Austevoll Seafood Asa Ord

Then I'd like to welcome you all to Österål Seafood first quarter presentation. I will start this session by giving the highlights of the quarter. I will take you more detail through the different segments we are operating within. Britt-Katrine Drivenes, our CFO, will take you through more in detail the financial figures for the quarter. And I will end this session by giving a view on the different markets we are operating within. So starting up, we have had a quarter with quite good activity, particularly in the pelagic segments. And we have also continued the well-performing biological studies. performance in Lerøy. So in first quarter, we have a revenue of 9.8 billion NOK, an EBITDA of just north of 1.9 billion NOK, and an EBIT of just north of 1.4 billion NOK. We have a strong balance sheet, total asset of 53 billion ok, equity ratio of 55%, and a net interest bearing debt of 7.3 billion ok. Then I'd like to welcome you all to Österål Seafood first quarter presentation. I will start this session by giving the highlights of the quarter. I will take you more detail through the different segments we are operating within. Britt-Katrine Drivenes, our CFO, will take you through more in detail the financial figures for the quarter. And I will end this session by giving a view on the different markets we are operating within. So starting up, we have had a quarter with quite good activity, particularly in the pelagic segments. And we have also continued the well-performing biological studies. performance in Lerøy. So in first quarter, we have a revenue of 9.8 billion NOK, an EBITDA of just north of 1.9 billion NOK, and an EBIT of just north of 1.4 billion NOK. We have a strong balance sheet, a total asset of 53 billion ock, equity ratio of 55%, and a net interest bearing debt of 706. at 7.3 billion if you also include the 50 share we have in pelagia you can see on our ebt we are passing the two billion knock level which is one of the best quarter ever for our group and the difference from last year is that Well, I would say mainly is that Leri is delivering an EBD of 260 million knock better. And it's mainly explained by, I would say, better biological performance, The slaughter volume is up with approximately 50% and also lower mortality and higher quality of food. of the salmon we have produced in the quarter. And delivering 260 million more despite that average spot prices is 19 NOK per kilo lower in this quarter versus the same quarter last year. Pelagic segment is more or less in line with with last year. Some movements between the different companies, but we will come back to that later. And confirming the dividend proposed by the board to be 6.5 NOK per share up from 4.5 NOK per share last year. Österval Seafood is all about volumes. This year we are aiming to catch over 500,000 tons of pelagic fish on our own quotas, mainly in Chile and in Peru. We are aiming to receive approximately 1.9 million tons of pelagic fish on our factories. With Leri Halvfisk and Leri Norway Seafood, we are aiming to produce and catch approximately 80,000 tons of whitefish. And hopefully we are also reaching the aim to be very close to 220,000 tons of slaughter volumes in 2025. Starting up, going through the different segments, Peru are in the middle of the first season in 2025. The biomass detected on the research is one of the highest we have had lately. We have to go back to 2013 before we had a higher biomass than we are seeing this season and back to 2018 to have a higher quota than what we have seen this season. I would say normally first quarter is I would say a low catching quarter but I would say we are doing considerably better in this quarter versus the same quarter last year where we were in the tail of the El Nino. We have had a good activity in the salt where we have received approximately 66,000 tons. We have also ended the second season with approximately 26,000 tons in the center north. Also, you can see that the mackerel fishing has been better this quarter versus same quarter last year. But I would say it's a seasonable low quarter. So it's more interesting to talk about the second season and, of course, another second quarter and the performance so far in the first season. The quota was 3 million tons. That means that in our case we are catching. We are supposed to catch 210,000 tons with our 7% quota. So far it's caught around 1.2 million tons of the total 3 million tons in Peru and we have caught close or just past 90,000 tons. I would say yield on both fish meal and fish oil is normal, 23.5 fish meal yield, approximately just south of 3% on fish oil yield. So the start