Austevoll Seafood Asa Ord

Then it's a pleasure for me to welcome you to Oosterwold Seafood's fourth quarter presentation. I will start this presentation by giving you the highlights of the quarter and also some comments to the annual result. Thereafter, I will take you through segment for segment, looking at our performance in the quarter. Britt-Katrine Drivenes, she will take us more in detail through the numbers in the quarter and I will end this session by giving a view on the different market in the different segments we are operating within. So starting up, it's a It's fair to say that we have had a quite active quarter in particular in South America. It's pleasant for us to see that our Peruvian activity is back on track and have done a good performance during the second season there. Also been active in Chile. For the human consumption activity in the North Atlantic, this is the main quarter, so also high activity there. And it's also pleasant to see that we are continuing the positive biological development. Dan, it's a pleasure for me to welcome you to Oosterwold Seafood's fourth quarter presentation. I will start this presentation by giving you the highlights of the quarter and also some comments to the annual result. Thereafter, I will take you through segment for segment, looking at our performance in the quarter. Britt-Katrine Drivenes, she will take us more in detail through the numbers in the quarter and I will end this session by giving a view on the different market in the different segments we are operating within. So starting up, it's a It's fair to say that we have had a quite active quarter in particular in South America. It's pleasant for us to see that our Peruvian activity is back on track and have done a good performance during the second season there. Also been active in Chile. For the human consumption activity in the North Atlantic, this is the main quarter, so also high activity there. And it's also pleasant to see that we are continuing the positive biological development in Lerøy. So all in all, revenue of 9 billion ok, EBITDA of 1.4 billion ok. and an EBIT including income from associates of just south of 900 million NOK. If you take into account the 50% share we have in Pelagio Group, you can see the following distribution of our 1.5 billion NOK EBITDA. uh approximately uh one point uh two hundred and sixty billion up uh 60 billion uh knocking ebt from uh larry up 80 million knock from uh same quarter last year and when it comes to uh the pelagic segments you can see that we are also up approximately 50 million NOC and the explanation behind that is that the South American activity is delivering approximately 200 million NOC better than last quarter and we have reduced our earnings with approximately 140 million NOK in our North Atlantic pelagic segments. But all in all a decent quarter which we are satisfied I would say across our group. Looking at the full year, to have some comments related to our numbers there. Again, I would say it's three major impacts. I like the comments. Firstly, Peru. are doing approximately 1 billion ock better this year versus 2023 and it's an illustration of the difference from a linear year to a year where we have a good volume. Other comments I want to mention is that our associated company Scottish Seafarms is also delivering 700-800 million knock better this year which is a turnaround also which shows that they are doing the correct thing in Scotland. And lastly also I would say it's worth mentioning also that the biological development in Lerøy is far better going into 2025 compared with the same period in 2024. So all in all a revenue of 35 billion nok, EBITDA of 7.3 billion nok, EBIT of 5.6 billion nok, And it's also worth to mention here that we have a gain of sales of approximately just sort of 1.3 billion ock when we sold two of our pelagic fishing vessels with quotas. Also, we have a quite strong balance sheet total asset of 55.6%. 55.6 billion NOC, equity ratio of 53%, and a net interest-bearing debt of 8 billion. All in all, we are delivering more or less the same numbers from Leroy. I would say 200 million less in 2024 versus 2023. And we are delivering far better from the Pelagic segments. And that's mainly explained, again, on the difference in earnings in Peru. Österval Seafood is all about volumes. In 2024 we caught approximately 500,000 tons on our own vessels in both North Atlantic and in Chile and Peru. We processed approximately 1.9 million tons in our pelagic factories across these regions, produced and caught around 85,000 tons of whitefish. in the Barents Sea and slaughtered during 2024 approximately 200,000 tons of salmon and of course the ambition is to improve that volume in 2025. So then starting up talking about the segments and I would say the first graph here showing the development both in biomass and quota in Peru and you can see the major difference from the two seasons in 2023 versus 2024. So in 2023 the quota was set at 1.7 billion tons. We didn't have our first season fisheries and during 2024 the quota is up with 300 percent, a total of 5 million tons. The second season started on the 1st of November and on the 23rd of January we caught