Bakkafrost U/Adr

by Rein Jakobsen, which will take over the presentation in a while. So the agenda this morning we will come to after paying a short notice to our disclaimer on forward-looking statements. You can read it entirely. It's included in the published version of the presentation. So the agenda is the usual agenda, first the summary of the quarter, then we look into markets and sales, moving on to finance, operations, and then finally outlook. So an overview of the third quarter for Backer Frost. Our revenues in this quarter were 1.7 billion. We had a group operational EBIT of 22 million. The harvest in the Faroes was up by 17.5% to 25.4 kiloton. In Scotland, we were on a similar level as in the same quarter last year, 5.3 thousand ton. Fish meal oil and feed division at Hafsbrunn, the feed sales were up 18% to around 49 thousand ton. We sold no fish oil. Fish meal sale was down by 45% to around 5.1 thousand tonne. Sourcing of marine raw material was on the same level as last year, around 40,000 tonne. Cash flow from operation were positive with 245 compared to 575 last year. And we had positive EBIT in the fish, meal, oil and feed segment, the freshwater segment in the Faroes, services and sales and other. If we look at margins on a high level and regional level, These are all inclusive margins by the way. The margin for the group was 0.72 Danish kroner per kilo compared to 6.38 the same quarter last year. In the Faroes, the margins were 8.93 Danish kroner per kilo compared to 14.35 per kilo last year. In Scotland, margins were negative with 38.72 Danish kroner per kilo. And then moving on to markets and sales, and beginning with the price development. The Selma prices in this quarter were affected by a large increase in the overall supply. Average prices for four to five kilo superior salmon dropped to 63.73, which is 13% lower than the same quarter last year, 15% lower than in the previous quarter. or corresponding to a drop from the previous quarter of around 11 NOK per kilo. Since late August, prices have been trending upwards again. We expect stronger Selma prices as we look ahead into coming quarters where the supply is expected to reduce. In this quarter, we also saw that the price premium for large fish is starting to increase again after having dropped quite sharply from the peak in the fourth quarter last year. According to the latest update from Contali, global sales increased 12% in the quarter compared to last year and actually increased to all markets except for the Middle East. The European market had an increase of 4%, which was lower than the other markets. Like in previous quarters, this is significantly below the European harvest, which means that a larger share of the European harvest has been exported to other markets. Sale to the US increased 13%. Contagly estimates that there was a 10% increase in the supply from Europe. Chilean export to Russia increased quite significantly. There might be some inventory buildup in that market as well. Strong growth in sales to China and to Japan and also to the ASEAN countries. And the same goes for Latin America, which grew 12%. If we look at the harvest in the quarter, it increased by 12.2%, slightly more than the increased sold volumes. So again, some inventory built up. All producing origin increased their supply, except for UK, Ireland, and the US. Europe as a whole increased by 12%, mainly driven by Norway, which was up 15%. Supply from Norway was especially strong in July and in August. Norway had a high incoming biomass to the quarter after a strong second quarter, generally good biology, high sea water temperatures, but we saw also some accelerated harvest in the quarter, partly driven by sea life pressure. In September, the strong growth in Norway eased off and we saw We also see that the overall feed sale, which was very high in the beginning of the quarter, dropped quite significantly. And the biomass at the end of the quarter in Norway is also lower than last year. In Scotland, harvesting dropped with 5%. However, feed sales were up with 4% to 5%. Average weights increased slightly, 2.5% to 4.5 kg. In Bacchafrost's case, we increased 13% on our average weights to 4.8 kg. Biomass is low at the end of the quarter in Scotland, so we expect that there will be lower volumes coming from Scotland in the fourth quarter. In the Faroes, harvest increased 3%. This was driven by Bacchafrost. with a 17.5% volume increase from Bacchafoss alone. Very strong biology. For Bacchafoss it has been the strongest quarter, every quarter, when it comes to biology. Average weights for the ferrous as a whole, 5.38 kg. Bacchafoss was a bit lower on average weight in this quarter, which Rain will present in more details.

