Bakkafrost U/Adr

This morning we will go through the performance of the group, the developments in the Selma market, financial results, the progress we are making in the operation across our regions. We will also be sharing the expectations for the rest of this year and also the plans for next year. As usual, the presentation contains forward-looking statements that are subject to uncertainty, so please refer to the disclaimer in the published presentation. So first, a summary of the quarter. The group delivered an operational EBIT of 128 million in this quarter compared to 22 million in the third quarter last year. Revenues were broadly unchanged at around 1.7 billion. We harvested 27.6 thousand ton in the quarter, around 10% below last year, with lower volumes in both the Faroes and in Scotland. In the Faroe Islands, biological performance remained strong, although we harvested smaller sites, which contributed to higher unit costs. In Scotland, we continue to see improvements in the biology, but low harvest volumes, harvesting smaller fish, and some biological challenges affected also the result in this quarter, especially in July and towards the end of the quarter. In the FOF segment, we have capitalized on our inventory of fish meal lying at low cost price, leading to very strong results in the quarter and more than doubling the operational EBIT for that segment compared to last year. Marine sourcing was low, 9.6 thousand ton, significantly lower than the same quarter last year, while feed sales were broadly unchanged. Overall, this quarter was a quarter with improved earnings year-on-year, despite lower harvest volumes, continued pressure on salmon prices in a market with high global supply. Looking at margin development across the two farming regions, in the Faroes, the integrated value chain generated an operational EBIT of 11.57 Danish kroner per kilo, up from 8.93 last year. In Scotland, we reduced our loss per kilo from 38.72 Danish kroner per kilo to 30.79 in this quarter. An improvement, but still far from being satisfactory. At group level, operational EBIT increased from 0.72 DKK per kilo to 4.61. In other words, improvements in both regions, but very significant differences in operational performance. Moving on to the Salmon market, starting with supply and then looking at demand and prices. According to the latest update from Contali, global harvest of salmon increased by around 5% in the third quarter, while quantity supplied to the market, if we include inventory movements, increased by almost 7%. Europe was the main driver, with a supply growth of around 8%. Norway continued to benefit from good biological conditions, lower mortality resulting in substantially higher production and around 9% increase in harvest. In September, Norwegian harvest has partially also been driven by accelerated harvest due to maximum allowed biomass limits. In contrast, supply from Americas declined by 4%, following several quarters with strong growth in the Americas. Despite increase in global supply, which has been ongoing now for several quarters in a row, the demand for salmon has been remarkably strong. So in this quarter, sale to the European market increased by approximately 10%, exceeding the 8% volume growth from Europe. We expect some of this volume to have been absorbed in the European processing industry with some buildup of frozen inventories. In the US, demand remains stable while supply from the Americas declined. Asia was more mixed, continued growth in China while Japan was weaker. We also saw strong growth in Middle East and Latin America. Salmon demand continues to demonstrate considerable resilience. Even with substantial additional volumes entering the market, consumption has continued to grow across most major regions. Turning to prices, the average reference price for four to five kilo salmon was 66.87 NOK per kilo, an increase of 5% year on year. Prices were 9% lower compared to previous quarter, reflecting the seasonal pattern and increased supply. Towards the end of the quarter, we saw premium for large fish normalizing. That has been under pressure during the whole year, but is now gradually returning to normal levels again. And that's important for Backerfrost as we focus on producing large, high quality salmon. Looking forward, the supply is becoming more favorable. Global supply is expected to decline in the fourth quarter, followed by very limited supply growth in 27. So combined with the underlying strong demand that we have seen, this provides a potential for a more balanced market environment going forward. and then moving on to the financial results and starting with the group P&L. The revenues in this quarter were 1 billion 681 million, broadly unchanged from the same quarter last year. Increase in operational EBIT from 22 million to 128. Improvement was mainly driven by stronger earnings in the FOF segment. and also reduced losses in Scotland, however partially offset by weaker contributions from other segments. Fair value adjustments were