approximately 74% during the fourth quarter. I would say that we had a quite good achievement. I would say the total fisheries were around 96% of the total quota set. In our case we were catching around 97% and of course we should have taken 100% but I would say we are also quite satisfied with the performance also during that season. So caught 170,000 tons, purchased in addition 55,000 tons. We had a quite large plant discharge share of 9%, which is a record level in our case. The super prime and prime percentage were up versus same season last year and also the fish oil yield is back I would say in a normal pattern and the total production of fish oil in Peru is approximately 10 times higher this year versus same period last year. In the salt I would say that the last two years in 23 and 24 it's been a limited volume in for our factories in ILO. So far this year we have had a good start where we have purchased approximately 45,000 tons which is approximately the same amount that we did in the first than the last two years. So I would say a good start. So going into 2025 with higher shares, a higher stock, both on fish meal and fish oil. And I would also say we have had a decent start in Peru in 2025. Chile also have shown, I would say, in the latest year, a positive development, in particular in the quota, and we have had, in particular in 2024, a quite good utilization of both our fishing vessels and our factories, and we have received a record high volume of 133,000 tons of horse mackerel and mackerel to our plant. 64,000 tons is mainly based on our own quota and then we have purchased additional 64,000 tons which we have caught with our own vessels and produced in our own factories. Also, I would say the biomass is sustainable. This year, the jack mackerel quota is up with 25%, but it's still too early to say what the final quota will be for food corp, because there is an ongoing discussion related to allocation between industrial fleet and also the coastal fleet. And I think we will have maybe some answers on that within the next two months. When it comes to the North Atlantic pelagic quota, it's on a lower level in 25 versus the same period in 24. It's considerably down on the Barents Sea capelin, sand eel, mackerel, North Sea herring and also 5% reduction in blue whiting and the positive sign I would say is that the herring is up with 3% so the don't want trend we have seen the last A couple of years seems to be turning at this time. But less volume, higher competition to get raw material from both our fish meal activity and also our human consumption activity in Pelagia. When it comes to the fish meal activity in Pelagia it's a seasonable low production quarter mainly producing trimmings in this quarter which is the same as we are normally doing in every four quarter and a volume of 162 000 tons is purchased during the period Total volume in 2024 is 950,000 tons and we are guiding of a volume of 900,000 tons from Pelagia in 2025. I would say that the fish meal prices have been quite good also during the fourth quarter, but I would also say that the margins have been a bit reduced, particularly on fisheries, as a consequence of the very good fisheries we have had in Peru. So looking into the direct human consumption production for the Pelagia factory, the food segment, have been through a period, both the third quarter and fourth quarter, which is the main season for this segment. We have caught approximately... purchased approximately 35% of the total annual volume in four quarters in 2024, and it's been committed. It's been a good season for this segment, where they have been mainly producing herring, filleted herring, and also Atlantic mackerel. This is also the main species which we have been producing in this segment in the first quarter and I would say again it's done a good job in this segment both in this quarter and also for the full year in 2024. Looking at the result of Pelagia, a bit down from the same quarter last year, and it's mainly driven by a higher pressure and margin on fish meal and fish oil, and also the health segment is delivering a bit weaker this year. compared with the same quarter last year. So all in all, a revenue of 5 million tons. It's down from an EBITDA of 293 and EBIT of 177. If you look at the full year, revenue of 15 billion ok, EBITDA of 1.4 billion ok and EBIT of 972 million ok. As a summary, I would say that the food segment is delivering better in 2024 versus 2023 and the feed and health segments are delivering poorer during this season. Done discussing or taking into account the operation in Leroy and I would say Lire is delivering more or less on the same level as they did same quarter last year, but taking into account that spot prices has been five knock less, the company is developing in a positive direction. I would say the net growth has been 11% higher than the average of the last five years. mortality approximately 27% lower compared with the same period and we have also reduced our zealous treatment with approximately 15% by taking into account the submerged equipment which is a good achievement and I was also led in that We are in the roof on the MAB going into 2025 in all regions of