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Salmon Evolution ASA — Interim / Quarterly Report 2022
Feb 8, 2023
3732_rns_2023-02-08_2acab8e5-beb2-4f0d-9a59-81787d20f608.pdf
Interim / Quarterly Report
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Extending the ocean potential Q4 2022
Extending the ocean potential 1
Salmon Evolution – Extending the Ocean Potential
A Norwegian salmon farming company targeting a global leading position in sustainable production of high-quality salmon from land-based facilities.
- Utilizing a hybrid flow-through ("HFS") system with 30%-35% fresh seawater intake, reducing complexity and biological risk and securing optimal growth at low cost
- 7,900 tonnes HOG Indre Harøy Phase 1 facility in operation annual harvesting capacity of 31,500 tonnes HOG fully developed
- Joint venture with Dongwon Industries for a 16,800 tonnes HOG production facility in South Korea
- Launched North America expansion plan and established team of dedicated resources
- Clear roadmap for 100,000 tonnes HOG by 2032
- Listed on Oslo Stock Exchange main list from July 2021
Highlights in the quarter
- Batch 1 fully harvested out with very strong results harvest volume of ~340 tonnes HOG at avg. weight of ~3.75 kg HOG (~4.5 kg LW) – excellent product quality confirmed by industry leading superior share of 96%
- On track for profitable farming operations in Q2 2023 and steady state production from late Q3 2023
- Production ramp-up proceeding according to plan with batch 3 and 4 stocked in October and December, respectively
- Continued strong biological performance with minimal mortality batch 2 scheduled for harvest in Q2 2023
- Increasing focus on international expansion plan, both in South Korea and North America
- Indre Harøy phase 2 preparations continuing clear signs of normalization in construction markets
- Available liquidity of NOK 400 million per 31 December 2022 including committed undrawn credit facilities
Subsequent events
• Strengthening of the executive management team – Trond Håkon Schaug-Pettersen appointed as CEO and Trond Vadset Veibust as CFO
Key figures
| (figures in NOK 1000) | Q4 2022 | Q4 2021 | 2022 | 2021 |
|---|---|---|---|---|
| IFRS main figures | ||||
| Operating Revenues | 28,408 | 5 | 47,681 | 12,257 |
| Operational EBITDA* | -22,631 | -11,599 | -68,481 | -35,612 |
| Operating Profit (EBIT) | -21,872 | -12,418 | -62,931 | -37,841 |
| Profit / (loss) before taxes | -6,492 | -11,757 | -32,726 | -26,444 |
| Cash flow from investment activities | -194,270 | -214,292 | -805,971 | -754,553 |
| Cash flow from financing activities | 70,462 | 198,076 | 648,554 | 679,668 |
| Net cash flow | -178,361 | -71,209 | -226,785 | -142,261 |
| Cash and cash equivalents | 278,759 | 505,545 | 278,759 | 505,545 |
| Net Interest-bearing liabilities | 302,990 | -277,979 | ||
| Total assets | 2,305,122 | 1,705,903 | ||
| Equity | 1,563,906 | 1,297,530 | ||
| Equity ratio | 68 % | 76 % | ||
*Before fair value adjustment related to biological assets
Roadmap to 100,000 tonnes in 2032
Salmon Evolution targets a leading position in the production of sustainable high-quality salmon from land-based facilities. In addition to its 31,500 tonnes project in Norway, the Company is expanding internationally through a JV in South Korea. Furthermore, the Company has initiated an expansion plan into North America. Through utilisation of technology, competence and experience from domestic projects, Salmon Evolution aims to develop projects in targeted growth markets in collaboration with local partners. The Company has a clear road map towards 100,000 tonnes production capacity by 2032.
Roadmap towards 100kt HOG annual harvest
Key Company milestones
Source: Salmon Evolution
Important events
Batch 1 fully harvested with very strong results
Batch 1 was fully harvested out during the fourth quarter with very strong results. Total harvest volume ended at ~340 tonnes HOG with an average weight of ~3.75 kg HOG (~4.5 kg LW). The harvest was spread over ~1 month in 3 rounds from early November to early December which gives an effective production cycle of around 7-8 months since stocking.
The harvest showed strong product quality, confirmed through an industry leading superior share of 96% for batch 1 as a whole. The average realized price for batch 1 ended at NOK 75/kg and NOK 78/kg for Superior 3+ kg HOG, representing a NOK ~3/kg premium to corresponding Nasdaq prices.
The first harvest was sold to a selected mix of customers, both in Norway and abroad, and feedback as to the quality of the fish has been very positive.
Ramping up production
During the fourth quarter the Company also released its third and fourth batch of smolt at Indre Harøy. Batch 3 was stocked in late October and comprised 200,000 smolt with an average weight of around 220 grams. Batch 4 was stocked in early December and comprised 265,000 smolt with an average weight of around 260 grams, marking the Company first "full size" smolt release. Going forward the Company plans to stock "full size" batches of smolt at Indre Harøy every second month.
Furthermore, the increase in biomass production continued in the fourth quarter with December seeing all-time high production despite batch 1 being fully harvested out early in the month. The positive trend has continued into 2023.
Fish from first harvest (December 2022)
Photo: Salmon Evolution
Strengthening of the executive management team
In January 2023 Trond Håkon Schaug-Pettersen was appointed CEO of the Company. Schaug-Pettersen was appointed CFO of Salmon Evolution in October 2020 and has since October 2022 also held the position as interim CEO.
Schaug-Pettersen has extensive experience from both the seafood industry and the capital market and has over the last two years been an integral part of Salmon Evolution's executive management. Before joining Salmon Evolution, he served over 4 years as Senior Vice President Finance and Business Development at salmon farmer and processor Hofseth International and, prior to that, 9 years as an investment banker at Swedbank/First Securities.
The Company also appointed Trond Vadset Veibust (37) as new CFO. Veibust comes from Ekornes where he has been for 8 years, of which for the last 3 years as a member of the executive management. Ekornes is a major furniture producer with global distribution and operations, and during his time there, Veibust has held several executive positions, most recently as Senior Vice President for Ekornes' global operations. Veibust has previously also worked 4 years at Ernst & Young as an auditor, he is a state authorized public accountant and has a MSc from the Norwegian School of Economics (NHH). Veibust will join Salmon Evolution during the second quarter of 2023.
Photo: CEO Trond Håkon Schaug-Pettersen (right) and new CFO Trond Vadset Veibust (left)
Norway
Operations
The Company has now been operating the Indre Harøy facility for almost 10 months, stocked four batches of smolt and fully harvested out batch 1 with very strong results, the latter being a major milestone for the Company.
Total batch 1 harvest volume ended at ~340 tonnes HOG with an average weight of ~3.75 kg HOG (~4.5 kg LW). The harvest was spread over ~1 month in 3 rounds from early November to early December which gives an effective production cycle of around 7-8 months since stocking. The harvest also showed a very homogeneous weight profile across the batch with a very tight spread in weights, despite the fact that batch 1 has not been graded on size since stocking. This is a clear indication of good feed distribution within the fish tanks.
Furthermore, the last harvesting round saw strong harvest weights with around 80% being above 4 kg HOG and less than 2% below 3 kg HOG. Total mortality for batch 1 ended at 5.8% and 4.0% if excluding customary first days in grow out facility.
The harvest also confirmed strong product quality, demonstrated by an industry leading superior share of 96%. This contributed to an average realized price for batch 1 of NOK 75/kg and NOK 78/kg for Superior 3+ kg HOG, representing a NOK ~3/kg premium to corresponding Nasdaq prices.
The first harvest was sold to a selected mix of customers, both in Norway and abroad and across different segments and channels. Our salmon has proven to be well suited for both conventional cooking, raw consumption and smoked and the feedback from customers has been very positive. Over the coming months the Company will continue to build on these experiences and relationships ahead of the planned increase in harvest volumes for the remainder of 2023.
During the fourth quarter another important milestone was reached when batch 2 was split in two and simultaneously graded on size using our highly automated fish logistics and distribution system. This operation went according to plan with minimal registered mortality. The good growth for batch 2 has continued and as per 31 January batch 2 had an average weight of around 2,375 grams consisting of one large group at ~2.6 kg and one smaller group at ~2.15 kg.
| Group biomass development | |||||||
|---|---|---|---|---|---|---|---|
| 31 December 2022 | 31 January 2023 | ||||||
| Batch | Units $($ #) | Weight (g) | Biomass (tonnes) |
Units $($ #) | Weight (g) | Biomass (fonnes) |
Comments |
| Batch #2 | ~228.000 | ~1,875 | 428 | ~228.000 | ~2,375 | 540 | Split into two groups with average weight of 2.6 kg and 2.15 kg, respectively |
| Batch #3 | ~200.000 | ~1555 | 112 | ~200.000 | ~1870 | 174 | Minimal mortality. Increasing appetite |
| Batch #4 | ~265.000 | $~10-360$ | 96 | ~265.000 | ~1550 | 145 | 4 th smolt release 6 December, Minimal mortality and increasing appetite |
| Total Indre Harøy | ~1000 | $-915$ | 637 | $-695,000$ | ~1,240 | 859 | |
| Smolt | ~2.305.000 | $~1 - 42$ | 96 | ~1025,000 | $~1 - 37$ | 111 | |
| Total Group | $-3,000,000$ | 733 | $-3.720,000$ | 970 |
During the fourth quarter the Company also released its third and fourth batch of smolt at Indre Harøy. Batch 3 was stocked in late October and comprised 200,000 smolt with an average weight of around 220 grams. Average weight now stands at ~870 grams following a good pickup in growth lately.
Batch 4 was stocked in early December and comprised 265,000 smolt with an average weight of around 260 grams, marking the Company first "full size" smolt release. As per 31 January 2023 the group had reached an average weight of ~550 grams. Going forward the Company plans to stock "full size" batches of smolt at Indre Harøy every second month.