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by the activities in our fish meal oil and feed division receivables increased with 145 million to 286 million and cash equivalents sorry equity ratio dropped to 57 percent Moving on to cash flow, 245 positive cash flow from operations. We spent 311 million on investments and we had a positive cash flow from financing of 147 million. Net change in cash during the quarter was 81 million. During the quarter, our net interest-bearing debt has increased to 4 billion. The main driver are the investments, net investments of 311 million. And at the end of the quarter, we had undrawn credit facilities of around 1.4 billion. With those words, I will hand it over to our CEO, Rein Jakobsen.

Good morning, everyone. Thank you. So I will start with the value chain, which is our pride in Back of Roast. The power of our fully integrated value chain is what defines us. And in Back of Roast, we produce salmon from raw material to healthy premium salmon, which are enjoyed by our customers around the world. In 2025, we produce around 3.5 million meals per day, and that will increase over the next four or five years to 5.6 million of healthy salmon, 5.6 million meals of healthy salmon per day. And we control every step from feed to food, securing quality, efficiency, and biological resilience through the system. The integration is not just about efficiency, it's also very much about knowledge, control and responsibility. Ensuring that every step and every stage supports the next. Our value chain transforms low value marine proteins to high value, sustainable nutrition, efficiency, responsibly and with full traceability. This is what creates high value and this is what will make the difference for Baccarfrost in our competitive advantage also in the future. When we look into the third quarter, the first segment have stable operations. and an improving cost base with the volumes that we produce. The FOF segment delivered a solid operational performance with higher feed production, but reduced external sales of fish meal. Marine raw material sourcing was unchanged compared to last year, around 40,000 ton. The feed sales, however, increased 18% year-on-year, up to 49,000 ton, driven by strong demand of our own salmon, feeding both in Faroes and in Scotland. External sales of fish meal was down 45% compared with last year, as inventories continued to be built up ahead of 26, when raw material availability is expected to tighten following the 41% reduction of the blue whiting quotas for next year. The operational EBIT was 91 million compared with 147 last year, 38% down, corresponding to a margin of 12% versus 20 last year. The fish meal prices remain firm through the quarter, supported by limited global supply. Fish oil prices have stabilized after a prolonged decline from record levels earlier in 24. Vegetable ingredients continue a slight upward trend, but overall input costs decreased, improving cost balance for feed and farming in H2. The planned expansion of the capacity at Hafsbrunn remains on schedule and will be finalized within the next six months. The new silos and process lines will increase flexibility in raw material sourcing and enable also more efficient feed logistics across both geographies. The FOF segment remains a cornerstone of Baccafrost integrated model, ensuring nutritional quality, cost control and supply stability across the value chain. The freshwater segment is strong in the Faroe Islands, is stable and continuously improving quality and survivability for the marine operation. The Faroese freshwater operations maintained strong biological performance and stable financial result in the third quarter. The smalt production continues to operate at high levels following expansion in Gliradell north of the Randvijareie, with all sites now in steady operation. A total of 4.8 million were transferred during the quarter, versus 4.9 last year. The average weight was 427 gram, up from 423 last year. Year to date, 13.4 million smalt have been transferred, versus 11 last year. The average weight and robustness of the smolt continue to improve, reducing biological risk and strengthening the fish welfare at sea. The operational EBIT was 83 million versus 84 last year, corresponding to a 36% margin. The post-transfer survivability remains at 97% to 98% during the first 90 days at sea, which are among the best levels in the industry. In parallel, of course, the feeding in the hatcheries have increased significantly, which we can see on the graph below. It's a utilization of the new hatcheries which have been increased significantly over the last quarters. And that's also the driver of the reduced cost in this segment. The full year stocking plan remains 18.5 million and is expected to go up to 20 million next year. The capacity utilization and biological efficiency continues to strengthen with clear cost benefit