Lerøy. Slaughter of volume of 56,000 tons in the fourth quarter. Record high volume for us, 9,000 tons up. versus the same period last year. It's divided by 15,000 tons in the north, 22,000 tons in the mid and approximately 19,000 tons in the west coast of Norway. EBIT per kilo, 14 NOK, a bit down from the same period last year. And if you look at EBIT per kilo on the value chain, it's 50 NOK per kilo in Leroy Aurora, 20 NOK per kilo in Leroy Mitt, and also 10 NOK per kilo in Leroy Kyrtroll. So I would say all in all, a good achievement. And if you want a more detailed walkthrough, I suggest you look at the webcast of Leve for this quarter. When it comes to volume, we are maintaining our volume guidance of 195,000 tons in Norway. It's almost up at 19,000 tons and approximately 16,000 tons in our share of Scottish seafoam. We have been having a quota reduction on the whitefish segments for the last three years, and this has also been reducing in 2025. I would say 2024, looking at the quota we have had available, have been also a decent year for the segments, in particular for the fishing fleet. And I would say the reduced quota has been compensated by increase of market price for the main species. COD is up with 56%, HADOC is up with 152%, and SAIT is up with approximately 52%. But I would say on the land-based activity, when quota is down, the conditions to make margin is even more challenging. So then I would give the floor to Britt-Katrina.

Thank you, Alma. We start with summarizing the volumes for the quarter and just in short, high activity in Peru because of the second season which started in 1st of November. We have had high activity within the human consumption production in the North Atlantic and have slaughtered a substantially higher volume of salmon and troth in the fourth quarter 2024 compared with the same quarter in 2023. Arne has already taken you through the key figures, so I will not repeat too much. But what we can say is that we have had an increase in revenue of 7% compared with the same quarter in 2024. And the revenue came in at 11.6 billion, including our 50% share. of Pelagia. Earnings here EBITDA adjusted was up 10%, came in just above 1.5 billion and also including 50% share of Pelagia. As mentioned, Arne has taken you through the key figures, so I will start on the line income from associated companies, which came in at 54 million in fourth quarter 2024, down from 109 in same quarter in 23. The two largest associated companies are Pelagia and Norske Tavbruk. And Anna has already taken you through the figures for Pelagia. So I will just in short say that the earnings in fourth quarter was down from same quarter in 2023. Food segment delivered a better result. The feed and health, a lower result compared with same quarter in 2023. But I have to mention that for the full year 2024, Pelagia has had a very good year with EBITDA of 1.4 billion. Norske Talbruk have had some challenging years. So we are glad to see that there is a positive development, both operational and financial, now in 2024. And they have better earnings in the fourth quarter this year, or 2024, compared with the same quarter in 2023. It's up 30 million if you look back to 2023. And also here I would like to mention the full year because the EBIT for the full year is 555 million and that is actually an improvement of 860 million on the EBIT level from 2023. Then we have the line other income and expenses. In the appendix, you can see the details there, but it includes this production tax for the salmon farming segment. It's also elimination of internal earnings and write-downs. But also in this quarter, it includes litigation costs. The fair value adjustment related to biological asset was positive with 725 million in fourth quarter. It was also positive in same quarter in 2023 with 250 million. This gives an operating profit of 1.4 billion in fourth quarter up from 937 million in fourth quarter 2023. Profit before tax was 1.2 billion, up from 820 million. We have a positive tax in the quarter. And for those of you that remember the 2023 figures, we had quite a high impact from implementation effect of the resource rent tax. It was 1.8 billion, which came into our tax costs. We have reversed close to 1 billion of that effect now in 2024 in fourth quarter. Net profit in fourth quarter was 1.8 billion up from 767 million in same quarter last year or in 2023. to be more precise and earnings per share and if we take out this biomass adjustment was NOC 3.3 including the biomass adjustment the earnings per share was NOC 4.8 Looking at Lera Seaford Group, the quarterly harvest volume was up 20%. The cost per kilo of slaughtered salmon and trout has been decreasing since second quarter in 2024 and also decreased now in fourth quarter. But the spot benchmark prices, they are lower compared with the same quarter in 2023, which of course impacted the price achievement. So the EBIT per kilo excluding wildcatch came in at the NOC14, down from NOC16 same quarter 2023. The WAP sale and distribution is continuing its good development and they have had a very good capacity utilization and the earnings from this segment is 275 million in the quarter, a little bit up from 