positive with 231 million and after financial items and taxes, the group reported a net profit of 191 million compared to 77 million in last year. This slide puts the current earnings into a longer term perspective. For the first nine months of 26, operation in EBIT has reached 944 million, thereby exceeding the 888 million generated through the entire last year. Adjusted earnings per share was 0.5 DKK, bringing the year total to 7.97 DKK per share. Our balance sheet remains solid with total assets of 19.6 billion at the end of the quarter. Equity amounted to 11.2 billion, corresponding to an equity ratio of 57% compared to 58% at the end of 2025. Property plant and equipment increased moderately to 7.3 billion as we continue investing in our value chain. We also saw an increase in inventory to 1.2 billion and receivables to 835 while the carrying value of the biological assets remained broadly unchanged. Cash and cash equivalents increased to 523 million up from 300 at year end. Overall, we maintain a solid financial position to support the ongoing operations and investment program. Moving to cash flow, cash flow from operations were 149 million compared with 245 last year. The first nine months, however, operating cash flow increased significantly to 875 compared to 631 in 2025. Investment cash flow was negative with 209 million and cash flow from financing activities contributed with 255 million during the quarter. Cash at the end of September was 523 million. Our net debt has increased somewhat during the quarter and amounted to 4.1 billion at the end of the quarter. That reflects ongoing investments, changes in working capital, partly offset by generated cash from operations. We continue to have substantial financial flexibility through our bank facilities with undrawn credit facilities of approximately 1.3 billion. Our financing arrangements provide a solid foundation for the Group's investment programme while maintaining a disciplined approach to capital allocation and liquidity management. This concludes the financial review. But before handing over to Rain, I want to point your attention to slide 31 in the presentation. I will leave that for self-study. But we have included it to give more details on eliminations, which can cause some struggle when trying to estimate the results for the group and also how that is split amongst the different segments. So we have three segments generating internal profits which are eliminated out on the biomass. That is from smalt, it's from feed and it's from the FSV segment. Those three segments have to date primarily been dominated by eliminations from smalt. but with the recent changes in feed prices, feed is picking up and becoming more dominant. So please have a look at slide 31 where we have included more details from the Faroese part of the organization and that can give some better insight in the dynamics of how those eliminations are working and have done so over time. So with those words, I will hand over to Regin to go through the operations.

Thank you very much. On this image, we have an overview of the northern east part of Faroe Islands where we can actually see a lot of our farming sites. In this quarter, we harvested from Ottenavur, Borjaug and Lambaug, which is further to the west and is not part of the image. Those were the three main sites that we harvested from in this quarter. So let me first start with our fully vertical value chain, which is a very important part of our competitive advantage in bakkerfrost. Challenges seem to change or shift between different parts of the value chain and our integration gives us greater control and flexibility in these challenges. A good example now is the raw material market, where we this year experience some of the most challenging conditions we have seen in the history of the industry. Fishing in the South Pacific has been exceptionally poor this year, resulting in a significant global shortage of marine raw materials, which has caused increasing prices on these. This is where our integrated value chain makes a real difference. Through Hausbrunn, we have control over production of fish meal, fish oil and salmon feed. Our strategic inventories of fish meal cover our expected requirements well into 27, allowing us to maintain a strong focus on feed quality, Fish Welfare and also the salmon nutrition. We maintain a relatively high proportion of marine ingredients in our feed, supporting fish health, omega-3 content, natural pigmentation and consistent product quality. Our new feed factory will come into operation in this quarter, adding an important advantage. It provides significant greater flexibility in feed formulation and raw material utilization. This flexibility will help us to manage the risk of persistently high marine raw material prices while maintaining our natural and quality standards. This is the strength of our integrated value chain, giving us greater control, flexibility and resilience, particularly while market conditions are challenging. We see strong feed