from larger and more robust smolt. The Ferris Freshwater Division continues to deliver consistent high-quality smolt with strong survivability, providing the biological foundation for long-term sustainable growth across Backer Frost. Coming to Freshwater Scotland. The third quarter, the transfer number were 3.6 million versus 1.9 last year. The internal transfer from own hatcheries was 2.7 versus 1.2 last year. The average weight of the internal transfers molt was 229 gram versus 88 gram last year. The margin was, however, minus 38 million versus minus 6 million last year. The negative result is primarily driven by losses from the disease in Q2, where fish were culled to clear up the impacted batches. This also affected the third quarter. Following the organizational change in August in the freshwater division, Bakkerfors has reviewed all operational procedures and technical systems and implemented a plan for safe and stable production. This includes revised production strategy, optimizing capacity use, and biological performance. Uppercross is therefore now a fully closed production, where only eggs are brought in and all water is cleared and disinfected and recycled. This ensures a high level of biosecurity and full control of water quality, enabling the production of robust large smalt of a higher quality. Since August, the production has been stable without major challenges. And under the new plan, Applegross will produce two to four hundred gram fish in the future. So we will have a more flexible approach to the production plan in order to optimize the production facility. Experience from the Faroe Islands confirms that this is the key foundation for achieving a strong biology in the marine operation. Cost per smolt, also at Upper Cross, will come down significantly over the next 12 months, the financial performance of the freshwater division in Scotland. This year, the target is to stock around 7 million, all in Scotland. And next year, we lift that to 10 million. After several challenging years, Backyard for Scotland is now in a phase where we feel that in the freshwater, we are more in control. and we shift from stabilization to sustainable growth. The Scottish business will continue to replicate the integrated ferrovis model with full value chain control, strong biosecurity and sustainable growth. The long-term goal is to build a resilient, competitive Scottish salmon operation capable of producing premium large fish with high biological stability and profitability, fully aligned with Baccarat Frost's mission to produce the best salmon in the world, sustainably and responsibly. The focus is on biological risk management through the large production mirroring the proven model in the Faroes. The Apple Cross hatchery is now scaling up to produce healthy, robust malt about 200 gram. This shift will shorten the marine cycle, strengthening the fish health, and reduce the mortality, with clear improvement expected from 26. Coming to the farming operation in the Faroe Islands. Exceptional biological performance, record efficiency, but low market prices. The Faroese farming operation continued to deliver outstanding biological results in the third quarter, marking the best performance ever recorded in Baccafrost. The total harvest reached 25,400 ton, 70% up quarter-on-quarter, and 33% higher year-to-date, compared to 24%. reflecting strong growth and high biomass in the water. The average weight of harvested fish was 5.2 kilos versus 5.3, slightly lower but solid. Biological excellence was driving the efficiency. Ring cost reduced 14% in the quarter, year on year, 14% year on year. reflecting improved site efficiency, high survivability, and strong feeding performance. Quarterly feeding increased 32% versus last year, with new all-time feeding record set in October. Biomass growth is up 33% year-on-year, showing the cumulative impact of larger, more robust smolt and stable sea temperature throughout the summer. The operational EBIT landed at minus 29 million, as the benefit from lower cost and strong biology was offset by the lower salmon prices during the quarter. The EBIT was 178 NOC versus minus 207 last year, confirming solid biology performance despite the market headwinds. The biological situation in the Faroes remain among the best in the global salmon industry, characterized by record high survivability, highest in more than 10 years, strong growth rates, and feeding efficiency, and excellent fish welfare. In Scotland, the farming operation is volume is down 2% to 5,300 ton versus 5.4 last year. The average weight was 4.8 kilos versus 4.2 kilos last year. So 600 gram up. The operational output was minus 191 versus minus... last year. The negative result was impacted by mortality cost, 70 million, and also driven by lower volume and significantly lower market price. The Portree disease impact was the main driver for the huge deviation. During