Icelandic Salmon AS

Thank you everyone for taking time to watch this Q2 presentation for Icelandic Salmon. My name is Bjørn Hembre and with me today I have our CFO Robert Robertson. After the presentation there will be a Q&A session where you can ask questions by raising your virtual hand or typing the questions in the chat of the meeting. First, a brief overview of Icelandic Salmon. Icelandic Salmon AS is a company that is listed on the Euronext growth market in Oslo and also on the Nasdaq First North market in Reykjavik. The company is the sole owner and parent company of Arnalags AHF that performs all operational activities in the group. We are presented through the value chain with our own smolt production with smolt capacity sufficient for 25 to 30,000 tons of harvested biomass. We have our farming operations in sea in three fjords in the west fjords of Iceland with a maximum allowed biomass of 23,700 tons. and all our production in sea is ASC certified. We also do our own harvesting in our harvest plant in Bildadalur in the Westfjords of Iceland. And the capacity of the harvesting facility is 30,000 tonnes per year. And the harvesting plant is BRCGS certified, which is a food safety standard. And we also perform all the sales in the global and domestic market with our own sales department located just outside the Reykjavik and see big benefits of doing that. So if we jump to the highlights of the quarter, The harvested volume in the quarter was 5,500 tonnes compared to 4,000 tonnes in Q2 2025. Harvest was from the 2024 generation and we had an average weight of the harvested volume of 6.2 kg head on gutted. The 2024 generation will be harvested out in Q3 this year. Quarter two was a quarter where the EBIT wise ended at a negative EBIT of 3.2 million euros, improving from negative 8.3 million euros in quarter two 2025. Prices in quarter two 26 was significantly higher than quarter two 25. And as predicted in our Q1 presentation, the cost of our biomass taken out of stock was slightly up in the quarter. This was due to biological challenges experienced in the beginning of the quarter on our spring 2024 generation, resulting in an extraordinary expense of 2.2 million euros. There was a good underlying performance on biology in C. but still see some challenges related to low winter temperatures. The temperatures were lower than normal in the first half of the quarter, but increased to normal levels at the end of the quarter. The biomass in sea was 19% higher at the end of quarter two this year compared to quarter two 2025. Financial performance improved year over year. This was driven by reduced cost base good capacity utilization and the market price in the quarter was stronger than Q2 2025. Our price achievement was 58 euro cents up between years. The price achievement towards market price was good, driven by big fish sold into the North American and Asian market. The share of downgrades in the quarter was 12%. We see that there are still room for biological improvements during winter time where extra winter wound vaccine and larger size of fish going into the first winter in sea are important mitigating measures. And we also have sites that are performing very good through the winter and especially our spring 2025 generation where we saw a mortality ratio of 0.55 throughout quarter two this year we saw a good performance cost-wise in all parts of the value chain with good utilization of capacities strongly affected by our cost saving program that was implemented in quarter 325 and yearly effect of the cost saving program have resulted in reduced cost base of 5.5 million euros for the coming years so far. This is of course an ongoing project also going forward. Smalt production was operating well and we are in line of putting out planned amount of smalt for 2026. I like to mention that none of the fish groups we have in our smolt facilities at the moment have ever detected pox virus. This means that we now have that under good control and this virus has over the last year caused us major challenges in the smolt production. We also got a renewal of our 10 000 ton maximum allowed biomass license in Arnafjordur and that license is then valid for another 16 years. I will then give the word to you Robert.

Thank you Bjørn and good morning everyone. Here you can see the first slides of two providing high level overview of the group's balance sheet which remained broadly stable quarter over quarter. Total assets decreased by 3 million euros and ended around 270 million euros at the end of the quarter. This change sits entirely in current assets. Fair value adjustment during the quarter contributed 1.9 million euros. Total liabilities were broadly unchanged with a small shift from non-current into current liabilities, the equity ratio moved from 44 to 43%. A marginal change and comfortably within our covenant framework. And we expect pressure on covenant compliance to remain limited through 2026. Available liquidity stood at 46 million euros at the end of the quarter. On the next slide, we present the development in net interest-bearing debt during the quarter. And net interest-bearing debt came down by 7 million euros from 131 million down to 124 at the end of June. Leasing was flat quarter to quarter, so the full reduction sits in net debt. So we walk through the net interest-bearing debt starting from left. EBITDA reached roughly 100,000 euros in the second quarter no taxes paid in the quarter the production tax for the first half 2026 forced due in August so you'll see the outflow in the third quarter the largest single driver is Working Capital which released 11.2 million euros during the quarter reflecting the 5,500 tons harvested during the quarter against that net interest paid of 2.3 million leasing and other items of 1 million and capex investment of 1.1 million euros making the total capex investment year to date 1.6 million the capex investments are deliberately low our investment program is rated to the second half of 2026 so you should expect the run rate to step up from here. The total plant capex for 2026 will be limited with only around 4.1 million euros plant investments for the full year which is approximately one third of projected depreciations of the year. With that I conclude the group's financials and I will hand the word back to Jo-Bjørn.