sales in this quarter, rising raw material prices, and as we now move to Hafsbrunn we continue to see strong operations despite an exceptionally challenging market for marine raw materials. In the third quarter we sourced only 9,587 tons compared to 39,000 last year or close to 40,000, a reduction of 76%. The limited availability of marine raw materials reflects the challenging fishing conditions, including the exceptionally poor fishing in the South Pacific. However, feed sales remain strong. We sold 48,237 ton of feed, which is 2% down from last year. All feed sales in the quarter were to our own farming operations. and our strategic inventories have allowed us to maintain feed production and high quality despite the limitation of availability of raw materials. External fish meal sales dropped to 1,206 tons compared with 5,118 last year, down 76%. And external fish oil sale is close to zero, only six tons. When we look at the price chart for raw materials, we see that marine ingredients have significantly increased, reflecting the tight market situation. But financially, Hafsbrunn delivered a strong result, 209 million compared with 91 last year, an improvement of 118 million. And the margin increased from 12 to 24%. Year to date, operational EBIT reached 412 million compared with 244 last year. And looking ahead, we see a good flexibility with our new feed factory, with a good flexibility also to look into raw materials utilization and feed formulations. Combined with our strategic inventories, this will help us manage the risk of high marine ingredient prices while maintaining our focus on high feed quality, salmon nutrition and fish welfare. Coming to freshwater in the Faroes. We see continuation of progress in our strategy. We transferred 4.5 million smalt in this quarter with an average weight of 466 gram. The average smalt weight increased 9% year over year. The new hatchery in Skalavik is now in operation And the second batch is entered production. We have increased the 26 transfer plan to 20.7 million versus 20 previously. For 27, we plan approximately 21 million at an average weight of 440. The operational EBIT was 68 million compared with 83 last year, a reduction of 15. Per kilo, this was 47.31 Norwegian kroner compared with 64 last year, and a margin of 30% versus 36. Year to date, we see 240 million in EBIT, Danish kroner, compared with 225. Coming to the farming operation in the Faroe Islands. In this quarter, we harvested smaller sites. As mentioned, Oddnafjord was the weakest site in the quarter. The average weight of the fish in Oddnafjord was 4.5 kilos. 4,600 ton out of the 23,000 was from Oddnafjord. 4.5 and the reason for harvesting smaller fish in Ottenafjord was CMS. We had some CMS issues in Ottenafjord and that's why we harvested early to maintain a high fish welfare. The average harvest size in the quarter was 5 kilo for all fish compared to 5.2 last year. Ringside cost in the quarter was 7% up from 29.20 to 31.20, so two Danish kroner higher cost per kilo in this quarter compared with last year. The mix of these sites, smaller sites, contributed to the increase. Firstly, if you look at feed cost in this quarter, feed cost was 16.33 Danish kroner per kilo, which is 45%. So the increase was 0.89 kroner, so 89 øre per kilo, an increase in this quarter compared with last year, up to 16.33. And that was 45% of the difference from last year, of the total difference. Secondly, As we have harvested smaller sites, they are a bit less productive. So we have a bit higher salaries, which is 1.5 kronor per kilo. The difference is 30% up. So from 1.20 to 1.50, something like that. But cost discipline is still a very high focus with Bacchafrost, and we have focused to reduce costs going forward, which is a part of our approach for next year. When you look at the biomass in this quarter, we had approximately 56,200 by the end of the quarter, compared with 57.3, so 1,000 ton down. So a relatively stable biomass position. Feed consumption was 35.4 thousand ton compared with 38.7 thousand last year. Sea temperature during the quarter was somewhat about the historical average. Farming operation improved 21 million in the quarter from minus 29 to minus eight. Operational EBIT improved from minus 178 Norwegian kroner per kilo to minus 0.5 kroner per kilo. The operational EBIT margin improved from minus 3% to minus 1%. So although earnings have improved, the farming segment remains slightly negative during the quarter. Year to date, harvest volumes in Faroes are around 75,000 ton, compared with 60 last year. So up around 15,000 ton. Operational EBIT increased to 487 million, compared with 262 last year. This reflects significant stronger performance over the first nine months. So overall, we remain satisfied with the biological development in the Faroe Islands. while maintaining strong focus on cost efficiency and harvest performance. Looking at the recent completed production cycles, we still see difference in biological performance in the farrows. There are some sites