September, Portree experienced elevated mortality in this malt driven by the Pasturella disease, which was confirmed through screening. We had to take all fish out. The site is empty. It was emptied within around four weeks. This pasturella is driving a huge mortality, so we decided to harvest everything as soon as possible. The fish was only 2.6 kilo at the time, one million fish. So we lost, of course, a lot of volume and had to harvest the fish at a low weight. Performance. on this site was expected to be good, but as we harvest the fish at a low size, they will not give any value. The risk of disease in aquaculture is one of the industry's most critical biological challenges. Fish are exposed to a complex mix of pathogen, environmental stress and handling factors that can quickly escalate if not managed properly. Effective biosecurity, robust smolt and early detection are essential to minimize the disease risk. Backerfrost works continuously to improve our procedures and systems for fish health and biosecurity. The experience and methods developed in the Faroe Islands serve as an important model for our operation in Scotland. The Portree outbreak reduces the harvest, but larger, small and improved freshwater performance point out a recovery for our operations from 26. We are constantly gaining new insight both in Faroes and in Scotland, which used to strengthen our practices and to ensure better biology results over time. And for three, I can say that these batches were impacted already in freshwater. They were large. And they were performing good in the first six months. But they were impacted. The input mortality was 19% within the first 90 days. Even so, they performed good. They did not have the capability to handle the stress events that they were going through. And they caught this Pasteurella virus, which is, we don't see this in our farms normally. And this can give a lot of disease, and that's what we have seen in Portree. So in order to prevent this, it's really important for us to have this robust smolt, to have fish which has not been exposed to stress levels during the freshwater phase. That is the key for avoiding these kind of issues. So the strategy remains the same for our operations in Scotland to reduce the risk for this kind of events. Coming to the services segment, the fleet performance continues to drive biological success in our farming operation. Operating EBIT doubled to 38 million versus 19 million last year. corresponding to 2 kroner and a margin of 15%. The integrated vessel operations cornerstone of biological control is driven by the freshwater treatment. Bacchophosphorus in Pharos has been pivotal in improving biological stability in the Pharos. together with Martin and Bacchanes, which are now fully integrated into small transport in Faroes and Scotland. The two FSVs are dedicated to small transfer, ensuring nearly 98% survivability. Increased vessel utilization across treatment, small transfer and harvesting. Record low small transfer mortality is the best ever recorded. The segment also include other farming service vessels to ensure highest quality of farming operation. The service fleet led by Bakkerfosser continues to underpin Bakkerfosser's biological excellence, operational efficiency, and sustainable growth in the Faroes and Scotland. And controlling these vessels for us is also key to drive the operational updates and also, in some cases, also deliver new technology. For example, the freshwater treatment, which was developed that started in backer frost. So coming to sales and other, operating as one backer frost continued to deliver solid results with strong volume growth and high quality product supply across both regions. The total volumes from harvest were 14% up year on year to 30,678 ton distributed to 15% higher HOG sales and 7% in the volumes transferred to WAP. The EBIT declined to 73 million as higher volumes were offset on spot market at low prices and stronger supply of superior fish in the market generally. The EBIT per kilo were 3.75 NOC compared with 8.64 last year, reflecting high global supply and tighter price achievement. Western Europe remains the largest market, but North America continues to see strong demand and increased its share to 24% from Faroes and 14% from Scotland. Asia continues to grow, now accounting for 15% from Varos and 18% of Scottish sales, driven by the rising demand in China. All in all, I think the one company approach commercial platform is strong and continue to strengthen our global reach and brand presence for Varos. But the lower premium in this quarter is driven by our high exposure in the spot sales, which also was from our side driven by the change in taxation in Faroes, where we feel it's necessary for us to be more in spot sales than we used to be. The outlook for backer frost and for the industry as general, I think can be described as tightening supply