Furthermore, the increase in biomass production continued in the fourth quarter with December seeing all-time high production despite batch 1 being fully harvested out early in the month. The positive trend has continued into 2023. As per 31 January the Group had a total standing biomass of 970 tonnes of which 111 tonnes at our smolt facility.
The Company continues to see very low mortality levels, even as the density levels are increasing. For batch 2 the accumulated mortality stood at 1.2% per 31 January 2023, clearly outperforming the levels seen for batch 1. For batch 3 and 4, mortality levels are even lower, demonstrating the benefits of having a controlled environment with minimal manual handling of the salmon.
The Company highlights that operations are still in an early stage and there is a continuous focus on tuning the systems to optimize the biological performance while at the same time reducing risk to a minimum. Such modification work will from time to time require pauses in feeding which also should be taken into consideration when evaluating the biological performance.
First harvest ready for shipment (December 2022)
Photo: Salmon Evolution
Project status - Indre Harøy phase 1
Indre Harøy phase 1 is expected to be completed during Q1 2023. All buildings and structural facilities are now completed and the construction work during the fourth quarter was centred around installation of equipment, piping, system integration and commissioning.
As of today most of the installation work and piping is completed and the main focus is now on testing and commissioning of the last tanks with corresponding technical rooms.
Currently, 8 out of 12 tanks have been handed over to the Company with the remaining 4 tanks to be handed over during February and March. This will allow for streamlining of the production process with two "production lines", each consisting of 6 tanks and where fish groups are regularity split and transferred to the next departments allowing for stocking of new batches in emptied tanks.
Indre Harøy phase 1 (December 2022)
Photo: Salmon Evolution
Project financials Indre Harøy phase 1
Indre Harøy phase 1 capex amounted to NOK 115m during the fourth quarter. In addition, NOK 13m of internal G&A including construction loan interest were capitalized.
As per 31 December 2022, accumulated capex from project initiation in 2019 amounted to NOK 1,578 million1). In addition, accumulated capitalized G&A including construction loan interest amounted to NOK 110 million (including capitalized finance costs).
The accumulated phase 1 capex to date of NOK 1,578m compares to previous guiding of phase 1 completion capex of NOK 1,560- 1,590m. With the project now being almost completed, the remaining phase 1 capex is expected to be moderate. The exact amount will depend on several factors, including finalization of contract settlements with suppliers, chosen de- and remobilization strategy between phase 1 and phase 2 and overall productivity during the remaining commissioning work.
Indre Harøy phase 2
Similar to the third quarter, the preparatory activities for phase 2 have continued during the fourth quarter with focus on implementing learning effects from phase 1, identifying savings and scaling effects from phase 1, defining a cooperation model designed at further optimizing the project management and develop a cost budget for phase 2.
Salmon Evolution is seeing clear signs of normalization in the construction market, evidenced by an increasing level of availability amongst various types of suppliers relevant for phase 2.
Salmon Evolution has made no contractual commitments as to phase 2, although the plan is to commence phase 2 in continuation to the completion of phase 1.
The Company has also completed the blasting works for the water intake station for both phase 2 and phase 3. The process went according to plan and gave valuable experience as to conducting heavy construction works while at the same time operating the phase 1 facility. The Company has also completed some blasting and excavation works for the fish tanks for phase 2 to verify that this would not negatively effect the ongoing farming operations. This also went according to plan with no negative biological effects observed.
Phase 2 preparatory activities are moderate from a financial perspective. Upon a final investment decision, the Company intends to structure the projects in a similar way as for phase 1, with financing reservations for the various subcontractors. Finally, when phase 2 is formally initiated, the first 6-9 months are relatively capex light.
1) Net of grants directly tied to capital expenditure and exclusive of internal capitalized G&A costs including construction loan interest
Indre Harøy phase 2 illustration
Illustration: Salmon Evolution
As part of the phase 2 project Salmon Evolution is also developing an expansion plan for our smolt facility so that the facility can serve the smolt needs for phase 2. This project is ongoing but as it is interlinked with our Indre Harøy phase 2 project, no investment decision will be taken before we formally decide to initiate phase 2 construction at Indre Harøy.
Phase 2 preparations – blasting work for future water intake stations completed (October 2022)
Photo: Salmon Evolution
Korea
Introduction to K Smart
The Company has a joint venture with the South Korean seafood giant Dongwon Industries where the plan is to develop, construct and operate a 16,800 tonnes HOG land-based salmon farming facility in South Korea, using Salmon Evolution's technology approach and competence.
The joint venture is named K Smart Farming ("K Smart"). The project will be completed in two phases, with each phase aiming to achieve an annual capacity of 8,400 tonnes HOG, 16,800 tonnes combined.
Under the terms of the Joint Venture agreement, Dongwon Industries will facilitate 75% debt financing for K-Smart's phase 1 project.
The parties have identified a production site in Yangyang on the northeast coastline of South Korea, with solid data points on water quality and temperatures. In addition, K Smart has also acquired an existing smolt facility in Jeongseon which will be upgraded and used for supplying
Project status
During the fourth quarter focus continued to be centred around design and engineering activities in cooperation with Billund Aquaculture as design partner.
Salmon Evolution now have 4 FTEs based in Korea and K Smart has established an organization located in the Dongwon head office in Seoul.
Significant progress has been made on the design for the smolt facility which is now set for 90% design review during Q1 2023. This review is expected to be followed by commencement of early construction works.
smolt to the grow out facility in Yangyang. The acquired smolt facility has been producing freshwater trout for many years.
Yangyang on-growing site
Jeongseon smolt site
Design work for the grow-out facility in Yangyang was intensified during the fourth quarter with focus on implementing learning effects from Indre Harøy alongside incorporating required site-specific changes.
K Smart is also working actively with the permitting processes and significant resources have been devoted to document the environmental effect of the project. Contrary to Norway, land-based salmon farming is a new industry in South Korea and regulatory processes takes time, but the company is continuing to experience strong support from both local, regional and national stakeholders and expect clarification on several key permits over the coming months, allowing for construction start of grow-out facility during 2023.
Illustration grow-out facility Yangyang
Illustration: Salmon Evolution
North America
Salmon Evolution has initiated a process with the aim of expanding its farming operations into North America and at the same time raising its production capacity target to 100,000 tonnes HOG by 2032.
Salmon Evolution continues to evaluate selected identified potential production sites in North America, both on the US and Canadian side of the border. As part of the site verification processes which include fatal flaws analyses of both water, biological, technical and regulatory aspects, the Company is currently in dialogue with various stakeholders, both public and private. The Company expects to use the next quarters for such site selection and initial site verifications.
It is expected that site verification and relevant regulatory approval processes will take around three years, allowing for construction start in 2025 or 2026, upon which the plan is to build a full scale 31.5 tonnes HOG "Indre Harøy" facility drawing on the experiences learned in both Norway and Korea.
To facilitate this expansion, the Company has established a dedicated team of both in-house and external resources. Additionally, the Company has incorporated a US corporate structure under its full ownership.
The Company's strategy of pursuing accretive partnerships in overseas markets remains unchanged. As the project develops, Salmon Evolution aims to engage in partnership structures leveraging the human capital in our Group and maximizing shareholder value.
Funding
Since 2020 the Company has secured both equity and debt financing on several occasions and Salmon Evolution is continuously seeking to optimize its capital structure.
In March 2021, the Company issued 83,333,333 shares at a subscription price of NOK 6.0 per share, raising gross proceeds of NOK 500 million.
The group further raised NOK 16.6m in new equity in August 2021 as part consideration for the acquisition of Kraft Laks.
In October 2021 the Company also carried out a private placement of USD 5m (NOK ~43m) towards Cargill.
Further, in April 2022 the Company carried out a private placement raising gross proceeds of NOK 300 million at a subscription price of NOK
Funding Indre Harøy Phase 1
On 29 June 2021, the Company announced the signing of legally binding loan documentation for a senior secured debt financing package of up to NOK 625 million related to the Phase 1 build out at Indre Harøy.
The debt financing package consists of the following credit facilities:
- NOK 525 million senior secured credit facility with Nordea and Sparebanken Vest which will be used to finance construction capex for Indre Harøy Phase 1 (the "Construction Facility")
- NOK 525 million in long-term debt which will refinance the Construction Facility upon completion of Indre Harøy Phase 1 and consisting of the following:
9.00 per share, bringing total raised equity to more than NOK 1.7 billion.
Development in paid-in equity (NOK million)
Source: Company data.
- o NOK 385 million senior secured term loan facility with Nordea and Sparebanken Vest (the "Term Loan Facility")
- o NOK 140 million in a separate long-term loan facility with Innovation Norway (the "IN Facility")
- NOK 100 million senior secured overdraft facility with Nordea (the "Overdraft Facility") which will be used for working capital purposes, hereunder financing of biomass and receivables
The Construction Facility and the Term Loan Facility are partly guaranteed by Eksfin.
As per 31 December 2022, NOK 495 million was drawn under the Construction Facility, leaving NOK 30 million undrawn. In addition, the Company has drawn NOK 30 million of the Overdraft Facility.
Funding Indre Harøy Phase 2
The Company is currently in advanced discussions with banks for debt financing of phase 2. The feedback from banks has been very positive and the Company expects both significantly higher leverage for phase 2 compared to phase 1 as well as improved overall terms and cost.
Funding K Smart Farming
The agreed funding structure of K Smart Farming is 25% equity and 75% debt, where Dongwon Industries is to facilitate debt financing at attractive cost levels (phase 1).
Funding Salmon Evolution Dale
At the date of the acquisition, Dale (formerly called Kraft Laks AS) had a net cash position with very limited financial debt. The NOK 35 million cash component of the purchase price was funded by cash at hand.