slightly more efficient than others. In particular, we see opportunities to improve growth and reduce mortality going forward. The average full cycle mortality in the faroes is around 10%. And if you calculate the GSI number, we are around 6%. Our aim is to come down to around 45%. So our focus is not only increasing production volumes, but also on improving survival, growth, and feed efficiency through the entire production cycle. Looking at the services in the Faroe Islands, our service activities continues to operate reliable during the quarter. The segment covers fish transportation and treatments, farming support, harvesting, and packaging, as well as our biogas operation. An important biological indicator is survival during the first 90 days after small transfer. In our third quarter numbers, survival was approximately 97.6% in the first 90 days. Broadly unchanged from the same quarter last year and slightly improved from the second quarter. The output from this quarter was 28 million Danish kroner compared with 38 last year. The operational EBIT per kilo was 1.49 Norwegian kroner per kilo compared with 1.97 last year. The EBIT margin declined from 15 to 12% in this quarter. However, year to date, operational EBIT increased to 105 million Danish kroner compared with 93 last year. So our focus in this segment remains to be to focus on efficient operations, fish welfare, and maintaining reliable services capacity through the production cycle. The WAP activity and the growing exposure to the US market. So when we look into the sales segment and other, We continue to see strong activity in value-added process and increase in this activity. Volume transferred from Faroese farming into WAP increased 19% in the quarter from 4,823 ton to 5,719 ton in this quarter. This corresponds to approximately 25% of the Faroese sales volumes compared with 19% last year. At the same time, our sales of whole gutted salmon declined 15%, from 25,855 to 21,915 in this quarter. The sales volumes was 27,634 ton, compared with 30,678 last year, a reduction of 10%. When we look at the market development, We see a high, strong increase to the US market. 33% of the Faroese sales went to North America compared with 24% last year. Western Europe accounted for 47% compared with 56% last year. This reflects a changing geographical sales mix and the importance of maintaining access to several attractive market regions. However, increased global supply continues to put pressure on price premiums in this quarter. The segment operating revenues increased by 7% from 2.462 billion to Danish kroner 2.641. Operating EBIT was 62 million compared with 73 last year and per kilogram from 3.75 NOC to 3.28 NOC per kilo. The EBIT margin was 2% compared with 3% last year. Year to date, operational EBIT reached 224 million compared with 211 last year. We focus on Investment in processing in value-added products and also flexibility and access to many markets. So coming to Scotland, looking into the freshwater segment, we see Uppercross is ramping up. We see improvement in production efficiency. Applecross is central to the improvement of the biological and financial performance of our Scottish farming operations. As we have explained previously, the expansion of Applecross was a substantial investment and the commissioning process has been challenging. Following several Technical and biological setbacks, production has become more stable and we are now seeing a significant increase in production. The average number of fish in upper cross tanks increased by 1.4 million to approximately 12.8 million fish by the end of the third quarter. Quarterly smalt production increased 74% from 340 ton in the second quarter to 592 ton in this quarter. This is encouraging and demonstrates the progress in scaling up the production. During the third quarter, we transferred 2.9 million smolt, compared with 3.6 last year. Of these, 1.2 were externally sourced, compared to 0.9 million last year. Average weight of all transferred smolt increased 7%, from 155 to 166 gram. From apple cross, the average weight of transferred fish was 221 gram, compared with 229 last year. If you look at the cost development of the smalt operation, we are still far behind. It takes time to get the cost down to a reasonable level of transferred fish. We have decreased the cost from 236 in the second quarter to 180 Danish kroner per kilogram in the third quarter. And this corresponds to 63 kroner per kilo in the Faroe Islands. So roughly three times higher per kilogram. But I am pretty sure that we will end up more or less in the same position. So this is still in the scaling up process. However, we see a significant quarter-on-quarter improvement. So we are in good faith on the expectations. Operational EBIT improved to minus 14 million compared with minus 38 last year. The EBIT margin improved from minus 51 to minus 22. So we remain on track for approximately 10 million small this year with an average weight of 179 gram. For 27, we plan to transfer 11.5 million smalt