271 million in fourth quarter 2023. Wildcatch, we have been talking about the quota reduction and that is of course challenging. The effect is compensated in a way in the trawler or in the catch segment of the wildcatch operation because of higher prices, but of course very challenging for the land industry. But you can see here that we have a 21% lower volume in fourth quarter in 2024 compared with fourth quarter 2023. The revenue in the quarter was close to 8.5 billion. The EBITDA was 1.26 billion and the EBIT came in at 799 million in fourth quarter. Second fishing season started up 1st of November and the company has of course had a very good activity in the quarter. They caught a little bit less than 74% of its quota before the end of 2024 and in addition purchased 55,000 tons from third party. So you can see the increase in raw material is up 100,000 tons in the fourth quarter in 2024 compared to the same quarter in 2023. The company has sold a very limited volume of its production in the second season, a little bit less than 6,000 tons, and that was in line with what we sold also in the same quarter in 2023. Fish meal prices are down close to 18% compared to the same quarter in 2023. But this also means that we go into 2025 with a very high inventory of finished products, a little bit less than 48,000 tons of combined fish meal and fish oil, up from 16,400 tons going into 2024. The revenue in the quarter was 142 million, EBITDA of 78 and EBIT of 18 million. I would like also to mention the full year because you can see that the revenue has more than doubled in 2024 compared to 2023 and there is an increase in EBITDA of 1 billion compared to 2023. Chile has also had a very good year. They have had their highest catch volume of horse mackerel and mackerel in the company's history, 133,000 tons. Also in fourth quarter, we had good activity. The company caught 21,000 tons of horse mackerel and mackerel, and a very high portion went in for frozen production. We also had a fishery loss in 2023 in December, 18,000 tons. But most of that raw material went in for the production of fish meal and fish oil. Revenue in the quarter is 395 million. The EBITDA is 39 million and the EBIT is 25 million. But that is an increase of 100 million compared to the same quarter last year. Kobbevik and Furholmen, the harvested volume is down 42%, a little bit less than 1,300 tons, down from 2,200 tons in fourth quarter in 2023. The company sells all its salmon in the spot market, but the majority of the volume harvested is harvested in the latter part of Q4. And in contrast to Q4 in 2023, and this has resulted in higher prices. The cost is also a little bit higher compared to the same quarter in 2023. And the EBIT per kilo came in at NOC22, up from NOC20 in the fourth quarter of 2023. It's not much to say related to Brønne Birkeland. They sold their pelagic activity in June, and the cash contribution from that sale was a little bit less than 2 billion. The two vessels left in the company, the snow crab vessels, they finished their quota in March in 2024 and have had no operations since then. So the EBIT here is negative with minus 11 million. Looking at the financial position, the total assets by the end of 2024 was 55.6 billion, up from 53 billion by the end of 2023. I will comment some of the lines. You can see tangible fixed assets are up, and in addition to the maintenance capex, we also have done investment in new technology within the farming segment. Right-of-use assets are also up and we entered into a new leasing contract in the fourth quarter for a state-of-the-art well boat, which impacts this line. We also have a higher standing biomass and that increased the biological asset at cost. Net interest bearing debt by the end of the year was a little bit above 8 billion, up from 6.7 billion in 2023. However, I have to say we have a very good and strong balance sheet and the equity ratio is 53%. Arne mentioned it in the beginning, but the board will recommend to the annual shareholders meeting in 2025 to pay out the dividend of NOC 6.5 per share. In 2024, the company paid out NOC 4.5 per share. Looking at the cash flow, I would like to comment shortly on the full year and the cash from operating activities came in at 2.9 billion. We have increase in working capital and that is driven by high activity Especially South America, as you saw earlier in the presentation, we have quite high inventory of finished products going into 2024 compared with 2023. We also have a higher standing biomass, which also increased the working capital. And the payable tax in 2024 was 1.3 billion, up from 739 million in 2023. Looking at the cash from investing activity, that is positive, 181 million, and of course impacted by the sales of the shares in the pelagic activity in Brødene Virklana, which gave a cash contribution a little bit less than 2 billion. Cash from financing activities was minus 2.8 billion. And I would like to mention here that we have paid a dividend out of the group of close to 2.7 billion. So we started the year with a cash position of close to 5.5 billion and ended the year with a cash position of 5.7 billion. So then I leave the floor to you again, Arne.