In December the Company announced that it had signed binding agreements for a debt financing package of NOK 52 million in relation to Salmon Evolution Dale. The Company deems the bank debt to be at favourable commercial terms, reflecting the solid operational and financial track record of Salmon Evolution Dale.
The bank debt package is split across three separate facilities and will be used as follows:
Salmon Evolution's total equity contribution into K Smart was initially estimated to about NOK 200 million on a fully funded basis, including phase 2. The equity contribution is split in milestone driven tranches where the Company executed its first tranche of NOK ~27 million in Q2 2021.
- General corporate purposes, hereunder financing of working capital
- Investments relating to facility upgrades
- Refinancing of existing NOK 25 million seller's credit with previous owners
As part of the Indre Harøy phase 2 build out, the Company plans to expand the capacity at Salmon Evolution Dale, into which parts of the April 2022 private placement proceeds is planned allocated. In such scenario further debt financing of Salmon Evolution Dale is expected.
As per 31 December 2022 about NOK 30m of the NOK 52m debt financing package was drawn.
Extending the ocean potential
Our Technology – Hybrid flow through system (HFS)
Salmon Evolution is founded on the belief that good biology equals good economy. This belief has been essential when developing the production methods and technology that are to be applied in the Company's land-based salmon farming facilities.
Salmon Evolution's chosen hybrid flow-through system (HFS) technology ensures rich access of fresh filtered seawater while at the same time reducing energy consumption by reusing around 65% of the water.
A reusage level of around 65% is in the Company's view a "sweet spot" balancing cost and operational risk. Higher reusage levels require the introduction of more filtration and water treatment and lead to an exponential increase in risk. On the other side, a low level of reusage leads to significantly higher energy costs in connection with pumping and heating of water.
At Indre Harøy the seawater intake is based on two inlet pipes at 25 meters and 95 meters, respectively, enabling the Company to tap into ideally tempered water and hence reducing energy costs relating to heating of seawater.
The water inlet is further filtered and treated with UV to eliminate parasites, sea lice, viruses, and particles. This ensures a rich flow of fresh and clean seawater into the fish tanks.
To ensure optimal biological and growth conditions in the fish tanks, oxygen and CO2 levels are constantly monitored and adjusted.
Each of Salmon Evolution fish tanks represents an individual biological zone, meaning that water in one tank never mixes with water in the other tanks. This again serves as a significant risk reducing measure in case of deceases etc. where a potential outbreak in one tank never can contaminate the fish swimming in the other tanks.
As part of Salmon Evolution commitment to a truly sustainable production and circular economy, waste is filtered and collected, before being transported to a recirculation plant where it is converted into fertilizer, biogas or similar.
Financial review
| (figures in NOK 1000) Note Q4 2022 Q4 2021 2022 2021 Revenue from contracts with customers 2 26,814 0 46,107 Other income 1,594 5 1,574 Total operating income 28,408 5 47,681 Cost of materials 4,5 -16,498 -681 -34,706 Change in inventory 4,5 8,587 2,223 34,077 Personnel expenses 12 -16,609 -6,918 -49,996 Other operating expenses -26,520 -6,228 -65,538 Operational EBITDA -22,631 -11,599 -68,481 Depreciations 3 -2,108 -819 -6,190 Operational EBIT -24,739 -12,418 -74,671 Fair value adjustment of biomass 4 2,868 0 11,740 Operating Profit (EBIT) -21,872 -12,418 -62,931 Financial income 7 17,648 3,389 35,322 Financial expense 7 -1,817 -2,069 -4,170 Share of net income from associated companies 7 -451 -660 -947 Financial expense - net 15,380 661 30,205 Profit/loss before tax 9 -6,492 -11,757 -32,726 Income tax expense 9 0 0 0 Change in deferred tax 0 0 0 Profit/loss for the period 10 -6,492 -11,757 -32,726 Basic earnings per share (NOK) 10 -0,02 -0,04 -0,10 -0,09 Diluted earnings per share (NOK) 10 -0,02 -0,04 -0,10 -0,09 Statement of Comprehensive Income Profit/(loss) for the period -6,492 -11,757 -32,726 Exchange difference on translating foreign operation 7,8 865 25 1,363 Total comprehensive income for the period -5,626 -11,732 -31,362 |
Summary of result | |||
|---|---|---|---|---|
| 12,047 | ||||
| 209 | ||||
| 12,257 | ||||
| -2,610 | ||||
| 1,702 | ||||
| -21,067 | ||||
| -25,894 | ||||
| -35,612 | ||||
| -2,229 | ||||
| -37,841 | ||||
| 0 | ||||
| -37,841 | ||||
| 12,852 | ||||
| -7,335 | ||||
| -634 | ||||
| 4,884 | ||||
| -32,957 | ||||
| -1,026 | ||||
| 7,539 | ||||
| -26,444 | ||||
| -26,444 | ||||
| -560 | ||||
| -27,004 |
Q4 2022 results
The Group generated total operating revenues of NOK 28.4 million in the fourth quarter of 2022. There were no revenues in the same period last year.
Personnel expenses for the quarter totalled NOK 16.6 million. During the quarter approximately
16% of the total personnel expenses were capitalized and allocated to the building project at Indre Harøy.
Other operating expenses totalled to NOK 26.5 million during the quarter and consisted mainly of operating expenses at our facilities in Dale
and Indre Harøy, costs related to the establishment in North America, consultancy and legal fees, and other administration expenses.
After fair value adjustment related to the biomass (NOK 2.9 million), operating loss for the period ended at NOK 21.9 million.
Costs deemed to be part of the ongoing assets under construction are capitalized consecutively throughout the year.
Full year 2022 results
Total revenues for 2022 accumulates to NOK 47.7 million for the Group. The revenues are directly related to both the sale of smolt from Salmon Evolution Dale to an external client and sale of salmon from Indre Harøy.
Personnel expenses as per 31 December 2022 sums up to NOK 50.0 million. Year-to-date approximately 32% of the total personnel expenses are capitalized and allocated to the building project at Indre Harøy.
Other operating expenses totalled NOK 65.5 million, which is NOK 39.6 million higher than for the same period last year. The increase reflects the higher activity level in the Company, continued operating expenses at Indre Harøy and South Korea, the establishment in North Net financials for the quarter were positive at NOK 15.4 million, where most of the effect is related to unrealized changes in value of interest rate swaps and power supply contract.
Loss for the quarter was NOK 6.5 million.
Salmon Evolution's share of K Smart's net income is recognized in the profit and loss statement. The investment in K Smart is accounted for using the equity method where K Smart is regarded as an associated company.
America, alongside, and other administration expenses.
Year-to-date the Company has made fair value adjustments of the biomass of NOK 11.7 million leaving an operating profit for the full year at NOK -62.9 million.
Total depreciations were NOK 6.2 million and net financials was positive with NOK 30.2 million, including unrealized changes in value of both interest rate swaps and the power supply contract, in total NOK 25.5 million.
Loss before tax was NOK 32.7 million as per 31 December 2022.
Assets under construction are not depreciated.
Cash flow
Consolidated net cash flow from operating activities was NOK -54.6 million in the fourth quarter of 2022 compared to NOK -55.0 million for the same period last year.
Net cash flow from investment activities was NOK -194.3 million during the fourth quarter, and NOK -806.0 million for 2022 in total.
Cash flow from financing activities during the quarter was NOK 70.5 million, which mainly consist of drawdowns on the Construction facility and overdraft facilities.
Total net cash flow during the fourth quarter was NOK -178.4 million. The liquidity position at the end of the period was strong, with cash and cash equivalents of NOK 278.8 million and total available liquidity of NOK 400 million including committed undrawn credit facilities.
Cash flow summary
| (figures in NOK 1000) | Q4 2022 | Q4 2021 | 2022 | 2021 |
|---|---|---|---|---|
| Net cash flow from operating activities | -54 554 | -54 993 | -69 368 | -67 376 |
| Net cash flow from investments activities | -194 270 | -214 292 | -805 971 | -754 553 |
| Net cash flow from financing activities | 70 462 | 198 076 | 648 554 | 679 668 |
| Net change in cash and cash equivalents | -178 361 | -71 209 | -226 785 | -142 261 |
| Cash and cash equivalents at start of period | 457 120 | 576 753 | 505 545 | 647 806 |
| Cash and cash equivalents at end of period | 278 759 | 505 545 | 278 759 | 505 545 |
Financial position
The carrying amount of Salmon Evolution's total fixed assets as of 31 December 2022 was NOK 1,860 million, compared to NOK 1,079 million 31 December 2021. Fixed assets are mainly related to the construction work at Indre Harøy, comprising capitalized costs related to both personnel expenses and construction cost, land acquisition and Dale smolt facility as well other smaller items.
Total equity amounted to NOK 1,564 million. With total assets of NOK 2,305 million, this corresponds to an equity ratio of 68%. Consolidated interestbearing liabilities totalled NOK 582 million.
In October 2020, Salmon Evolution was granted NOK 14 million in funding from the Norwegian tax incentive scheme Skattefunn. The incentive scheme will be distributed over a three-year period and is designed to stimulate research and development (R&D).
Furthermore, in November 2020 the Company was granted NOK 96.8 million in a funding commitment from ENOVA. The commitment is a cash grant, and the funding will not require any material additional investment needs from Salmon Evolution. The proceeds from this grant is expected paid out in tranches over the course of Indre Harøy Phase 1 development.
Balance sheet as per 31.12.2022 (NOK million)
Both grants are recognized in the financial accounts as a reduction of fixed assets. As of Q4 2022 the Company has recognized NOK 14.3 million in Skattefunn grants and NOK 96.8 million in Enova grants of which NOK 9.5 million and NOK 77.1 million have been received by 31 December 2022, respectively.