has been good and we have had quite good activity around all our three factories in the Santa North, Coesco, Chiang Kai and Pisco. In Chile also, record high catches in first quarter, 55,000 ton versus 47,000 ton, same quarter last year, which were also a very good quarter. So high production to frozen products, and we came into the year with a quite high stock, so it's also a bit pressure on margins. also the sardine fishing recovery so we have purchased i would say a normal level around 27 000 tons in first quarter so far uh this year it's around 36 000 tons and also if you look at the jack mackerel we are now surpassing 64 000 tons uh so temporarily now uh The vessels we are having is lying idle waiting for transferring of the quota for the high seas vessel normally catching outside 200 miles. Still unclear how the distribution of the quota will be divided between coastal vessel and the industry vessel. Best estimate today is that it's going to be 70% to the industry, down from 90%. up from 10% to 30% for the coastal vessels. And we don't know if this is going to be valid this year or if it's going to be delayed until next year. So I would say how it looks today is that The quota we had last year will be the same for 2025, around 64,000 tons. This is what we have been guiding on, but it's a potential upside of increasing our own quota to 81,000 tons if the decision is being delayed for 2026. North Atlantic quotas done with approximately 500,000 tons. And this is the basis for the raw material intake for Pelagia. So we are also expecting lower volumes, both for human consumption of feed and food segments in Pelagia. So starting up, looking at Pelagia. had a quite good start of the season in fish meal and fish oil, mainly based on blue whiting, but also trimmings from pelagic whitefish and salmon, and a volume of 332,000 tons in first quarter, down from 380,000 tons same quarter last year, and we are estimating volumes 50,000 tons in 2025, down from 2024. When it comes to the food segments, we have had catches on herring and catches on Atlantic mackerel, which we have produced in our food factories. And it's been executed in a quite good manner and delivered a better result first quarter. This year was the same quarter last year. So all in all, looking at Pelagia, I would say that the result is more or less in line, and revenue of 3.7 billion NOC, EBITDA 20 million NOC above first quarter last year, just below 300 million NOCs, and EBIT of 175 million NOC. Now we are coming to the salmon, and it's quite pleasant for us to see that the measures we have done on both genetics, roe and smolt, and also how we are operating in the sea, has improved our biological performance. So despite spot prices is down with 90 nok per kilo, we are delivering I would say considerably better in Larry compared with the same quarter last year, 260 million knock-up on EBIT. Larry Harfisk, its lower quota, we'll come back to that, but also compensated on EBIT. higher prices, and we are delivering quite good in our VAPS sales and distribution, better than last year, which also was a very good quarter. So volume-wise, 38,000 tons. It's up at approximately 45%. It's divided with 7,000 tons in Leroy, 16,000 tons in Leroy-Mitt, and 15,000 tons in Leroy-Kjøttol. EBIT per kilo, all inclusive, 23.5 NOK per kilo, down from 25 NOK per kilo, but as I said, on much lower spot prices. EBIT per kilo divided by the different geographical areas is approximately 30 NOK per kilo in the north, 32 NOK per kilo in the mid and also 18 NOK per kilo in levee kjotroll. So all in all, we are improving our performance, lower mortality, better growth, higher slaughtering volume, and also better quality on our salmon slaughtered. Maintaining our guiding on 2025 volumes, 195,000 tons in Norway and expecting with our 50% share of Scottish to reach a level of 211,000 tons in 2025. When it comes to the whitefish, I would say we are delivering. If you look at our inventory, we had first quarter more or less on the same level as we did last year in the first quarter of 2024, but also based on a lower share of the cod. quota, which is the filet mignon of the whitefish sector. So half of the goldfish is quartered a quarter, leaving the remaining quota on the same level as it was in 2024. So you can see it's a drop of 32% of cold quarter in 2025 and had a quantized down by 2%. State quotas also don't, but it's been compensated by cold prices, which has been 35% higher in this quarter. Had a quote of 60% higher in this quarter and say quote the state prices has been approximately 100% up versus same quarter last year. Then I will give the floor to Britt.

