Broodstock valued at written-down value
• Fry and food fish of up to 1 kg assessed at acquisition cost
• Food fish from and including growth of 1 kg valued at net realizable value

Nordic Halibut implemented Fishtalk Controller in 2020, and the company is planning to implement the Fishtalk Planning and Finance modules during 2021. This will enable the company to follow the costs based on future generations.

¹ The model was updated at year-end 2020 and the 2Q20 figures has not been restated according to the new valuation metrics.

Note 4 Equity

Amounts in NOKm	Share capital	Other equity	Sum
Equity pr 31.12.2020	89,38	110,17	199,55
Changes in the period
Period P/L	0,00	−31,67	−31,67
Debt conversion	0,00	0,00	0,00
New shares 1	25,56	84,48	110,04
Dividend	0,00	0,00	0,00
Total changes in the period	25,56	52,81	78,37
Equity pr 30.06.2021	114,94	162,98	277,92

During the quarter the company completed a share issue of 110.04 NOKm equal to 5.11 million number of new shares. The new number of shares as of 30.06.2021 is 22.99 million.

¹ Share capital rose 25.56 NOKm QoQ to 145.69 NOKm while share premium rose 84.48 NOKm QoQ to 125.09 NOKm. The combined quarterly change was 110.04 NOKm.

Note 5 Interest-bearing liabilities

Amounts in NOKm	Unaudited 2Q21	Unaudited 2Q20	Audited 2020
Interest-bearing liabilities
Long-term debt to credit institutions	95,30	102,90	91,40
Other long-term debt	15,02	14,25	12,88
Short-term debt to credit institutions	23,38	16,41	22,20
Sum	133,70	133,56	126,48

Specification of short term debt to financial institutions

Ordinary operating credit	9,60	2,88	8,54
Government-guaranteed credit (covid-19)	13,78	13,53	13,65
Sum	23,38	16,41	22,20
Limit on ordinary operating credit	15,00	15,00	15,00
Unused credit	5,40	12,12	6,46

Note 6 Events after balance sheet date

No events after the balance sheet date (30.06.2021).

Going forward – the company's business plan

• The company plans to grow harvest volumes to ~9,000 tonnes in 2030
• A new land-based facility and 4 new sea locations are needed to facilitate the growth target (in phase two)

(a) SCALE-UP BUSINESS (b) ADD VALUE-ADDED PRODUCTS (VAP)

Given the higher harvest volumes the company have the possibility to opt for further processing or value-added products.

There is a high potential in the utilization of value-added products for halibut as:

• a) The filet yield is 65% compared to salmon at 58%
• b) Stable and consistent delivery from Nordic Halibut
• c) Potential for higher achieved prices

We see the VAP-production as a complement in the future product offering that will open new markets and segments for Nordic Halibut

In order to achieve the company's goal of achieving a harvest volume of 4,500 tonnes in 2026 and 9,000 tonnes in 2030, there will be a need for additional equity financing during 2022.

Dictionary

Biomass

Total weight of live fish (number of fish multiplied by an average weight), kg/tonnes

LW

Fish, live weight (kg/tonnes)

HOG

Fish, head on gutted (kg/tonnes)

VAP Value added products

FCR Feed conversion ratio

HoReCa Hotel, Restaurants and Catering

YE Year end

QoQ Quarter over quarter

YoY Year over year

Sushi-grade Atlantic halibut Superior, stress-free and farmed in Norway