Good morning, and welcome to this quarterly presentation from Andfjord Salmon. My name is Martin Rasmussen, and I am the Chief Executive Officer of the company. Today's presentation will be given by myself and our Chief Financial Officer, Bjarne Martinsen. We will end this presentation with a Q&A, and you can submit questions through our webcast solution. First, a brief introduction to Andfjord Salmon. The key behind the concept is the location with access for natural seawater, perfect for salmon farming, combined with a non-complex technology. The concept is taking the best from ocean-based net pen farming and combining this with the benefits of being on land. This is giving us tempered, oxygen-rich water from the Gulf Stream, and we avoid salmon lice, algae, and jellyfish, and so on in the closed system with a water inlet at 50 meters water depth.
We have a very large square pool designed to recreate the salmon's natural habitat, the Gulf Stream brought on land. This gives the fish plenty of space to exercise its natural behavior. Over to today's agenda. We will first look at the highlights from the quarter and subsequent events. We will thereafter look into the farming operation. We will give a status on the Kvalnes build-out. Bjarne will go through the financials, and we will end with a summary, outlook, and a Q&A. The key highlights from the second quarter and subsequent period. Strong shareholder and bank support with NOK 385 million in private placement and NOK 200 million in increased bank facilities. We increased the number of smolt on Kvalnes with 550,000 smolt into K3. A couple of weeks after did we reduce the numbers of fish when we sold 450,000 post-smolt to Eidsfjord Sjøfarm.
We have a very strong momentum on construction, and we are gradually increasing our pool capacity with K2 and K4. The most important development, we continue to achieve very strong biological performance. This is the quarter where the financial picture is changing. After several quarters with essentially no sales, we recorded NOK 51.3 million in revenue from sales in the second quarter. Our first quarter since 2023 with revenue driven by the post-smolt sale in June. For context, revenue was effectively zero from third quarter in 2025 through first quarter of 2026. This is a step change rather than an incremental improvement. Let us look at our fish farming operations and the biomass. Total standing biomass now is today 1,969 tons. In the second quarter, we achieved biomass growth of 559 tons while also selling 562 tons of post-smolt.
So far in the third quarter, biomass has. In other words, biomass development has been very strong, particularly considering that production has been based primarily on just two pools until the end of the second quarter. This provides a solid foundation for further scaling of the operation. This slide brings together the two metrics that best describe the biological performance across the whole farm, survival ratio and feed conversion rate. Average accumulated survival is 98.04% as of 2026 August. The gradual decline reflects the higher mortality we saw immediately after the K3 smolt released in June. Underlying survival has since returned to robust levels. The two charts below show the same metrics for the post-smolt we sold in June. Survival of 99.1% up to the sale on 20 June, and an FCR at comparable level. In short, efficient feed usage and high survival across all generations.
K0 is our first generation, and it is now closing in on harvest. Around 350,000 smolt at an average weight of about 180 grams were released on September 30, 2025, 11 months ago. Biomass has grown steadily throughout the cycle from 64 tons in the third quarter in 2025 to 1,001 tons as of 2026 August . Average weight has followed the same curve from 180 grams at release to 2,900 grams today, an increase of more than 600 grams since the end of second quarter. We were not fully achieving the growth potential at the end of May and during June. However, following some adjustment to water capacity and operation routines, we were able to achieve the growth potential again in the third quarter. Two figures to note. The feed conversion ratio stands at 1.09 and the survival at 98.62% across the entire production cycle.
Those are strong numbers for our first generation, and they confirm that the operating model works. The pool enhancements that were made early summer and during the summer has delivered better water quality and better fish welfare, and we see that reflect in both the growth and the survival. In short, K0 is delivering on plan, and we are approaching first harvest. Moving to K1, our second generation and the one that gave us our first commercial milestone since 2023. Roughly 750,000 smolt at an average weight of around 160 grams were released between November 10th and 12th, 2025, nine and a half months ago. The headline here is the inaugural post-smolt sale at the end of June. About 450,000 smolt at an average weight of 1.2 kilo. This is the first time we have converted biomass into revenue since 2023, and it validates the post-smolt model.
This also explained the dip you see in the biomass chart in the second quarter from 612 tons down to 381 tons. The remaining batch of around 290,000 fish is being kept for growth out, and the biomass has already rebuilt to 719 tons by 26 August . Growth was already strong and with the biomass reduction in June, gave the remaining fish more room, which has accelerated it further. Average weight has gone from 1,325 grams at the end of second quarter to 2,510 grams in August. So close to a doubling in two months. On the key metrics, feed conversion ratio of 0.98 and survival rate of 97.84%. Both are in line with K0, which tell us performance is repeatable, not a one-off. In short, K1 has proven the post-smolt sales channel and is growing well on the remaining volume.