and an improving market balance. The global supply slowly shows that the supply is coming down in Norway and Chile with the reduced harvest following a strong first half in 2025 and also a strong first half of the third quarter. The market balance is expected to improve into the fourth quarter and early 2026 as global supply growth continues to moderate. Norway has declined volumes from Norway through this quarter due to biological challenges and MAB restrictions and fewer fish in the sea. Supply growth in 2025 is now estimated to be below 4% and expected to flatten in 2026. Faroe Islands remain above last year, supported by record biological performance and falling production costs. Full year harvest guidance for Faroe Islands is expected to be around 110,000 tons, all time high. reflecting stable operations and continued high survival for industry in general. In Scotland, volumes are expected to increase gradually as new generation of large, high quality small dentures, marine sites. For Europe overall, the strong growth phase is behind us. Europe harvests are expected to be flat, slightly up, maybe 2% in the second half of this year, and close to zero in 26, supporting a tighter supply-demand balance. Chilean harvests increased in the third quarter after a weak 24, but growth will normalize towards 26. North America remains stable with regular seasonal patterns. Overall, 25 supply is up, but growth has slown sharply in the second half of the year. And looking at 26, global growth is projected at around 2%, indicating a more balanced market and potential price support in the new year. If you look at Bacchafrost on our own numbers, Our roots in the Faroes are strong and they continue to drive steady growth across the group. Faroes volumes are revised up to 82,000 this year, which brings us up to 104 combined versus 97 previously. For 26, the harvest plan is 112. 92 from Faroes, and 20 from Scotland. The breakdown in 26 between the quarters are in the report, but I can mention them. In Faroes, in the first quarter next year, it's 24%. Second quarter is 24, third is 25, and the fourth is 28. So these numbers on this graph is for 25. But in the report you can see 26. And in Scotland next year, the breakdown is 30% in the first quarter, 14 in the second, 18 in the third, and 38 in the fourth. But you can see all those numbers in the report. So in 25, as I said, 18.5 million to be transferred to Marine and 7 million in Scotland. So 25.5 all in all, which is around 10% up from last year. And next year, 20... in 20 in Faroes and 10 in Scotland, which is then 30, which is another increase from this year. So we continue the growth in Bacchafrost, and we have high focus on cost reduction. We have high focus on the operation in Scotland. And I think that we are getting there. We are getting there. The raw material outlook is for the feed, for the fuff segment on the fish meal and oil is a bit challenged next year. The quotas for blue whiting is down 41% to 851,000 tonne. With the new expansion of Havsbrun, we have very good flexibility. We can manage any recipe, so we won't have a problem to produce feed. Of course, it might be challenging with the external sales of fish meal, which can drop slightly. But we will manage. Contracts, we say around 15% to 20%. We are open to negotiate contracts, but we need the contracts also, of course, to reflect the expected prices. So therefore, we have to wait a bit. We are getting to the last slide here. Just to repeat that our target for Baccar Frost is to grow to 162,000 tons by 2030. So we remain focused on growth still. We are also very focused on cost reduction. As mentioned earlier, our costs are down. In Faroes, around 4 kroner this quarter compared with last year, 4 kroner from 34, actually 5 kroner from 34 to 29 Danish. And in Scotland, they are down 2 kroner from around 50 to 48. So this remains a key focus for us. to get cost prices down. As volumes are increasing, utilization of assets are improving, and that helps significantly. And that will be the main driver for Scotland over the next two years. We also have a lot of projects, which includes the feed capacity, which will be finalized within the next six months. Larger, small capacity in Faroes and Scotland. Now, Uppercross is about to be finished. Now, it's about scaling up. In Faroes, we still have Skalavik, which will be starting operation already in the second quarter next year. Then we will have the first eggs in. It will be a gradual build-up then over the next two years in Skalavik. So we remain firmly on track with robust operations, a clear strategy, and the investments needed to secure sustainable growth and long-term value creation. Challenging quarters test us, but they also make us better. Calm seas never made a skilled sailor. And Backer Frost is ready for the journey ahead. Thank you very much. If there are any questions, then now is the time.

