Atlantic Sapphire As

Hi everyone and welcome to our Q1 operational update and 2023 annual report presentation. I am Johan Andreassen and with me to present today is as always Carl Øyaug.

Yes, good afternoon. We will open up for a Q&A after the presentation where you can type your question into the Q&A tab that you'll see on the right hand side of the Teams window. We will only answer questions from attendees that have identified themselves with names, so please state your name in the question box as well. Johan?

Thank you, Carl. First, I would like to give a quick comment on the process of finding my successor as a CEO. As I mentioned last fall, this was going to take some time since we wanted to do a thorough search to find the right person. After a very good process, we are now close to making a decision, which means that you can likely expect an announcement on that topic by the end of this quarter. And with that said, I will now give you an update on the latest developments since our last update that was on February 29th. Stable performance on the back of infrastructure improvements. As we have discussed in detail over the last year, 2023 was heavily impacted by infrastructure upgrades, followed by temperature challenges last summer that limited our ability to produce fish the way we are supposed to. After we were done with these upgrades and got our temperatures under control in October last year, the stability in the farm has been completely different from what we have seen in the past. As we have also discussed in detail over the last year, we have seen high degree of maturation and poor performance on the fish groups that were in the grow out systems during the high temperature period last summer. These fish groups have given us poor feed conversions and low price achievement. We are all very happy that we are almost done harvesting these fish and that we will tap into the newer batches before the end of this quarter. On the new batches, we are continuing to see strong biological development with low feed conversion, low mortality, low maturation and good growth rates. Farming conditions are stable, supporting an outlook of continuous increase in biomass gain and harvest volumes over the coming months. Farming temperatures are continuing to remain stable and at set point of around 14 Celsius in the grow-out systems and 12 Celsius in the freshwater systems. We are operating with a high level of caution on water quality parameters, and we see that our water remains stable despite higher feeding rates. The new chillers continue to operate with a high degree of reliability And we can keep temperatures where we want them to be, even with the warmer weather that we have seen in Miami lately. The new heat exchanger for energy recovery in our wastewater is being brought online and further cooling capacity buffer on standby in addition to the four new chillers that we're receiving is going to give us a good buffer going into the summer. The mix of batches are quickly improving. Parts of the pre-Q3 2023 batches went into early maturation due to the temperature challenges that I mentioned earlier. And in general, the harvest sizes have been much lower than desired due to the same challenge. The farming conditions have significantly improved since Q3. significantly reducing the share of maturing fish in the current standing biomass. In the graph on the right hand side, you will see that as of today, we are very close to having harvested out all the pre-Q3 batches. In fact, we have harvested out these underperforming batches of fish faster than we anticipated back in February. This to give room for the high performing fish that comes after. All the pre-Q3 batches will be harvested by mid-2024, and the remaining biomass has not had the exposure to the high temperatures. The combination of improved quality of harvested fish and increased volume of harvest is expected to result in a significant improvement of the financial performance in the months to come. We harvested approximately 1,150 tons hog of the pre-Q3 batches in the first quarter of this year with a significant volume of small and mature fish. Still, at the same time, we were able to supply good quality fish to our key customers. We expect to harvest at least 1,000 tons hog in the second quarter of this year at the same time as we will increase our standing biomass further setting the stage for a much better second half of the year. Stable temperatures and growth conditions have improved performance. As you can see from the biomass gain graph on the left-hand side, we are continuing to see higher and higher biomass gain in the post Q3 batches, while we had a negative contribution from the older batches with high maturation. Again, we look forward to getting out of these fish. On the right-hand side, you can see that the newer host Q3 batches has had growth rates around 30% monthly the last six months, which is in line with targeted growth for the size fish that is represented in this bucket at any given time. That said, the growth rates we have seen in the post-skew tree batches are far above what we have seen in Miami since the farm was built. It is a very good example that the fish will grow well if we as operators are able to give them the conditions that they need to grow. Supportive feeding rates and conversion ratios. The graph on the left-hand side is showing us the accumulated feed conversion rates on the remaining standing biomass of the older fish at around 1.5 biological and 1.9 economical, which reflects that these fish have a high degree of maturation and has historically had elevated mortality. The post-Q3 batches, on the other hand, is showing a very good accumulated feed conversion, reflecting the underlying favorable biological conditions and good operations that these fish have been subjected to. Even though the fish still needs to grow out to full harvest size, the feed conversion that we see here is a good benchmark with industry averages. It is also worth mentioning that the economical and biological feed conversion is almost the same, reflecting the very low mortality rates we have seen for these fish. On the right side, we can see the monthly feeding the last five months that shows a slowly upwards trend, and with better feed conversion rates, the biomass gain is increasing more than the feeding rates. We expect this trend to continue in the months to come. In conclusion, the development of feed conversion ratios and tons of feed absorbed indicates good fish health and good farming conditions. System temperatures have stabilized after the chiller improvements. As we have spoken a lot about before, the new rental chillers that were brought online after the summer of 23 immediately resolved our prior nightmare with elevated temperatures. The temperatures were brought down and stabilized at the target levels of 14 in the saltwater systems and 12 Celsius in the freshwater systems. which are the levels that the company believes are optimal for high growth and operational stability. The available chiller capacity is around 9,000 cooling tons, representing a significantly cooling over capacity, as peak days of the summer are estimated to require an online cooling capacity of approximately 7,000 tons. In addition, the new discharge heat exchanger will be installed before the peak summer and will add another 2,000 cooling tons worth of capacity, leaving us with an expected overcapacity slash buffer of approximately 55%. And with that, I'm going to give the word back to you, Carl.