Thank you, Arne. We start by summing up the raw material intake, and as you can see, there has been an increase in the volumes in South America, and that is mainly because there has been a very good fishing going on in the southern zone of Peru, but also a good start of the year for the fishing activity in Chile. In the North Atlantic, there is some decrease in the raw material intake, and that is subject to the decrease in quotas in that region. There has been a very good biological performance within salmon and troth in 2024 and also into 2025. And we have a higher slaughtered volumes in first quarter this year compared with same quarter last year. Arne has taken you through the highlights, so I will not repeat, but this graph gives a very good picture of where the increase in revenue and earnings are coming from. And as you can see, Lera Seyfried Group contributes the majority of that, with the Austral Group as number two. Looking at first quarter, revenue of almost 9.8 billion, up 17% from 8.4 billion. AEBT adjusted of just above 1.9 billion, up from almost 1.7 billion. and we have some increase in our depreciation and you have probably seen that we have had an investment program going on especially within Lerøy in new technology and also improvement in small quality and the facilities within Whitefish. Looking at the line income from associates, that is 35 million this quarter, down from 62 million. Arne has already been through Pelagia in the beginning of the presentation, and they have had some increase in their earnings in the quarter. Looking at Scottish Seafarm, they have had a decrease in their earnings in the quarter. and that is because of the substantially lower price achievement first quarter this year compared to the same quarter last year. The slaughtered volumes are up, and they have also had a very good biological performance. This gives us an EBIT including income from associate of a little bit above 1.4 billion, up 17% from 1.2 billion same quarter last year. I have to mention this fair value adjustment related to biological asset this quarter because it's quite substantial and it's negative. It's minus 1.8 billion. In same quarter last year, it was positive with 62 million. So this gives a negative operating profit in the quarter of minus 464 million. Looking into profit before tax, and if we take it before the fair value adjustment, it's 1,258,000,000, up 23% from 1,000,000,000 in first quarter last year. However, due to the negative biomass adjustment, we have a profit before tax, which is negative, minus 610 million. And the net profit is also negative, minus 195 million. And this gives close to zero earnings per share. But earnings per share, excluding the biomass adjustment, is knock 2.70%. I would recommend that you go into the webcast of Leroy to have some further information of their first quarter. But we can sum up here. The revenue was close to 8 billion, up from 7.1 billion. The increase in revenue was 12%, and that reflects the higher slaughtered volumes of salmon and troth in the quarter, but also higher sales volume within the WAP sales and distribution segment. Within Wildcatch, there has been reduced catch volumes because of the reduced quotas, but there has been a very positive price achievement in the quarter, which has to some extent compensated the lower quotas. EBITDA adjusted came in just below 1.5 billion, up from 1.2 billion same quarter last year, and the EBIT was 1.49 billion, up from 843 billion. Looking at Austral Group, as normal, there is a lower activity in first quarter. However, we are very glad to see that this year it has been a good activity in the southern zone of Peru. And the plant in the south in Ilo has bought over close to 67,000 tons of raw material in first quarter this year. And they had zero raw material in the same period last year. The sales volumes for fish meal, fish oil, and also frozen and fresh products are substantially up compared to the same quarter last year. However, the price achievements are down. For fish meal, the prices are down close to 24%, and for fish oil, 69%. That said, it was a very low volume of fish oil sold in the first quarter last year. The revenue in the first quarter was a little bit above 1.1 billion, up from 570 million in the first quarter last year. EBITDA of 187 million and EBITDA of 126 million, up from 57 million in the first quarter in 2024. Food Corp has also had a very good start of the year. They have caught almost 55,000 tons of their own quote of horse mackerel. In addition, they have purchased sardine and anchovy, a little bit over 27,000 tons. Also here we have had increased sales volume of finished products and the same pattern. Prices are down, fish meal down by 21% and frozen down by 9%. We have also seen some pressure on the prices for frozen in the start of the second quarter. Revenue of 425 million, EBITDA of 130 million and an EBITDA of 150 million, approximately in line with last year when the EBITDA was 108 million. Looking into the small salmon farmer on the western coast called Kobbevik of Furoholmen Oppdrett, they have slaughtered a substantially lower volume in first quarter this year compared with last year, 1,900 tons down from 3,200 tons. They sell all their fish in the spot market, and the spot prices are down with knock 19 kroner per kilo year on year. We have also seen an increase in cost. So their EBIT per kilo is NOC 27 in first quarter this year, down from NOC 33 same quarter last year. The operation there now are the two fishing vessels fishing for snow crab. Last year they also had the two pelagic fishing vessels. Those two vessels were sold in June in 2024. The two vessels fishing snow crab has caught and produced 635 tons finished products in the quarter. Last year they produced 825 tons in the first quarter. Of this production of 635 tons, they have sold 585 tons, and the prices have almost doubled compared with first quarter last year. So this is giving very good earnings for the company. The revenue was 159 million, EBITDA 66 million and the EBIT 62 million. And last year, the earnings and revenue, then it was the two pelagic vessels that contributed to the majority of the figures. But that said, they have finalized their quotas now in April, so those two vessels will have no further activity for the remaining part of 2025. Looking at our total assets by the end of March, it was 53 billion, almost at the same level as by end March in 2024, but down from December 2024. And just to comment one of the line, we have talked about this fair value adjustment related to biomass, and you can see that is substantially down compared with the end of 2024. We have a strong balance sheet, an equity ratio of 55%. The net interest bearing debt by end March is 7.3 billion. There has been a very good cash performance in the first quarter. The cash from operating activities was a little bit above 1.5 billion, up from close to 600 million in the same quarter last year. Some increase, and then we have a program going on in Leroy for some additional capex in addition to the normal maintenance capex. So cash from investing activities, minus 533, up from minus 484, same quarter last year. Looking into financing activity, we have paid on quite a lot on the short-term credits. So cash from financing is minus 1.5 billion. And that gives us an end position with cash in the quarter of 5.2 billion.