with an average weight of around 222 gram, all from own smalt production. This also includes small batch from our own native hybridian strain, which is produced for us by land catch, which is classified as internal smalt supply then. So increasing production and capacity utilization at Applecross is essential for reducing unit costs and improving the performance of our Scottish farming operation. We believe that eventually we can, with large small-form Applecross, we can farm the fish in the marine sites only one year in Scotland. So coming to the farming operation, the marine farming operation in Scotland, biological improvement, profitability still remains challenging. The Scottish farming biological and financial performance remains challenging, although we are seeing encouraging developments. We harvested only 4,537 ton in the quarter compared with 5,286 last year, a reduction of 14%. The average harvest weight was only 3 kg in this quarter, compared with 4.8 last year, a reduction of 38%. This is clearly not satisfactory. We harvested several challenged fish populations during July and September, which affect both harvest weights and financial results. Some of these challenges are also expected to influence the fourth quarter. So one encouraging development in Scotland is the reduction of exceptional mortality cost. Although these are still far too high, they have come down. In this quarter, 42 million compared with around 70 million last year. This represents a reduction of approximately 40%. Also, the survival chart provides an important evidence supporting our larger small strategy. After 12 months at sea, we see the largest small groups achieving approximately 84% survival compared with 71% for the smaller groups. This difference of around 13% points is encouraging and supporting our strategy. We want to increase small size and reduce the time the fish is in the sea, although performance also depends on other biological and operational factors. The operational and financial performance improved on the epicite by 53 million Danish kroner, from minus 191 to minus 138. Abit per kilogram improved from NOK minus 57 to minus 45. The abit margin improved from minus 96% to minus 73%. However, year-to-date operation remains negative at 340 million Danish kroner compared with 302 last year. The ringside cost, if you look at only the ringside cost, when the fish is ready for harvest in Scotland, increased from 48 Danish kroner per kilo to 50 per kilo. So that's slightly 20 kroner in difference from the Faroe Islands. Of these 20 kroner in difference, 30 to 50, of these 50, around seven of those are small cost. So one-third, because the utilization of capacity is low. And of course with the low volume at the moment, as volumes are coming up, the remaining 14, the two-thirds, will also be reduced significantly when volumes are increasing. So we are seeing a path to better operations in Scotland. Next year we will slightly increase our volume. The main thing is that we want to do it safely and move to internal smalt only. So one slide more on Scotland, one extra. This illustrates the structural transition now taking place in our Scottish farming operation. Our objective is to replace smaller and externally sourced smalt with larger internal smalt. In 2025, approximately 63% of our smalt transfer were internally produced. During the first nine months of 2026, this year was approximately 61%. For 2027, our plan is to reach 100% of internally produced smalt, eliminating the needs for external smalt purchases. In both 25 and the first nine months of 26, approximately 26% of the transverse malt were 200 gram or larger. For 27, our aim is to increase this to 75% of large malt, about 200 gram. This represents a substantial change in the quality and the composition of the future small transfers. However, the transition in the sea will take a bit more time. Our current forecast indicates that the shear of biomass originating from large mold in the sea will increase from approximately 22% in the first quarter of 27 to around 70% by the fourth quarter of 28. or the same period the proportion of biomass originating from internally produced malt is expected to increase to 100%. We expect that this should improve survival and growth and reduce the duration of marine production cycles. During shorter cycles we should see improvement of biology. Okay, so that concludes our review of the operational performance. In the Faroe Islands we continue to operate from strong biological and operational platform, although costs and performance vary between farming sites. In Scotland we are progressing with a strong or with a structural change required to improve biological performance and operational efficiency. And let's now look at the outlooks. We see a limited supply growth in front of us. We have, as discussed earlier, We expect global increase by approximately 5% in the third quarter, or we saw around 5% in the third quarter, while volumes supplied to the market increased by almost 7%, including the