As per 31 December 2022 the Company had bank debt of NOK 556 million, mainly relating to the Construction Facility for Indre Harøy. For further description of the financing package see section "Funding" above.
Subsequent events
Strengthening the executive management team
In January 2023 Trond Håkon Schaug-Pettersen was appointed CEO of the Company. Schaug-Pettersen was appointed CFO of Salmon Evolution in October 2020 and has since October 2022 also held the position as interim CEO.
The Company also appointed Trond Vadset Veibust (37) as new CFO. Veibust comes from Ekornes where he has been for 8 years, of which for the last 3 years as a member of the executive management. Veibust will join Salmon Evolution during the second quarter of 2023.
Transactions with related parties
During the ordinary course of business, the Company may engage in certain arm's length transactions with related parties.
There were no material transactions with related parties as per 31 December 2022.
Share information
As per 31 December 2022 Ronja Capital II AS was the Company's largest shareholder with 27,393,242 shares, corresponding to 7.9% of the total number of shares outstanding. The 20 largest shareholders held 56.9% of the shares in the Company.
The closing price for the Company's share was NOK 8.27 per share as per 31 December, which corresponded to a market capitalization of NOK ~2.9 billion.
During the quarter the average daily, traded volume was about 590,000 shares and the average daily traded value was about NOK 5.1 million (Oslo Børs).
Salmon Evolution ASA was listed on Oslo Børs on 9 July 2021.
| Shareholder | # of shares | % share |
|---|---|---|
| Ronja Capital II AS | 27 393 242 | 7,9 % |
| The Bank of New York Mellon SA/NV | 22 310 787 | 6,5 % |
| Farvatn Private Equity AS | 17 649 433 | 5,1 % |
| Dongwon Industries Co. Ltd | 16 044 572 | 4,6 % |
| Rofisk AS | 14 537 897 | 4,2 % |
| Stette Invest AS | 11 569 338 | 3,3 % |
| Kjølås Stansekniver AS | 11 207 738 | 3,2 % |
| J.P. Morgan SE | 8 141 141 | 2,4 % |
| Mevold Invest AS | 7 994 252 | 2,3 % |
| Lyngheim Invest AS | 7 810 734 | 2,3 % |
| Jakob Hatteland Holding AS | 7 441 374 | 2,2 % |
| Ewos AS | 7 418 309 | 2,1 % |
| Bortebakken AS | 7 301 134 | 2,1 % |
| Verdipapirfondet Dnb Norge | 5 717 376 | 1,7 % |
| Nordnet Livsforsikring AS | 5 278 862 | 1,5 % |
| Verdipapirfondet DNB SMB | 4 685 346 | 1,4 % |
| VPF DNB Norge Selektiv | 4 518 643 | 1,3 % |
| Salmoserve AS | 3 782 921 | 1,1 % |
| CACEIS Bank | 3 033 333 | 0,9 % |
| Småge Eiendom AS | 2 788 245 | 0,8 % |
| Total 20 largest shareholders | 196 624 677 | 56,9 % |
| Other shareholders | 149 130 145 | 43,1 % |
| Total number of shares | 345 754 822 | 100,0 % |
| Source: VPS, Company |
20 largest shareholders 31 December 2022
Risk and uncertainties
As described in the Annual Report for 2021, Salmon Evolution's business activities entail exposure to various types of risk, including risk related to project, market-, operational- and financial development. The Group's internal controls and risk exposure are subject to continuous monitoring and improvement, and efforts to reduce risk in different areas have a high priority. Below is a summary of some of the risks facing the Company.
Operational risk
The greatest operational risk relates to biological developments within the Group's aquaculture operations. Land-based salmon farming is a new industry and is subject to inherent risk by being an industry in the development phase, as well as the risk that the Company's commercialization strategy may fail. The Company is vulnerable to errors in technology, production equipment and maintenance routines.
Further, challenges or incidents in connection with the upcoming production ramp up could also have adverse effects for the Company's ability to realize its business plan.
Project risk
Successful project execution and construction are decisive for the Company's business and comes with numerous risks, including risk for delays or cost overruns.
Due to the size of these construction projects, any material delay or cost overrun could have adverse effects for the Company's ability to realize its business plan. The chosen entrepreneur for the construction project at Indre Harøy, Artec Aqua, has limited legal liability for cost overruns and delays.
Market risk
Having entered the operational phase, the Groups is exposed to the general development of salmon prices. Although salmon prices have remained strong, costs are also increasing. As of 31 December 2022, the Company has not entered into any hedging programs to reduce market risk.
Furthermore, the Group is exposed to changes in market prices for the input factors used in the production process, in particular feed prices and electricity prices. As to the latter, the Group has entered into hedging agreements for most of its expected electricity needs for 2023.
Interest Rate risk
The Group's interest rate risk relates primarily to borrowings from financial institutions with variable interest rates. Currently, the Group has entered into hedging programs to reduce this risk for only parts of its planned borrowings, thus the Group remains exposed to changes in the interest rate. As of 31 December 2022, outstanding loans from credit institutions amounted to NOK 556 million (excluding financial leasing).
Foreign Currency risk
The Group's foreign currency risk relates to the Group's operating, investing and financing activities denominated in a foreign currency. This includes the Group's revenues, expenses and capital expenditures. From time to time the group utilizes financial instruments to hedge its currency exposure.
The Group's presentation currency is Norwegian Kroner ("NOK").
Credit risk
With respect to credit risk arising from the financial assets of the Group, which comprise cash and cash equivalents, and other receivables, the Group's exposure to credit risk arises from default of the relevant counterparty, with a maximum exposure equal to the carrying amount of these instruments. This risk is not considered to be material.
Liquidity risk
Management monitors rolling forecasts of the Group's liquidity reserve (comprising cash and cash equivalents) based on expected cash flows. The Group's business plan and growth strategy is capital intensive, and the Group may be dependent upon future equity issues and/or debt financing in order to finance its current and long-term plans.
Summary and Outlook
2022 was a step change year for Salmon Evolution starting with the batch 1 smolt release in March as per the original timeline and rounded off by fully harvesting out our first batch with excellent results. Through this great achievement the Company has demonstrated that it is possible to produce salmon on land, all the way to full harvest weight, at an industrial scale, with strong biological performance and with the end result being an excellent quality product.
Throughout 2022 the Company has been gradually ramping up production and a total of four batches have been stocked at Indre Harøy of which the last one in December being a "full size" batch. The next smolt release is scheduled for February and throughout 2023 the Company will release smolt every second month ensuring that the regularity in harvest volumes will gradually increase over the coming quarters.
Batch 2 is planned harvested during the second quarter and from late Q3 2023 the Company expects to reach steady state production levels, yielding an annualized production of 7,900 tons HOG from Indre Harøy phase 1.
The Company is very satisfied with the biological results seen in 2022 and see the results achieved as a clear proof of concept as to the assumptions in our production plan. Although taking a facility like this into operation is a huge task that involve a lot of learning and tuning in the beginning, the biological performance has exceeded expectations. Furthermore, the Company is satisfied to see that the mortality levels have been very low, with the latest batches even outperforming both batch 1 and 2.
Batch 1 was harvested in three rounds from early November to early December, after only 7-8 months of production. The salmon was distributed worldwide to selected customers and partners in different segments and channels. The Company has received strong feedback as to the product quality which was also confirmed by an industry leading superior share of 96% for batch 1 as a whole. Furthermore, the harvest demonstrated that our salmon is well suited for both conventional cooking, raw consumption and smoked production. This creates a lot of flexibility for our downstream operations as we gradually increase harvest volumes over the coming quarters.
Total Norwegian exports of salmon during Q4 2022 was 425,000 tons compared to 431,000 tons in Q3 2021, a decrease of 1.4%. For 2022 as a whole, total exports ended at 1,441,000 tons compared to 1,478,000 tons in 2021, a decrease of 2.5%.
Average Fishpool salmon price in 2022 was NOK 83.2/kg compared to NOK 58.3/kg in 2021, an increase of 43% year on year. Such significant price increase clearly demonstrates the strong underlying demand for salmon. Going into 2023 prices have remained strong and forward prices for 2023 point to record high prices also this year. The Company also notes that airfreight costs for in particular the Asian market has been at elevated levels following the pandemic and war in Ukraine, resulting substantially higher salmon prices locally, e.g. in South Korea.
Going into 2023 most analysts expect low single digit global supply growth which should support a scenario with strong salmon prices. With Salmon Evolution now in the process of ramping up production, the Company should be in a good position to benefit from this over the course of 2023.
Looking further ahead, the Company continues to see a significant demand growth potential for salmon and the Company remains firm in its belief that land-based farming will need to play
an important role alongside conventional farming for the industry to be able utilize the demand potential.
After almost one year of successful farming operations and with phase 1 expected to be completed during the first quarter, the Company is in a unique position to execute on its growth plan and solidifying its position as the global leader within land-based salmon farming.
First harvest successfully completed (November 2022)
Photo: Salmon Evolution
Responsibility Statement
Responsibility statement in connection with interim management report by the Board of Directors and CEO of Salmon Evolution ASA.
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 31 December 2022 has been prepared in accordance with IAS 34 – Interim Financial Reporting and gives a true and fair view of the Company's and group's assets, liabilities, financial position and profit or loss as a whole. We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the period and their impact on the condensed set of financial statements, a description of the principal risks and uncertainties facing the group, and major related parties' transactions.