Then I will end this session by giving a view on the different markets we are operating within. And starting with the fish meal market. So by the end of week 17, you can see that the total increase from the largest producers of fish meal in the world is up with 5.4%. But it's mainly driven by the increase from Peru with an increase of 20%. You see, prices have been, I would say, on high-quality fish meal just north of $1,600 per ton. And there is a $240 per ton discount on lower-quality fish meal. And again, looking at the main market, China, stock situation at the moment, It's up 13% versus the same period last year, just north of 300,000 tons. But the off-tax is quite good, just below 27,000 tons a week at the moment. And you can see that the prices in China is higher than the Peruvian prices, stimulating to the increased trade. When it comes to fish oil, you also see that the fish oil production is up approximately 17% versus the same period last year. And it's mainly driven, again, by Peru, which is up with 54%. It's been quite good seasons, both in terms of volumes and yields. The latest tree season, including the one we are having now. So you can see also it has an impact on prices. For feed purposes, now in Peru, it's traded around $2,600 per ton with a premium of approximately $700-$800 per ton into the omega-3 grade. When it comes to the Atlantic salmon supply, we finally have had a very good year, and we are expecting an increase of 6.4% globally, and I can see Norway is up by 6.7%. And I would say that the growth all over Norway has been very good in the first four to five months. So if the growth is going to be in total 6.7%, we are expecting that the next coming months to the end of the year is going to be more or less in line with how it was in 2024. We are in a situation now where we have a lot of volume. We are building market and looking at expected growth next year. We also feel we are in a good position also for prices to recover by the end of 2025 and also into 2026. Prices considerably lower this season versus last season, same year, both the first quarter and so far into the second quarter. And the main reason for that is, again, it's been much higher slaughter volume and also the quality of the fish we have been slaughtering in Norway has been considerably better than the same period last year. Markets are good, consuming on the lower prices. EU 6%, other markets driven by China up 5% and US markets still important for the consumption of salmon up also 6%. So in the end, we are happy with the performance in the first quarter when it comes to the salmon activity. We are also seeing so far positive development into second quarter. And again, we have the highest net production in sea in the first quarter, reduced modality, declined cost, and also have a higher superior share. So all in all, on terms of biological performance, we also are expecting a good development into the second quarter. The reduction in whitefish quota has been compensated, I would say, so far with higher prices for the main species, which is a bit better than what we expected in the beginning of the year. South America, first season is well on its way, 3 million tons. So far, 1.2 million tons is caught. In our case, we have caught just over 40% of our expected quota. And it's also going to be exciting in the next month to see the development, how the fish is going to be distributed between coastal and the industry vessel in Chile, and from when it will have an effect. Pelagia delivering out, once again, a good quarter. Expecting a bit lower volumes also going forward. But second quarter is normally a seasonable low production quarter. And we are making, I would say, us ready for the humic or sanctioned fishing. It's going to start up with approximately within third quarter. So that was what we were thinking to say, and thank you for listening, and have a good day.