K3 is our third pool and is now in production. Approximately 550,000 smolt were released in early June at an average weight of around 110 grams three months ago. Testing and training in the pool since it was filled with water over Easter paid off at Kvalnes with a smooth stocking process. Growth since release has been good, where average weight is up from 110 grams at the start of June to 460 grams by 26 August , and standing biomass has grown from 60 to 248 tons over the same period. Mortality was slightly higher immediately after release, and the survival stands at 96.9%. The mortality is caused by small share of the smolt batch having lower quality. Like the other pools, it has an efficient and low feed conversion ratio, which is 0.85. The entire batch is earmarked for post-smolt production planned for sale in October.
This is an illustration of how our Kvalnes facility will look in the future, and each phase is shown with different colors. There we can see a photo of the construction site. K1 and K3 are in operation combined with K0. K2 is currently being filled with water and tested. K4 is near completion with commissioning and testing not long after K2. The water inlet for K5 has been completed, and we are now preparing to cast a concrete floor, both for K5 and K7. We are now preparing for K1, K2, K3, and K4 to be in production during 2026 with around 3 million smolt for stocking. I will now leave the word to Bjarne, who will cover the finance.
Thank you, Martin. I will, as usual, present an overview of the financial reporting. We have also released an interim financial report earlier today that is available on our website in addition to this presentation. We currently have three pools operational, and shortly we can add two additional pools, concluding phase one of the build-out and reaching a production capacity of 11,000 tons of annual production of HOG and post-smolt. The construction of the pools in phase II-A is ongoing, and this phase will be complete during 2027, increasing the annual production capacity to 17,000 tons of HOG and post-smolt. The CapEx related to phase one and 2A is financed, and at the end of second quarter, bank loan of NOK 600 million was still undrawn.
With the infrastructure at Kvalnes in place, we are able to utilize this by adding new pools and increasing production volumes quite fast from now on. Finally, we can report sales income again. A big milestone achieved in June with our first sale of post-smolt. The effect of this sale is of course visible in the accounts with significant improved operating results compared to previous quarters. The next step will be to reach satisfying harvest weights for human-grade salmon during the autumn. With increased sales volumes from both post-smolt and human grade, we will begin to see significant results from fourth quarter and onwards. The balance sheet also reflects that we have operations again, showing increased value of the standing biomass in addition to the biomass that we sold in the second quarter.
Also note that the trade receivables at the end of the quarter related to the sale carried out in June. Cash and cash equivalents does not reflect the available overdraft facility. At the end of the quarter, undrawn credit facility amounted to NOK 80 million, and this is of course in addition to the undrawn construction loan of NOK 600 million. As biomass and trade receivables increase in value as a result of the production ramp-up, the revolving credit facility will form part of the ongoing financing of working capital. At the end of second quarter, NOK 80 million was undrawn under the credit facility. Following the quarter end, the facility limit was increased to NOK 200 million, and this will continue to be expanded further in line with increasing production capacity and the corresponding growth in inventory and trade receivables.
The remaining construction loan of NOK 600 million is also available for the company, and this was still undrawn at the end of second quarter. Also note that trade receivables and VAT receivables will also contribute to incoming cash flow. Equity increased as a result of the share issue completed during second quarter. Apart from this, there have been no material changes on the liability side of the balance sheet during the second quarter. Borrowings includes bank loan of NOK 900 million and bond loan of NOK 750 million , both valued at amortized cost in the accounts. The cash flow statement reflects the buildup of biomass and results in outgoing cash flow from operating activities of NOK 72 million during the second quarter. Overall change in cash and cash equivalents was quite neutral during the quarter, with ingoing cash flow from the financing activities contributing.
With that, I leave the word back to Martin for summary and outlook.
Thank you, Bjarne. To wrap up, these are the key highlights from the second quarter and the subsequent period. Biology first. High survival rate, healthy growth, and strong feed conversion ratio across all pools, which together have driven solid biomass development through Q2 and into the third quarter. On financing, we have strong shareholder and bank support. A private placement of NOK 385 million and a signed term sheet of NOK 200 million increase in bank facility. Capacity is increasing step by step. 550,000 smolt were released in K3 in June. K2 was completed as planned and is now filled with water and ongoing testing. K4 is near completion. A long-term strategic partnership has been entered into with Eidsfjord Sjøfarm. It was announced in April, and we delivered on it in mid-June with 450,000 post-smolt sold. That is what took us back to revenue generation this quarter.
Looking ahead, the first harvest of grow-out salmon is scheduled this autumn and K3 post-smolt for delivery in October. We will now show you a video from Andøya before we are moving into the Q&A. Are we ready for the Q&A? You can send the questions through our webcast solution, and we will read it up and answer them here today. Have you received any questions, Bjarne, so far?
We have received some questions. First question: Can you elaborate a bit about what looks like an extremely strong growth rate in pool K1, where the fish has nearly doubled in size since the end of June from 1,325 to 2,510 grams? What has enabled this?
Yeah, I would say that we have good growth in all our pools, but particularly in K1. In K1 we have, from the start, had a very good smolt quality. The fish has consistently performed very well. Also, the difference between K0 and K1 is that the K1 is the new generations of the pool, where we also have optimized the water quality, the water flow, the feeding system, the light regimes. There's a lot of details in K1 compared to K0 that is also increasing the productivity. But in general also, especially from the end of June, we have had increased temperatures. We have had light all day around, so there's also the impact from the nature side that it's giving us better conditions for the growth. Yeah.