The Board of Directors of Salmon Evolution ASA Aalesund/Molde 07 February 2022
Tore Tønseth Chair
Peder Stette Director
Anne Breiby Director
Ingvild Vartdal Director
Janne-Grethe Strand Aasnæs Director
Glen Allan Bradley Director
Eunhong Min Director
Håkon André Berg Director
Trond Håkon Schaug-Pettersen CEO
Interim financial statements (IFRS)
Statement of Profit and Loss
| Summary of result | |||||
|---|---|---|---|---|---|
| (figures in NOK 1000) | Note | Q4 2022 | Q4 2021 | 2022 | 2021 |
| Revenue from contracts with customers | 2 | 26,814 | 0 | 46,107 | 12,047 |
| Other income | 1,594 | 5 | 1,574 | 209 | |
| Total operating income | 28,408 | 5 | 47,681 | 12,257 | |
| Cost of materials | 4,5 | -16,498 | -681 | -34,706 | -2,610 |
| Change in inventory | 4,5 | 8,587 | 2,223 | 34,077 | 1,702 |
| Personnel expenses | 12 | -16,609 | -6,918 | -49,996 | -21,067 |
| Other operating expenses | -26,520 | -6,228 | -65,538 | -25,894 | |
| Operational EBITDA | -22,631 | -11,599 | -68,481 | -35,612 | |
| Depreciations | 3 | -2,108 | -819 | -6,190 | -2,229 |
| Operational EBIT | -24,739 | -12,418 | -74,671 | -37,841 | |
| Fair value adjustment of biomass | 4 | 2,868 | 0 | 11,740 | 0 |
| Operating Profit (EBIT) | -21,872 | -12,418 | -62,931 | -37,841 | |
| Financial income | 7 | 17,648 | 3,389 | 35,322 | 12,852 |
| Financial expense | 7 | -1,817 | -2,069 | -4,170 | -7,335 |
| Share of net income from associated companies | 7 | -451 | -660 | -947 | -634 |
| Financial expense - net | 15,380 | 661 | 30,205 | 4,884 | |
| Profit/loss before tax | 9 | -6,492 | -11,757 | -32,726 | -32,957 |
| Income tax expense | 9 | 0 | 0 | 0 | -1,026 |
| Change in deferred tax | 0 | 0 | 0 | 7,539 | |
| Profit/loss for the period | 10 | -6,492 | -11,757 | -32,726 | -26,444 |
| Basic earnings per share (NOK) | 10 | -0,02 | -0,04 | -0,10 | -0,09 |
| Diluted earnings per share (NOK) | 10 | -0,02 | -0,04 | -0,10 | -0,09 |
| Statement of Comprehensive Income | |||||
| Profit/(loss) for the period | -6,492 | -11,757 | -32,726 | -26,444 | |
| Exchange difference on translating foreign | |||||
| operation | 7,8 | 865 | 25 | 1,363 | -560 |
| Total comprehensive income for the period | -5,626 | -11,732 | -31,362 | -27,004 |
Statements of financial position
| (figures in NOK 1000) | Note | 31 Dec 2022 | 31 Dec 2021 |
|---|---|---|---|
| Assets | |||
| Intangible assets | 3 | 65,149 | 62,586 |
| Deferred tax assets | 9 | 1,026 | 1,026 |
| Assets under construction | 1,3 | 1,713,490 | 971,122 |
| Property, plant & equipment | 3 | 30,541 | 15,601 |
| Right-of-use assets | 3 | 13,001 | 2,112 |
| Investment in associated companies | 8 | 26,635 | 26,219 |
| Total non-current assets | 1,859,843 | 1,078,664 | |
| Inventory | 4 | 60,867 | 15,050 |
| Trade receivables | 23,080 | 382 | |
| Other current receivables | 66,951 | 104,724 | |
| Financial derivatives | 7 | 25,622 | 1,538 |
| Cash and cash equivalents | 278,759 | 505,545 | |
| Total current assets | 445,280 | 627,239 | |
| Total assets | 2,305,122 | 1,705,903 | |
| Equity and liabilities | |||
| Share capital | 11 | 17,288 | 15,540 |
| Share premium | 11 | 1,627,073 | 1,334,283 |
| Other reserves | 12 | 8,320 | 5,118 |
| Other equity | 0 | 0 | |
| Uncovered losses | -88,774 | -57,411 | |
| Total equity | 1,563,906 | 1,297,530 | |
| Long-term interest-bearing debt | 6 | 513,169 | 212,352 |
| Lease liabilities - long term | 6 | 9,676 | 892 |
| Other long-term liabilities | 6 | 8,549 | 7,976 |
| Total non-current liabilities | 531,393 | 221,221 | |
| Short-term interest-bearing debt | 6 | 55,353 | 13,086 |
| Trade payables | 135,098 | 162,071 | |
| Social security and other taxes | 6,035 | 4,946 | |
| Lease liabilities - short term | 6 | 3,553 | 1,236 |
| Other short-term liabilities | 9,783 | 5,812 | |
| Total current liabilities | 209,822 | 187,152 | |
| Total liabilities | 741,216 | 408,373 | |
| Total equity and liabilities | 2,305,122 | 1,705,903 |
Statement of cash flow
| Cash flow from operations Profit before income taxes -6,492 -12,085 -32,726 Adjustments for: Depreciation 2,108 819 6,190 2,229 Net finance -15,380 -992 -30,205 -4,884 Share based payment expenses 12 -675 0 3,201 1,624 Gain on lease modification 0 66 Changes in working capital: Change in trade receivables -21,257 0 -22,698 |
(figures in NOK 1000) | Note | Q4 2022 | Q4 2021 | 2022 | 2021 |
|---|---|---|---|---|---|---|
| -32,957 | ||||||
| -382 | ||||||
| Change in other current receivables | -14,642 | -51,786 | 37,774 | -29,217 | ||
| Change in inventory -11,455 -2,223 -45,817 |
-1,702 | |||||
| Change in trade payables 4,531 7,389 2,047 |
-684 | |||||
| Change in social security and other taxes 1,910 895 1,089 |
-4,387 | |||||
| Change in other current liabilities 2,778 1,998 3,971 |
3,584 | |||||
| Cash generated from operations -58,575 -55,985 -77,175 |
-66,710 | |||||
| Financial expenses paid -6,421 -2,069 -15,079 |
-11,980 | |||||
| Financial income received 10,442 3,061 22,886 |
11,315 | |||||
| Net cash flow from operations -54,554 -54,993 -69,368 |
-67,376 | |||||
| Cash flow from investment activities | ||||||
| Payments for fixed assets and other capitalizations 3 -143,411 -228,635 -805,388 |
-797,959 | |||||
| Payments for intangible assets 3 -1,438 -3,374 -2,564 |
-881 | |||||
| Acquisitions 0 0 0 |
-27,249 | |||||
| Change in trade payables investments -49,421 16,926 -29,020 |
98,315 | |||||
| Investment in associated companies 0 791 0 |
-26,779 | |||||
| Net cash flow from investment activities -194,270 -214,292 -805,971 |
-754,553 | |||||
| Cash flow from financing activities | ||||||
| Proceeds from issue of equity 0 43,841 294,538 |
517,868 | |||||
| Proceeds from new borrowings 6 68,027 157,976 356,253 |
202,600 | |||||
| Repayment of borrowings 0 -200 -13,337 |
-40,800 | |||||
| Repayment of lease liabilities 2,435 -3,542 11,099 |
0 | |||||
| Net cash flow from financing activities 70,462 198,076 648,554 |
679,668 | |||||
| Net change in cash and cash equivalents -178,361 -71,209 -226,785 |
-142,261 | |||||
| Cash and cash equ. at the beginning of the period 457,120 576,753 505,545 |
647,806 | |||||
| Cash and cash equ. at the end of the period 278,759 505,545 278,759 |
505,545 |
Statement of Changes in Equity
| Share | Share | Other | Other | Uncovered | ||
|---|---|---|---|---|---|---|
| (figures in NOK 1000) | capital | premium | reserves | equity | losses | Total equity |
| Balance at 1 January 2021 | 10 987 | 804 369 | 2 974 | 520 | -30 407 | 788 442 |
| Profit/loss for the period | 0 | 0 | 0 | 0 | -26 444 | -26 444 |
| Other comprehensive income | 0 | 0 | 0 | 0 | -560 | -560 |
| Total comprehensive income | 0 | 0 | 0 | 0 | -27 004 | -27 004 |
| Capital increase 18 March 2021 | 4 167 | 495 833 | 0 | 0 | 0 | 500 000 |
| Capital increase 18 March 2021, transaction costs | 0 | -24 850 | 0 | 0 | 0 | -24 850 |
| Company registration expenses | 0 | -6 | 0 | 0 | 0 | -6 |
| Private placement, 18 August 2021 | 110 | 16 490 | 0 | 0 | 0 | 16 600 |
| Private placement, 22 October 2021 | 277 | 42 447 | 0 | 0 | 0 | 42 724 |
| Share options issued | 0 | 0 | 1 624 | 0 | 0 | 1 624 |
| Share options exercised | 0 | 0 | 520 | -520 | 0 | 0 |
| Transactions with owners | 4 553 | 529 914 | 2 144 | -520 | 0 | 536 092 |
| Balance at 31 Dec 2021 | 15 540 | 1 334 282 | 5 118 | 0 | -57 411 | 1 297 530 |
| Balance at 1 January 2022 | 15 540 | 1 334 282 | 5 118 | 0 | -57 411 | 1 297 530 |
| Profit/loss for the period | 0 | 0 | 0 | 0 | -32 726 | -32 726 |
| Other comprehensive income | 0 | 0 | 0 | 0 | 1 363 | 1 363 |
| Total comprehensive income | 0 | 0 | 0 | 0 | -31 362 | -31 362 |
| Private placement, 5 April 2022 | 1 129 | 202 041 | 0 | 0 | 0 | 203 169 |
| Private placement, 2 May 2022 | 538 | 96 293 | 0 | 0 | 0 | 96 831 |
| Private placement, transaction costs | 0 | -13 267 | 0 | 0 | 0 | -13 267 |
| Share options issued | 0 | 0 | 3 201 | 0 | 0 | 3 202 |
| Share options exercised | 81 | 7 724 | 0 | 0 | 0 | 7 805 |
| Transactions with owners | 1 748 | 292 791 | 3 201 | 0 | 0 | 297 740 |
| Balance at 31 Dec 2022 | 17 288 | 1 627 073 | 8 320 | 0 | -88 774 | 1 563 906 |
Selected notes to the quarterly financial statements
Note 1 – Summary of significant accounting policies
General information
Salmon Evolution ASA and its subsidiaries, Salmon Evolution Norway AS, Salmon Evolution International AS, Salmon Evolution Dale AS and Salmon Evolution Sales AS (the "Company", "SE" or "the Group") is a Norwegian business headquartered in Hustadvika kommune in Møre og Romsdal. SE is building a land-based salmon farming facility at Indre Harøy, with a planned annual production of 31,500 tons HOG of which phase 1 currently under construction has a planned annual production of 7,900 tons HOG.