Thank you Robert. So if you take an update on sales and market. There was a negative development in market price from Q1 to Q2 representing 44 Eurocent decrease on ore volume weighted on our own sales. Compared to Q2 25, the price was up with 58 euro cents between years volume weighted for our own sold volume. The price achievement was affected that we had increased share of bigger sizes that mainly go into the North American market where we have a logistic advantage that is reflected in the achieved FOB price in back to Iceland. and also the Asian market where China is dominant and Iceland have a free trade agreement with China that makes us very compatible in that market. The volumes sold to North America increased from 10% in quarter one to 16% in quarter two. This increase was mainly due to higher share of six kilo plus fish available in the harvest volume and we also in the quarter two felt that the US market was a bit slow due to the 15% tariffs that we had at that time. The access to six kilo plus fish also increased the volume to the Asian market and that increased from 14% in Q1 to 19% in Q2. in total into the European market we sold 67 percent of the volume the contracture ended at six percent for the quarter and it gave the contracts gave a positive contribution to our price achievement We also saw an increased volumes on trade sales after entering into a trade sales contract with a third party producer in quarter one this year and see that as a growing part of our activity within our sales department. If we then move to the outlook, as we see it, We keep the guided volume for 2026 to 21,300 tons. We still see the potential for harvesting 26,000 tons on existing licenses and most CAPEX to reach that goal is done and remaining CAPEX needed to reach that goal is put on hold until new framework for the industry is known. We foresee a decrease in cost in Q3 when we start harvesting on our 2025 generation and the cost reduction is driven by better biological performance on the 2025 generation with improved survival and growth ratios and also expected high superior shares on the harvested volume. and the second thing is the earlier mentioned cost saving program that we see a better and better effect of in the P&L as well as generally better capacity utilization due to higher volumes produced in the second half of the year. We expect higher feed prices going forward. but we also expect that this increase will be offset with improvements that we see in the operation this is at least with the feed price increases that we foresee at the moment Biomass in sea was as mentioned 19% higher at the end of quarter 2.26 compared to quarter 2.25, enabling improved MIB utilization in 2026 compared to previous years. This contributes to reducing the fixed cost per kilo produced significantly. The contract share for the year is expected to be 10%. The 4th of July we got a pleasant surprise when the tariffs to the US market was set to 0% This gives us a significant benefit compared to for example Norway and UK into that market and we see an immediate effect of this on our price achievement in that market We are now adapting our production to benefit from a stronger US demand. This means we are adjusting what days we are harvesting and have increased the capacity for flight packing and more deliveries both to North America and also China. For the first time, we are also expecting direct flights from Iceland to China. and this is expected to strengthen our access to the Chinese market going forward. This will happen in October with three weekly flights between China and Iceland. The risk assessment for sailing for the 10,000 ton license application in Isafjordur is now being finalized. constituting the final step towards approval for the license. The license was awarded in 2024, but revoked due to, among other things, missing risk assessment of sailing. At the end, I want to mention the work with the new aquaculture law in Iceland. A new aquaculture law was presented to the parliament Altinge in June, containing many positive elements but was not approved. This has resulted in continued uncertainty on key regulation for both the industry and also for Icelandic Salmon. The lack of clarity on key regulation is unsustainable and is sadly making it irresponsible and impossible for us to comment to further growth and CAPEX at the moment. There is a clear need for change in the regulation and particularly a change in the unfortunate and excessive high industry specific taxes. A predictable, more reasonable and compatible tax regime with the potential for growth and more optimized monitoring from the authorities are key to continue development of fish farming in Iceland. We therefore hope for a resolution soon, putting in place a framework for the industry that will enable continued investments and growth, value creation and creation of local jobs in the communities we are operating. I will then thank you for listening to the presentation. We will now move into the Q&A session. So please raise your hand if you want to ask the the question orally or you can type the questions in the chat of the meeting.

So please feel free for questions. So the first question.

Why do you cut the small release guiding from 5.4 million 25.1 for 2036. And how much do you plan in 2037?

We will plan to increase that in 2037. We haven't communicated any number there, but we expect an increase there and correction in in 2026 is related to adaptions in the small production. But we foresee that we can, within the MIB, it should be possible to reach the production goals going forward with the amount we put out in 2026.

Don't see any further questions. So if you have any further questions after the meeting, please feel free to contact me via email or Björn. We will try to answer further questions.

And then again, thank you for watching our quarter two presentation and wish you all a great day. Thank you. Thank you.