inventory movements. Europe was the main driver with growth of approximately 8%. In the fourth quarter of 26, this quarter where we are now, we expect global harvest to decline by approximately 3%. In the Americas, harvests are expected to decline by approximately 13%. European production is expected to remain broadly stable, with a growth of around 1%. In 27, we expect very limited global supply growth, European harvest volumes is expected broadly unchanged and global supply growth is expected at approximately 1% for the year with somewhat higher growth in the Americas. So this represents a significant change from a very strong supply growth experienced in 25 and most of 26. Demand has remained resilient despite the significant increase in available volumes. We therefore expect a more balanced supply environment going forward, although actual prices will depend on demand development, inventory movements, and market conditions. And as we saw on some of the pictures, salmon is at the moment one of the cheapest alternatives in the protein market. So that's a bit uncommon. When we look at our own numbers, we maintain our guidance for 26 at 170,000 ton. Faroes could deliver more. We will see how it goes by the end of the year. But we remain the number in our guidance of 97,000 ton and 20 for Scotland. For 27 next year, we increase to 125,000. We maintain 97 for Faroe Islands. Despite that, as you know, we have increased our stocking, so we should have a stronger base. In Scotland, we lift our guidance to 28. We have also a stronger base to achieve this in Scotland with the increased number of smalt that we have transferred this year. The planned increase for the group harvest will therefore, as you see, mainly come from Scotland. Our quarterly plan indicates stronger volumes, especially from the second half of the year of 27, particularly in Scotland. On the small transfer, we expect to increase from 30.7 to 32.5, so 1.8 million up from this year. In the Faroe Islands the plan is to increase from 20.7 to 21. In Scotland from 10 to 11.5. When we look at fish meal, oil and feed, we expect higher production volumes of fish meal and oil compared with 26. The blue whiting quota was reduced in 26, which limited raw material availability for half sprung. However, the coastal states have now agreed on a total blue whiting quota of approximately 1,064,000 ton for 27, which is an increase of 25%. This is encouraging for Hasbjorn and should improve raw material availability, providing catches and landings as we expect. We expect feed production to increase from 175,000 tons this year to 185,000 next year. On the contract side, we intend to enter into sales contracts covering approximately 15 to 25% of our expected harvest volumes. So we are going to make a bit more contracts again. Our priorities remains sustainable production growth, improved biological performance, and efficient utilization of our integrated value chain. So just to remind you on our graph from the Capital Market Day, which we have updated just with the new numbers for next year, 5 billion investments over five years included maintenance investments. And this is intended to support our sustainable growth with improving efficiency and reducing biological risk. We invest in the Faroe Islands. We invest in the Faroe Islands to increase fresh water capacity and now Skalavik is ramping up, being finished built next year. In Scotland main priorities is the utilization of existing infrastructure, but we need also some development of farming sites and also slightly better processing site capacity, especially harvest. So we still expect to reach our 162,000 ton target by 2030, whereof 112 is planned for Faroes and 15 Scotland. And still, we are focusing very much on cost discipline. We have special programs to reduce costs and target cost reduction. So this will be a high priority now for the time going forward. And also when you come to capital expenditures, some of the investments have been postponed slightly, but we still expect to reach our targets. The investment plan indicates a reduction from approximately 8.6 kroner per kilo in capex to around 5.5 in 2030. So our main focus remains disciplined capital allocation, ensuring that investments support biological performance, operating efficiency, and long-term shareholder value. So this concludes our operational review and outlook. We have included additional information in the appendix covering our segment results, biological performance, market development, investment plans, and as Øykne mentioned, some insight into our eliminations. Thank you for your attention. And now we are happy to take your questions.

Hi, Alex Hockner from D&B Carnegie. Could you talk a little bit about the lost certification on blue whiting, how that's going to impact you in 2027? You also state that you plan to sell more external volumes in 2027, and this year volumes are down 40%, next year it'll be up 25%, but that's still down 25% versus 2025 level. So yeah, help us connect the dots there, please.