The build-out consists of three phases, with the first phase consisting of 12 large grow out tanks with corresponding infrastructure. SE will
Consolidation
These condensed consolidated statements for the period ended 31 December 2022 include Salmon Evolution ASA together with its subsidiaries Salmon Evolution Norway AS, Salmon Evolution International AS, Salmon Evolution Sales AS and Salmon Evolution Dale AS. Please note that the comparable previous financial statement periods only include
Basis of preparation
These interim financial statements have been prepared in accordance with International Accounting Standard 34, "Interim financial reporting". These interim financial statements do not provide the same scope of information
Going concern
The Group has adopted the going concern basis in preparing its consolidated financial statements. When assessing this assumption, management has assessed all available operate a hybrid flow-through (HFS) system, utilizing fresh seawater from the Norwegian coast. Construction start of phase 1 was in Q2 2020 with expected completion in Q1 2023. The first smolt batch was released at Indre Harøy late March 2022 as per original timeline, and the Group completed its first harvest in November 2022.
These interim financial statements were approved by the Board of Directors for issue on 07 February 2022.
These interim financial statements have not been audited.
Salmon Evolution Dale AS from August 2022 and do not include Salmon Evolution Sales AS.
In 2022 the Group established two new companies – Salmon Evolution North America Holdings LLC and Salmon Evolution North America LLC. Both companies are wholly owned by Salmon Evolution, but the legal entities had no activity during 2022.
as the annual financial statement and should therefore be read in conjunction with the annual financial statements for the year ended 31 December 2021, which have been prepared in accordance with IFRS.
information about the future. This comprises information about net cash flows from existing customer contracts and other service contracts, debt service and obligations. After
making such assessments, management has a reasonable expectation that the Group has adequate resources to continue its
Accounting policies
The accounting policies adopted are consistent with those of the previous financial year except that income tax expense is recognized in each interim period using the expected weighted average annual income tax rate for the full financial year. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss. The Group does not include net deferred tax benefits in its balance that exceeds the tax effect of group contributions in order to equalize tax payable in its subsidiaries.
Straight-line depreciation is applied over the useful life of property, plant, and equipment
Biological assets
Biological assets are, in accordance with IAS 41, measured at fair value unless the fair value cannot be measured reliably. For salmon in the grow-out facility, a present value model is
Borrowing costs
In accordance with IAS 23, the Group's loan agreements are subject to the following principles relating to borrowing costs:
General and specific borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is operational existence for the foreseeable future.
based on the asset's historical cost and estimated residual value at disposal. Depreciation is charged to expense when the property, plant or equipment is ready for intended use or placed in service. As per 31.12.2022 the Company is still in a test- and verification phase for its Indre Harøy facility and the facility is therefore not deemed ready for intended use. As such, assets under construction are not depreciated.
On the same note, all operating income is associated to the fact that the Company is still in a test-phase for its only operating facility.
applied to estimate the fair value. For roe, fry and smolt, historical cost is deemed to provide the best estimate of fair value, and hence applied. For further information, please refer to note 4.
required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Other borrowing costs are expensed in the period in which they are incurred.
Note 2 – Segment
The Group has from Q4 2022 implemented segment reporting which consists of production of farmed salmon in Norway (Farming Norway), other activities, and Eliminations. The segment performance is monitored in order to assess performance and profitability at a strategic level.
The same accounting principles as described in Note 1 have been applied for the segment reporting, where intern transactions are entered into under normal commercial terms and conditions.
| (In thousand NOK) | Farming Norway | Other | Eliminations | Group |
|---|---|---|---|---|
| Q4 2022 | ||||
| Operating revenue | 26 814 | 6 872 | -5 279 | 28 408 |
| Operational EBITDA | -9 432 | -13 200 | 0 | -22 631 |
| Operational EBIT | -10 692 | -14 048 | 0 | -24 739 |
| Harvested volum (tonnes, HOG) | 340 | 340 | ||
| Operational EBITDA/kg (NOK) | -27,7 | -66,6 | ||
| Operational EBIT/kg (NOK) | -31,4 | -72,8 | ||
| Q4 2021 | ||||
| Operating revenue | 5 | |||
| Operational EBITDA | -11 599 | |||
| Operational EBIT | -12 418 | |||
| Harvested volum (tonnes, HOG) | ||||
| Operational EBITDA/kg (NOK) | ||||
| Operational EBIT/kg (NOK) | ||||
| FY 2022 | ||||
| Operating revenue | 47 681 | |||
| Operational EBITDA | -68 481 | |||
| Operational EBIT | -74 671 | |||
| Harvested volum (tonnes, HOG) | ||||
| Operational EBITDA/kg (NOK) | ||||
| Operational EBIT/kg (NOK) | ||||
| FY 2021 | ||||
| Operating revenue | 12 257 | |||
| Operational EBITDA | -35 612 | |||
| Operational EBIT | -37 841 | |||
| Harvested volum (tonnes, HOG) | ||||
| Operational EBITDA/kg (NOK) | ||||
| Operational EBIT/kg (NOK) |
Note 3 – Property, plant and equipment
| Intangible | Assets under | Fixtures and | Right-of-use | |||
|---|---|---|---|---|---|---|
| (figures in NOK 1000) | assets | construction | Buildings | fittings | assets | Total |
| Cost 1 January 2021 | 432 | 219 926 | 0 | 739 | 1 918 | 223 015 |
| Additions | 62 154 | 751 196 | 7 607 | 8 227 | 2 079 | 831 263 |
| Disposals | ||||||
| Cost 31 December 2021 | 62 586 | 971 122 | 7 607 | 8 966 | 3 997 | 1 054 278 |
| Accumulated depreciation 1 January 2021 | 0 | 0 | 0 | -107 | -521 | -628 |
| Depreciation for the period | 0 | 0 | -302 | -563 | -1 364 | -2 229 |
| Net book value 31 December 2021 | 62 586 | 971 122 | 7 305 | 8 296 | 2 112 | 1 051 420 |
| Intangible | Assets under | Fixtures and | Right-of-use | |||
|---|---|---|---|---|---|---|
| (figures in NOK 1000) | assets | construction | Buildings | fittings | assets | Total |
| Cost 1 January 2022 | 62 586 | 971 122 | 7 607 | 8 966 | 3 997 | 1 054 277 |
| Additions | 2 564 | 742 368 | 0 | 17 453 | 14 566 | 776 951 |
| Disposals | ||||||
| Cost 31 December 2022 | 65 149 | 1 713 490 | 7 607 | 26 419 | 18 562 | 1 831 228 |
| Accumulated depreciation 1 January 2022 | 0 | 0 | -302 | -670 | -1 885 | -2 857 |
| Depreciation for the period | 0 | 0 | -649 | -1 864 | -3 676 | -6 189 |
| Net book value 31 December 2022 | 65 149 | 1 713 490 | 6 656 | 23 885 | 13 001 | 1 822 182 |
Straight-line depreciation is applied over the useful life of property, plant, and equipment based on the asset's historical cost and estimated residual value at disposal. Depreciation is charged to expense when the property, plant or equipment is ready for use or placed in service.
As per 31.12.2022 the Company is still in a test- and verification phase for its Indre Harøy facility and the facility is therefore not deemed ready for intended use. As such, assets under construction are not depreciated.
Assets under construction per 31 December 2022 consisted mainly of capitalised costs related to the turnkey project with Artec Aqua for building a land-based salmon farming facility at Indre Harøy, Møre og Romsdal.
Note 4 – Biological assets and inventory
Biological assets are, in accordance with IAS 41, measured at fair value unless the fair value cannot be measured reliably. For salmon in the grow-out facility, a present value model is applied to estimate the fair value. For roe, fry and smolt, historical cost is deemed to provide the best estimate of fair value, and hence applied.
The fair value of fish in the grow-out facility is calculated by multiplying the estimated biomass at the time of harvest with the estimated sales price at the same time and deducted for estimated costs to sell. For fish not ready for harvest, remaining production costs to grow the fish to harvest weight are deducted. The cash flow is further discounted by a discount rate taking into account both risk adjustment and time value.
The Group considers that fish greater than 4.6 kg is ready for harvest (about 3.8 kg gutted weight), and such fish is thus classified as harvestable fish. Fish that have not achieved this weight are classified as non-harvestable.
The estimated biomass volume is based on the actual number of individuals in the grow-out departments on the balance sheet date, adjusted for projected mortality up to harvest time and multiplied with the estimated harvest weight per individual at harvest time.