Can you comment on how much extraordinary mortality we have in Scotland freshwater and farming in Scotland so far in Q4?

So far in Q4. In freshwater there shouldn't be any. In marine there will be some mortality. In Scotland, what you account for as extraordinary is everything which is above 4%. And there will be some. Do we have a number on that? No, probably.

In marine, if we look at Q3, 71% of the mortality was portrayed.

71% of the mortality in Q3 was from Portree. And Portree was harvested out in the second or third week, I think, in October. So there is some mortality. I think the number in the fourth quarter was 3.7 million pounds. So far in the fourth quarter. 3.7.

And so based on that, do you expect positive ebit from freshwater Scotland in Q4?

No, because the capacity utilization is really a driver. We have built a mega structure there, which will be really, really good. It will be really, really good when it is in full operation. But just as in Faroes, the utilization of the costs is takes time. You need a full production before you have a big operation but produce a low production. But as we scale this up over the next 12 months, we will see costs to come down. Now, the cost price in the Faroe Islands to produce one smalt of 500 gram is less than the cost in Scotland to produce a smalt of 80 gram. And we will match that in Scotland, but it will take us probably two years before we will match that. But at the moment, we are far off.

And in your sales and market segment, if you compare this quarter to Q2, you have quite similar EBIT, but the spot prices were much lower. So I would have assumed that you would have had a bigger contract gain in Q3 than you had in Q2. But is it big, is it price premiums that hurt the sales and market segment or why is the EBIT not higher?

In the third quarter? Yeah. I think one of the big drivers there is that Baccarat Frost has a much lower contract share than what is reported in fishpool. When you look at fishpool or sea salmon or whatever you call it now, it's a certain inclusion of contracted fish. And as Bakkerfoss has a much lower contract share, our average price is lower. We used to have around 30 to 40% in contracts. Now we are at 15 to 20. And that means that our variation in EBIT follows more closely to the spot price. So when we look at our sales in the market, we are gaining good prices. But compared to the average sale of companies which have a higher contract share, we lose in quarters where spot price goes through the bottom.

And last question, do you expect farming costs in the Faroes to be stable next quarter to this quarter?

Yes, I think they will be stable. There has been a push down in cost price and feed prices is expected to go slightly up maybe next year, but there's still a push down because of the lack effect. And this driver applies for all the different cost items because it's driven by a good biology. a very low mortality and a good feed efficiency, and generally a good efficiency in the operation. Of course, feed costs account for the biggest deviation. Of the five, feed is around one of the difference. So the other four are other items.

Thank you.

Hi Lisa, you're from DNV. Could you elaborate a little bit more on your investments this year? Is it on the operational side or production lines?

Investments this year, yeah. So the big projects include the feed facility where we expand, we more than double our feed capacity. so that we can produce. We are really stretched at the moment. We are producing everything. So in order to match our growth in farming next years, we are expanding the feed capacity. But we are also expanding our flexibility in the feed operation. So that's a big part of this year. Then it's the hatchery in Skalavik, which is... This year, and that will also go next year, that investment is quite large, around 1 billion Danish, and it goes maybe over probably three years. So that's quite big. What else? In Scotland, of course, Applecross is about to be finished now. So this year, that's quite a lot. Then we have some farming investments, both in Scotland and Faroes, to... to support the increased operation. We are looking at a bit more exposed sites in Faroes. Within our licenses, within our around 15 licenses, we have 24 sites, but we can set up some new sites. So in our project over the next five years, we have five sites that we have identified that we can create new sites, but within the existing licenses. So that's the way we are growing our farming capacity in the Faroes at the moment. But also in Scotland, we also identified new sites where we can go more exposed. So this is also already part of the investments this year. Is there anything else? That's the big things.

Henrik Knudsen, Pareto Securities. Just following up on your comment on new sites in Scotland, how easy is it for you to get approval for just moving to less shallow waters?

Not easy, but it takes time. But we think that we have a good dialogue with authorities, but there's a lot of work that needs to be done, and it takes plenty of time. But at the moment, we have enough space, but in some areas we would like to move a bit further out, because some of the areas are probably not the best for the future.

Now in the FOF segment, less quota for next year, less production. but you're probably selling more internally. How do you envision the overall margin or the overall EBIT contribution from the FOF segment in 2026 compared to 2025?

Yeah, so feed, as you said, feed will continue to increase. And when it comes to fish meal and intake of fish or raw material, that will of course have a negative effect. It's a bit difficult to give specific guidance. At the moment, we can only say that the quota looks to go down. But there are also other aspects in this which are a bit difficult to comment. But I can say that normally, the blue winding catch is not all supplied to Pharos. A part of the catch are landed in other countries. And as the CODAS comes down, that's of course an opportunity for us to try to get our share of that. But I guess the prices will also go up. So therefore, for us to have this new plant, feed plant, where we will increase our flexibility with raw materials, where we can basically do everything is also important. Having the flexibility is really important also to be able to mitigate potential higher raw material costs in the future so that we potentially can use all opportunities.

Thank you. And also for the farming cost in the Faroes, you mentioned stable into Q4, but looking ahead into 2026, have you reached a stable level or is it more to come?