Then I will end this session by giving our view in the different markets we are operating within and starting up with the fish meal and fish oil market. Starting up with the fish meal market, you can see among the largest producer that there is an increase of just sort of 40% of production in 24 versus 23. And the main driver behind that is Peru, which has had an increase of 137%. The season has been successfully produced in the second season approximately 575,000 tons and we have also seen that prices have been reduced as a consequence of the high quota both in first and second season. But also prices have partly recovered a bit during the end of the year. And by now prices is approximately $1,600 for super prime quality and $1,400 for standard quality. If you look at the major markets, stock now is 234,000 tons. It's up 33% versus the same period last year, but still they have been moving a lot of the volume produced in Peru over to China. Daily outtake is 3,200 tons, and it's better than the same period last year. Thank you. Prices higher than what they are selling for in Peru, which has stimulated more trade. And if you look at last year's import level, it's just sort of 2 million tons which has been imported to Peru. And all in all, 2.2 million tons consumed in Peru, which is a high portion of the total production in the world. Fish oil, more or less the same development. We are seeing a reduction in production in all the major countries except Peru, which is not only benefiting of a higher volume, but also for a much better yield this year versus the same years in 2022 and 2023. We have an increase of 10 times In 24 versus 23. And this has also affected the fish oil prices. We are seeing now that for the feed grade, the prices is $2,700 per ton with a premium of approximately $700 for the omega-3 grade. Then moving over to salmon, and as you can see, both in 22, 23, and 24, the supply of Atlantic salmon, which were more or less on a zero level, and then 25, it's the expectation of 6%. increase on a global level which is also supported by the growth we are seeing now in particular from Norway. But I would say the fundamental for a good market also into 2025 is definitely there. And looking at the price development, we can also see that salmon prices in 24 versus 23 were approximately five knock less. And the same has been for the quarter, five knock less in four quarter versus same quarter in 23. And also going into 2025, as we are seeing now, we are seeing, I would say, lower prices, but also as a consequence that the supply of superior fish is much higher during first quarter versus the same period last year, where we have winter wound in a high portion of the salmon produced in Norway. Still, as you can see, the EU is the main market for Atlantic salmon, and it's up 5% versus the same period last year. Other markets, which is mainly overseas markets, is 6% up, and the US market is down by 2%. To sum up our positive biological development in Lehre during 2024 and we hope to see that in the numbers when we are coming into 2025. The biomass is high in 2025 and we will have a higher portion also slaughter in first half year versus the same period last year. And we are seeing the improvements mainly coming from all the way down to row genetics, small quality, the new farming technology, and also process improvement and treatment. So all in all salmon looks good. More challenging on the whitefish. Quota continued down. Cod down by 32%. Haddock down by 2%. And site is on the same level in the north and up 40% in the south. South America, I would say we are quite satisfied with the second fishing season performance in Peru. Expecting the new season to commence during April. So the research has already started and of course the quota will be determined by April. after the research. Also in Chile, a bit in particular, but a very good four quarter versus the normal four quarters because this quarter we have been earning money. We had a high stock into four quarter and also have a good fishing performance in four quarters, so leaving also good stocks in for 2025. And then in the North Atlantic, I would say, all in all, the performance on the main season in for food has been very good. And we are now in the season main season for fish meal and fish oil activity buying blue whiting so a bit less quota to compete against but I would say also that the people in Pelagia is well prepared and well motivated to take their portion of the volumes so that was all thank you for the attention