Sales price for the fish in the grow-out facility is based on forward prices from Fish Pool with relevant adjustments. For Q2 2023 a discount of NOK 10/kg is applied due to high uncertainty in the contract market following the Norwegian Government's proposed resource tax. The net sales value is adjusted for expected quality differences and harvesting, logistic and sales expenses.
| NOK 1000 | |||||||
|---|---|---|---|---|---|---|---|
| BOOK VALUE OF INVENTORY | Q4 2022 | Q2 2022 | Q4 2021 | ||||
| Raw materials | 1,941 | 1,112 | 112 | ||||
| Biological assets | 58,927 | 19,002 | 14,939 | ||||
| Finished goods | - | - | - | ||||
| Total | 60,867 | 20,114 | 15,050 |
| TONNES | |||||||
|---|---|---|---|---|---|---|---|
| BIOLOGICAL ASSETS | Q4 2022 | FY 2022 | Q4 2021 | FY 2021 | |||
| Biological assets beginning of period | 625 | 182 | 144 | 101 | |||
| Increase due to production | 525 | 1,131 | 38 | 173 | |||
| Reduction due to harvest/sale | -417 | -580 | - | -93 | |||
| Reduction due to incident based mortality | - | - | - | - | |||
| Fair value adjustment beginning of period | N/A | N/A | N/A | N/A | |||
| Fair value adjustment end of period | N/A | N/A | N/A | N/A | |||
| Biological assets end of period | 733 | 733 | 182 | 182 |
| NOK 1000 | |||||||
|---|---|---|---|---|---|---|---|
| BIOLOGICAL ASSETS | Q4 2022 | FY 2022 | Q4 2021 | FY 2021 | |||
| Biological assets beginning of period | 47,185 | 14,939 | 12,537 | 12,044 | |||
| Increase due to production | 34,075 | 70,238 | 2,402 | 10,150 | |||
| Reduction due to harvest/sale | -25,201 | -37,990 | 0 | -7,255 | |||
| Reduction due to incident based mortality | 0 | 0 | 0 | 0 | |||
| Fair value adjustment beginning of period | -8,873 | 0 | 0 | 0 | |||
| Fair value adjustment end of period | 11,740 | 11,740 | 0 | 0 | |||
| Biological assets end of period | 58,927 | 58,927 | 14,939 | 14,939 |
Specification of biological assets
| Biological assets per 31.12.2022 | Number of fish (1000) |
Biomass (tonnes) |
Cost of production (NOK 1000) |
Fair value adjustment (NOK 1000) |
Carrying amount (NOK 1000) |
|---|---|---|---|---|---|
| Smolt | 2 305 | 96 | 12 681 | - | 12 681 |
| Non-harvestable fish (<4.6 kg) | 695 | 637 | 34 506 | 11 740 | 46 246 |
| Harvestable fish (>4.6 kg) | - | - | - | - | - |
| Total | 3 000 | 733 | 47 187 | 11 740 | 58 927 |
| Biological assets per 31.12.2021 | Number of fish (1000) |
Biomass (tonnes) |
Cost of production (NOK 1000) |
Fair value adjustment (NOK 1000) |
Carrying amount (NOK 1000) |
| Smolt | 2 275 | 182 | 14 939 | - | 14 939 |
| Non-harvestable fish (<4.6 kg) | - | - | - | - | - |
| Harvestable fish (>4.6 kg) | - | - | - | - | - |
| Total | 2 275 | 182 | 14 939 | - | 14 939 |
The Company is in an early stage of the production ramp-up at the grow-out facility at Indre Harøy, and hence the facility's production capacity is not fully utilized. Cost of production is therefore adjusted for unutilized production capacity. As per 31.12.2022 this adjustment amounted to NOK 13.6 million which has been expensed directly in the profit and loss statement. The corresponding figure for Q4 2022 amounted to NOK 5.5 million.
The Company has not yet started depreciation of the grow-out facility at Indre Harøy. Accordingly, depreciation is not reflected in the cost of production and only partly in the fair value adjustment figures.
Note 5 – Cost of Goods Sold
| (numbers in thousand NOK) | Q4 2022 | Q4 2021 | FY 2022 | FY 2021 |
|---|---|---|---|---|
| Cost of goods sold | -7 910 | 1 542 | -629 | -908 |
| Composition COGS: | ||||
| Raw material cost | -16 498 | -681 | -34 706 | -5 282 |
| Inventory change | 8 587 | 2 223 | 34 077 | 4 374 |
| Sum | -7 910 | 1 542 | -629 | -908 |
| Check | -0 | -0 | -0 | 0 |
| Composition inventory change: | ||||
| Change due to production | 34 075 | 2 402 | 70 238 | 10 150 |
| Change due to harvest/sale | -25 201 | 0 | -37 990 | -7 255 |
| Change due to incident based mortality | 0 | 0 | 0 | 0 |
| Change inventory raw material | -287 | -179 | 1 829 | 1 479 |
| Sum | 8 587 | 2 223 | 34 077 | 4 374 |
| Check | 0 | 0 | 0 | 0 |
| Composition - change due to production: | ||||
| Raw material cost | 16 785 | 927 | 32 877 | 3 319 |
| Salaries | 4 153 | 496 | 10 260 | 2 509 |
| Other operating expenses | 13 138 | 979 | 27 101 | 4 322 |
| Sum | 34 075 | 2 402 | 70 238 | 10 150 |
Note 6 – Interest-bearing debt
| Long-term interest bearing debt | |||
|---|---|---|---|
| --------------------------------- | -- | -- | -- |
| (NOK thousand) | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Debt to credit institutions | 513 169 | 200 000 |
| Other long-term interest bearing debt | - | 12 352 |
| Leasing liabilities | 9 676 | 892 |
| Total long-term interest-bearing debt | 522 844 | 213 245 |
Short-term interest bearing debt
| (NOK thousand) | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Debt to credit institutions | 42 512 | 733 |
| Other short-term interest bearing debt | 12 841 | 12 352 |
| Leasing liabilitites | 3 553 | 1 236 |
| Total short-term interest-bearing debt | 58 906 | 14 322 |
| Total interest-bearing debt | 581 750 | 227 567 |
| Cash & cash equivalents | 278 759 | 505 545 |
| Net interest-bearing debt | 302 990 | -277 978 |
The Group has entered into a senior secured NOK 625 million debt financing package relating to its phase 1 build out at Indre Harøy with Nordea, Sparebanken Vest and Innovation Norway. This package consists of a NOK 525 million senior secured credit facility that are to finance the construction CAPEX at Indre Harøy (Construction Facility) as well as a NOK 100 million overdraft facility. Per 31.12.22 the Group had made drawdowns of NOK 495 million under the Construction Facility. The Construction Facility has no repayments during the construction period and will be converted into a long-term debt facility at completion of Phase 1. In addition, the Company has drawn NOK 30 million on the Overdraft Facility.
The Group has also entered into loan agreements for a total of NOK 52 million relating to Salmon Evolution Dale AS of which around NOK 30 million was drawn as per 31 December 2022. This financing is intended to finance working capital and investments in Salmon Evolution Dale as well as refinancing of the seller's credit.
Per 31.12.2022 the Company has NOK 12.8 million of short-term interest-bearing debt (sellers credit) relating to the acquisition of Salmon Evolution Dale AS.
The above table does not include other long-term liabilities of NOK 8 million related to property and water rights in Salmon Evolution Dale AS.
Financial covenants
The most important financial covenants for the long-term financing of the Group are, respectively, a solvency requirement that the borrower's (Salmon Evolution Norway AS) book equity ratio (including intra-group loans) shall exceed 50%. Further, there is a profitability requirement linked to the borrower's EBITDA which shall be greater than NOK 100 million on a last 12-month basis from Q2 2024. Quarterly EBITDA figures shall be measured from Q3 2023 with set minimum EBITDA levels reflecting the company's gradual ramp up of production volumes and profitability.
Finally, there is a minimum cash requirement that stipulates that the cash balance shall be greater than NOK 100 million during construction, and greater than NOK 50 million after completion of the construction work.
Security
The Group's bank debt facilities are fully guaranteed by Salmon Evolution ASA. The respective lenders also have a pledge over 100% of the shares in the Group's two operating subsidiaries, Salmon Evolution Norway AS and Salmon Evolution Dale AS. Furthermore, the respective lenders have a pledge over all material operating assets of the Group, hereunder inter alia, land, plant and machinery, operating licenses, inventory and receivables.
| Cash movements in financing activites (NOK thousand) | Interest bearing debt | |||
|---|---|---|---|---|
| Short term | Long term | |||
| Balance at January 1, 2022 | 14 322 | 213 245 | ||
| Repayment of loans and borrowings | -13 086 | - | ||
| Proceeds from new bank loan | 42 512 | 313 169 | ||
| Seller credit Kraft Laks | 12 841 | -12 352 | ||
| Obligations due to land and water rigths | - | - | ||
| Change in obligations under leases | 2 316 | 8 784 | ||
| Balance at Dec 31, 2022 | 58 906 | 522 844 | ||
| Transaction cost related to loans and borrowings | - | |||
| Capitalised borrowing cost | 24 115 | |||
| Interest expense | 3 012 | |||
| Change accrued interest | -2 412 | |||
| Interest paid | 24 714 |
Note 7 – Finance income & finance cost
| (figures in NOK 1000) | ||||
|---|---|---|---|---|
| Finance income | Q4 2022 | Q4 2021 | 2022 | 2021 |
| Interest income | 4 027 | 1 478 | 8 730 | 4 057 |
| Net change in value of financial derivatives | 13 432 | 1 537 | 25 547 | 1 537 |
| Foreign exchange gains | 189 | 178 | 1 035 | 7 062 |
| Other finance income | 0 | 196 | 10 | 196 |
| Financial income | 17 648 | 3 389 | 35 322 | 12 852 |
| Share of net income from associated companies | -451 | -660 | -947 | -634 |
| Total financial income | 17 197 | 2 729 | 34 375 | 12 218 |
| Finance expenses | Q4 2022 | Q4 2021 | 2022 | 2021 |
| Interest on debts and borrowings | 1 153 | 742 | 3 012 | 1 007 |
| Foreign exchange losses | 85 | 1 211 | 554 | 6 287 |
| Other finance expenses | 579 | 40 | 604 | 40 |
| Total financial expenses | 1 817 | 2 069 | 4 170 | 7 335 |
| Net financial income/- expenses | 15 380 | 661 | 30 204 | 4 884 |
Fair value adjustments - financial assets
| (N OK tho usand) | 2022 | 2021 |
|---|---|---|
| Unrealised changes in the value of interest rate swap | 10 455 | 1 263 |
| Unrealised changes in the value of contract related to power supply | 13 629 | 274 |
| Realised profit (loss) related to power supply contract | 1 463 | - |
| Fair value adjustments recognised in profit and loss | 25 547 | 1 537 |
The Group did not have any fair value adjustments of financial liabilities in 2022.