Giving guidance on costs in 2026 is stretching it a bit, but at the moment it looks stable. We will of course see how feed costs will develop, but I'm pretty sure that other costs at the moment are quite safe. Thank you. Thank you very much. Okay, one more question. Two more questions, okay.

Yes, go ahead. With the change in strategy in smalt in Scotland with 200 to 400 grams, the expected average weight for 2026 isn't that high. Of course, I would expect quite a share of external smolts. Just wondering if you can comment on how long you will be reliant on external smolts currently and how that share has changed with the new strategy.

Yeah, that's a good question. It's difficult to answer. Of course, we hope that our ability to manage our operation will improve because the track record so far has not been too good. But with the new management in place and now the building process finished, we are quite sure that we will be better in the future than in the past. So therefore, we have made this new strategy where we have a more flexible approach because with the systems now installed in Applecross, there is a better flexibility or a better possibility to produce a part of the fish to 400 gram and a part of the fish to 200 gram. That said, that means also that in order to reach the number, we will be a bit reliant to having some external smalls for a bit longer. So how big part? Maybe 20%. That could be a number, but there is probably some variation in that number. But that's maybe what we are looking at at the moment.

And that's 26, right? Yes, for 26, yes.

Thanks.

Kjetil Sjåsen with ProFund. I'd like to talk a little bit about the Pastorella event. I understand that it's mainly the smalt that is the problem, and that there was some weakness with the smalt. Can you please try to explain what was wrong with the smalt, you know, how you're going to solve it. And then, also if you made any consideration about if the bacteria could spread to other sites. And finally, if you, or either, in addition, if you have any quarantine for the site, so it will be out of business for a while. And then some comments about if there are any specific things that increase the risk for this bacteria, that if there is any special things you've noticed that makes, you know, if it could be some with, you know, long checks or if it's something with the temperature or, you know. So, yes, please.

Yeah, this is a good question. We passed this event. We have checked now all our sites in Scotland. So we have checked fish in all our sites. We have checked dead fish in all sites for pasturella. and confirmed that this was a one-site event. And we have also checked the sites where our treatment vessels have gone after Portree to see if we have spread the disease to other sites, and other sites have been confirmed no detection. No detection. So that means that the measures we have had in place with cleaning and disinfection of vessels, both treatment vessels and service vessels, have been working. So that's good. As I have understood, this disease or this bacteria or virus is a virus which is not normal. and have not been seen very often, but it can cause big mortalities. Why did we get this disease? I don't know. Our veterinarians say that if you have a very strong fish group, then might be this should not have caused this big mortality. But if you have a weaker fish group, so a weaker and a stronger, what does that mean? Well, we have seen in Faroes also that a robust smolt handles things much better. And when we look at our history in Faroes, we saw that, for example, when we talk about water quality, for example, in the hatcheries, For example, just temperature is really important. Being able to control the temperature through the whole operation from egg to transfer is really important. In Scotland, even in Applecross, we have not had that control to a full extent yet, or at least for that fish group. Now we are controlling the temperature. We are controlling the temperature in Applecross now. But this fish was transferred in December, January last year, and the control on temperature was not optimal. It was much better than it used to be, but not optimal. And then we know that we had also some diseases in Apicross. And this fish had also gone through some of these issues. So there have been some issues. And we saw that when this fish was transferred, the mortality in the first 90 days was 19%, which is an indicator that this fish despite that this fish performed really well in the first six months. And from January to August, they grew to 2.6 kilos. We were expecting to harvest them in January, next coming January, at more than five kilos. That was our expectations, which we have talked about. But they caught this disease and the mortality increased really, really rapidly. So we decided just to harvest everything in order to not to... to lose too many. So that is somehow the explanation that... And we had, I can add that we had a freshwater treatment in July, which the fish handled good. Then we had a new in August, and then started some mortality. And then we had a new in the beginning of September, so three treatments. And when you have these treatments, there will be some... maybe some scratch in the skin, or maybe some fish have some gill issues. And these are open doors for bacteria in the sea. And if you have a weaker fish, then they can catch a disease. If you have a strong fish, which have a good immune system, they maybe would handle it much differently. So that's the best answer I can give at the moment. Thank you. Thank you very much for today. Thank you for coming.