Icelandic Salmon Q3 2024: Building a solid foundation for recovery

Bíldudalur, 18 November 2024

Icelandic Salmon is the parent company of Arnarlax and its subsidiaries, which are involved in salmon farming and processing in Iceland. The companies are collectively referred to as "Icelandic Salmon" or the "Group".

In the third quarter, Icelandic Salmon stabilised conditions following biological challenges from last winter and spring.  Harvest volume remained low, impacting the quarterly results. However, the Group's focus on biomass growth has built a solid  foundation for recovery and future growth.

With new sea lice control measures, increased smolt releases, recent investments in  smolt facilities, and active stakeholder engagement, the Group has taken important steps forward. The Group reiterates its long-term growth ambitions, which are well aligned with authorities, lenders and other key stakeholders.

For the third quarter of 2024, the group reported revenues of EUR 14.3 million, compared to 41.9 million in the third quarter 2023. EBIT for the quarter was negative EUR 3 million, compared with positive EUR 3 million in the prior-year period.

The year-over-year decline was driven by lower volumes and ongoing biological challenges from earlier in the year, which led to a one-off cost of EUR 0.4 million.  The EBIT/kg for the quarter was negative EUR 1.71. Adjusted for the one-off cost, EBIT/kg was negative EUR 1.46.

Operations

In the third quarter 2024, Icelandic Salmon harvested 1,750 tonnes compared to 4,040 tonnes in the same quarter last year. Harvest volumes have increased from the low levels seen in the previous quarter, but remained at a low level as the Group prioritised the build-up of biological assets.

“Consistent efforts by our entire team have driven operational improvements across our value chain, from sea to land. We have focused on growing our biological assets. Strong smolt performance, a reduction in underlying costs in the beginning of Q4, and solid price achievement underscores that we are on the right way,” said Björn Hembre, CEO of Icelandic Salmon.

Strategic events

In October this year, the license awarded in Ísafjarðardjúp was revoked because the Icelandic Food and Veterinary Authority (MAST) had not provided a sufficiently comprehensive, weighted assessment of the potential risk of the spread of fish diseases and parasites before the license was issued. The Group is collaborating closely with the authorities to remediate the situation.

Market update and outlook

Icelandic Salmon continues to see strong demand for its salmon. It achieved high prices for its products across key markets. The Group's superior share was as high as 95% in the quarter. In North America, the Group achieved especially strong results, with prices significantly exceeding market prices.

Icelandic Salmon has a competitive advantage in the North American market, as it can transport its fish by sea. This means lower transport costs and a lower CO2 footprint, which is highly appreciated by key customers. For the third quarter, 25% of sales was to the North American market.

For full year 2024, Icelandic Salmon maintains its volume guidance of 13,000 tonnes.

As previously guided, the biological challenges faced in 2024 are expected to impact the coming quarters and 2025 harvest volumes, with the majority of volume expected in the second half of the year. The full year volume guidance for 2025 is set at 15,000 tonnes.

“For the longer term, we see significant growth potential of up to 26,000 tonnes on our current licenses and are confident in our ability to reach this ambition. This ambition aligns with our stakeholders' vision, and we have a close dialogue with the authorities, lenders and other partners to drive this growth going forward,” added Björn Hembre, CEO.

Presentation details

Attached is the presentation for the third quarter 2024.

The Group's CEO Bjørn Hembre and CFO Jónas Heiðar Birgisson will be presenting the Group's results at 9:00 Icelandic time (10:00 CET). The presentation will be held in English via webcast, please copy and paste the following link into your browser: www.arnarlax.webcast.is.

There will be a Q&A session after the presentations so you can send in questions during the presentation to [email protected]

A recording of the presentation will be made available on the Group's website.

After the presentation there is an opportunity to book a one-on-one meeting either at our office in Kópavogur (Urðarhvarf 14) or on Teams between 10:15 - 15:00 Icelandic time.

If interested, please send an email to [email protected]

For further information, please contact:

CEO Bjørn Hembre
Tel: +354 620 1936
Email: [email protected]

CFO Jónas Heiðar Birgisson
Tel: +354 855 7760
Email: [email protected]

About Icelandic Salmon:

Icelandic Salmon is dual-listed on the stock exchange market, both at the Euronext Growth in Oslo and NASDAQ First North in Reykjavík. The Group is the 100% owner of Arnarlax ehf, the leading farming company in Iceland with head office in Bildudalur. The Group is fully integrated, from egg to the fish is delivered to customers in the market, with control over all parts of the value chain.

See https://www.arnarlax.is for more information about the Group.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

Attachment

• Q3 2024 - Icelandic Salmon Presentation