Note 8 – Investment in associated companies
The group has the following investments in associated companies:
| (figures in NOK 1000) | Country | Ownership | Voting share |
|---|---|---|---|
| K Smart Farming Co., Ltd | Korea | 49 % | 49 % |
| Investment cost 31.05.21 | 27 413 | ||
| Share of net income 2021 | -634 | ||
| Foreign currency translation gain/(loss) 2021 | -560 | ||
| Net book value 31 December 2021 | 26 219 | ||
| Share of net income YTD 2022 | -947 | ||
| Foreign currency translation gain/(loss) YTD 2022 | 1 363 | ||
| Net book value 31 December 2022 | 26 635 |
Investments in associated companies are recognized using the equity method.
Note 9 – Tax
| (figures in NOK 1000) | FY 2022 | FY 2021 |
|---|---|---|
| Profit/loss before tax | -32 726 | -26 444 |
| Calculated tax (22%) | -7 200 | -5 818 |
| Tax payable | 0 | 0 |
| Change in deferred tax (asset) | -7 200 | -5 818 |
| Change in deferred tax not shown in the balance sheet | 7 200 | 5 818 |
| Tax expense | 0 | 0 |
Income tax expense is recognised based on management's estimate of the weighted average effective annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the period ended 31 December 2022 is 22%, compared to 22% for the period ended 31 December 2021.
Deferred tax benefit has not been recognised in the balance sheet as the Company is in its start-up phase and does not have any historical results to refer to when assessing whether future taxable profits will be sufficient to utilize the tax benefit. As of 31.12.2021 there was a basis for payable tax in the subsidiary Salmon Evolution Dale AS (previously Kraft Laks AS) amounting to 1,026 thousand. This is offset with a group contribution from Salmon Evolution ASA. The tax effect is recognized as deferred tax asset.
Note 10 – Earnings per share
| (figures in NOK 1000) | FY 2022 | FY 2021 |
|---|---|---|
| Loss attributable to the equity owners of the Company | -32 726 | -26 444 |
| Loss for calculation of diluted earnings per share | -32 726 | -26 444 |
| Weighted average number of shares outstanding1) | 337 015 239 | 291 291 107 |
| Dilutive options | 0 | 0 |
| Average number om shares and options used in calculation for diluted EPS | 337 015 239 | 291 291 107 |
| Basic earnings per share (NOK) Diluted earnings per share (NOK) |
-0,10 -0,10 |
-0,09 -0,09 |
Basic earnings per share are based on the weighted average number of common shares outstanding during the period.
2022: The Company started the year with 310,796,489 shares. In the end of March shares options to the employees were exercised increasing the total number of shares with 1,625,000, followed by an issue of 33,333,333 new shares in a capital raise in April. Therefor the weighted average number of shares outstanding YTD 2022 has been calculated by applying a weight of 1/4 of the number of shares before the capital raise in Q1 2022 (310,796,489 shares), and 3/4 of the total number of shares after the capital raise (345,754,822 shares).
2021: The Company issued 83,333,333 new shares in a capital raise in March 2021, and another 2,190,694 in August 2021. The weighted average number of shares outstanding YTD 2021 has been calculated by applying a weight of 2/12 of the number of shares before the capital raise in March 2021 (219,731,088 shares), 6/12 of the number of shares after the capital raise (303,064,421 shares), and 4/12 of the total number after the final adjustment in September 2021 (305,255,115).
| Subscription | |||||||
|---|---|---|---|---|---|---|---|
| Capital | Share Capital | price | Total no. of | ||||
| (figures in NOK 1000) | Date | Increase | After Change Par Value | per share | New shares | outstanding shares | |
| Opening balance 1 July 2020 | 5 375 159 | 0,05 | 107 503 182 | ||||
| Share options exercised | 10 July 2020 | 30 000 | 5 405 159 | 0,05 | 3,33 | 600 000 | 108 103 182 |
| Private placement | 23 July 2020 | 581 395 | 5 986 554 | 0,05 | 4,30 | 11 627 906 | 119 731 088 |
| Private placement | 11 September 2020 | 5 000 000 | 10 986 554 | 0,05 | 5,00 | 100 000 000 | 219 731 088 |
| Private placement | 23 March 2021 | 4 166 667 | 15 153 221 | 0,05 | 6,00 | 83 333 333 | 303 064 421 |
| Acquisition Kraft Laks | 16 August 2021 | 109 535 | 15 262 756 | 0,05 | 7,58 | 2 190 694 | 305 255 115 |
| Private placement | 12 October 2021 | 277 068 | 15 539 824 | 0,05 | 7,71 | 5 541 374 | 310 796 489 |
| Share options exercised | 26 March 2022 | 81 250 | 15 621 074 | 0,05 | 4,80 | 1 625 000 | 312 421 489 |
| Private placement | 5 April 2022 | 1 666 667 | 17 287 741 | 0,05 | 9,00 | 33 333 333 | 345 754 822 |
Note 11 – Share capital and capital history
The Company entered into an investment agreement with Dongwon Industries and completed a NOK 50 million private placement towards Dongwon Industries in July 2020.
The Company raised NOK 500 million in a private placement in connection with its initial public offering related to the admission on Merkur Market (now Oslo Børs) in September 2020. Further, the Company also raised another NOK 500 million in a private placement in March 2021.
In August 2021 the Company acquired 100% of the shares in Kraft Laks AS. As part of the settlement the Company issued 2,190,694 new shares of NOK 7.5775 per share, and thereby increased its equity by NOK 16.6 million. In October 2021 the Company carried out a private placement of USD 5m (NOK ~43m) towards Cargill.
Further, in April 2022 the Company carried out a private placement raising gross proceeds of NOK 300 million at a subscription price of NOK 9.00 per share, bringing total raised equity to more than NOK 1.7 billion.
Note 12 – Options
| Options | |
|---|---|
| Effects on financial statement: | |
| NOK thousands | 31.12.2022 |
| Other paid-in capital | 3 201 |
| Net BS | 3 201 |
| Option cost | 31.12.2022 -2 259 |
| Net PL | -2 259 |
| 31.12.2022 | |
| Capitalized option cost | -942 |
| Allocated to CAPEX | 942 |
The option- and capitalized option cost is adjusted in this period as the former CEO has chosen to resign, and thereby also losing his option rights in the Company.
Note 13 – Transactions with related parties
During the ordinary course of business, the Company may engage in certain arm's length transactions with related parties.
There were no material transactions with related parties in 2022.
Note 14 – Significant and subsequent event
Strengthening the executive management team
In January 2023 Trond Håkon Schaug-Pettersen was appointed CEO of the Company. Schaug-Pettersen was appointed CFO of Salmon Evolution in October 2020 and has since October 2022 also held the position as interim CEO.
The Company also appointed Trond Vadset Veibust (37) as new CFO. Veibust comes from Ekornes where he has been for 8 years, of which for the last 3 years as a member of the executive management. Veibust will join Salmon Evolution during the second quarter of 2023.
ABOUT SALMON EVOLUTION
Salmon Evolution is a Norwegian land-based salmon farming company targeting a production capacity of 100,000 tonnes HOG by 2032. The Company's core focus is on extending the ocean's potential by transferring the best preconditions offered by the sea to farm fish on land through its chosen hybrid flow-through system technology (HFS). This secures a truly sustainable production process with controlled and optimal growth conditions and limiting operational and biological risk.
The Company's first production facility is strategically located at Indre Harøy on the Norwegian west coast with unlimited access to fresh seawater, renewable energy, established infrastructure, and an educated and experienced work force. Phase 1 is already in operation and will have an annual capacity of 7,900 tonnes HOG at steady state. Fully developed, the Indre Harøy facility will have an annual capacity of 31,500 tonnes HOG.
The Company has also entered into a joint venture with Dongwon Industries where the parties will develop, construct and operate a land-based salmon farming facility in South Korea with an annual production capacity of 16,800 tonnes HOG, using Salmon Evolution's chosen HFS technology.
Furthermore, the Salmon Evolution has initiated a process with the aim of establishing a land-based salmon farming operation in North America.
Salmon Evolution ASA is listed on Oslo Børs under the ticker SALME.
BOARD OF DIRECTORS
Tore Tønseth Chairman of the Board
Anne Breiby Board Member
Ingvild Vartdal Board Member
Peder Stette Board Member
Janne-Grethe Strand Aasnæs Board Member
Glen Allan Bradley Board Member
Eunhong Min Board Member
Håkon André Berg Board Member
MANAGEMENT
Trond Håkon Schaug-Pettersen CEO & CFO
Ingjarl Skarvøy COO
Odd Frode Roaldsnes CCO
Kamilla Mordal Holo Chief Project Officer
Henriette Nordstrand Technical Director
Hans Petter Mortveit Finance Manager
OFFICE ADDRESS Torget 5, 6440 Elnesvågen (HQ) Keiser Wilhelms gate 22, 6003 Ålesund
PRODUCTION SITES Grow-out: Indre Harøyvegen 88, 6430 Bud Smolt: Dalsfjordvegen 2805, 6120 Folkestad
ORG NUMBER NO 925 344 877 MVA
E-mail: [email protected] Web: salmonevolution.no