Okay. Next question. Fiskenes and Breivik regulatory work moving forwards.
Yeah. Okay, if you divide it into two, we have Breivik first. It is our location that is closest to Kvalnes, and we are completed with the zoning plan, so we can apply for new license in Breivik. We are preparing for this. It requires some documentation of the environmentally and the conditions, and we have had several studies the last year. Assume that in 2027 we will apply for license on both of the locations. But we consider Fiskenes as the best location to start. The status of Fiskenes is that we have been in an ongoing zoning process for some years now.
The reason why we haven't completed the zoning process is because there's a requirement that we need to have a further documentation of the impact of the bird life and the coexistence with the airport, since Fiskenes is very close to the airport. We have completed these measurements and studies, and we are very satisfied with the result, which is clearly in our favor. We have initiated the process towards municipality this autumn. If we will manage to get to complete the zoning plan this year or early next year, that of course depend on others than Andfjord Salmon, but we are in process. Immediately after we have completed the zoning process, we will initiate, and we are also preparing for the application process on Fiskenes.
Yes. Have you noticed an increased expenditure on fish pellets, considering El Niño and general market conditions? What we can say, of course, we see the same as the industry elsewhere. There is an expectation about some increase in feed prices, and that will hit Andfjord in the same way as all the other producers. That is a common view in the industry at the moment.
What was also happened is that we have, and the industry also have, implemented alternative raw material ingredients, which also have reduced the impact, and especially the potential impact of the El Niño event which is occurring now. But we are also optimistic about the salmon prices in the fourth quarter.
New question. Have you any plans regarding being noticed on main list on Oslo Stock Exchange? At the moment, we see it as appropriate for the shareholders and for the company to be on Euronext Growth. At the moment, there are no plans for being on the main list.
In the short term.
In the short term, yeah. Has the entrepreneur started the work on K5 and K7?
Yes. As we said in the presentation, the inlet wall for K5 is completed. We have started and done a lot of work now in the last couple of months to preparing the K5 and K0, and we are now in preparing for the castling of the walls, as we also mentioned in the presentation.
Yes. What is the expected smolt release for 2026?
Yeah. I think we are just repeating what we have communicated in earlier occasions. We are targeting to be around 3 million smolt releases in 2026. Yeah.
Did you experience loss of fish during the transportation of post-smolt to Eidsfjord Sjøfarm?
If you summarized, if you took the entire process from the transfer of the fish from Andfjord Salmon to the Eidsfjord Sjøfarm, after now a couple of months, this has been a success for both companies. This is the first time we are transferring the fish from the pool. We did it divided into four process, four days and deliveries. The first day, of course, we had higher mortalities on that day compared to the next day because this is typical learning process. You are going from theory to practicalities. But some mortalities related to the transfer, but I would say that we are very satisfied also with the performance of the fish after it was transferred to Eidsfjord Sjøfarm. This has been a good story and a good operational experience for both of us.
Yes. What is the expected CapEx for Q3 and Q4 as things look today? The remaining CapEx will be spread on the quarter lying ahead. There is now full activity for the concrete work on the pools in phase II-A, both K5, K7, and after that K6 and K8, and also technical installation and electrical installation will be ongoing in parallel. There will be a stable CapEx with this work. Earlier we had a lot of more work streams with waterways, and with infrastructure on the site. Now the work is mainly focusing on the concrete and the technical installations. You can expect a stable CapEx the next quarters when we are to complete phase II-A. Which month do you plan to harvest K0 and what is the target harvest weight in HOG?
Yeah. We are now planning to target the harvest in K0, let's say optimistic in the end of third quarter. But also depending on the price and development of the growth, we can move it into the fourth quarter in October. The timing is of course depending on the size of the fish and what is the situation in the market when it comes to the prices. The concept with having, for example, now we have over 1,000 tons of biomass in K0. The concept is take part of the biomass out, with a lower slaughter weight, let us say around 4 kilos in live weight and thereafter grow the rest. Because that is the way we can really utilize the pool capacity. The average weights in HOG will be above 4 kilos in total for the entire pool. That is the way we best can maximize the profits on each pool and productivity then. Of course, fourth quarter it will be in high volume in slaughter from both K0 and also K1. Yeah.
Yeah. Also this post-smolt delivery will also be fourth quarter.
Yeah. In the beginning of October is planned for. That is also depending on to optimize the timing.
Can you please provide a harvest and post-smolt sale guidance per quarter for the third quarter and fourth quarter? I think you were touching on that now. It depends on which year the harvest in K1 will hit. K1 is expected to be completed during the fourth quarter. We will also start to harvest in K1 in fourth quarter. What remains to be seen is whether the harvest in K1 will be completed this year or next year or which part of the harvest will be next year. What was the gross profit per kilo contribution from post-smolt in second quarter? I think we have had one sale in the second quarter. It is quite visible in the accounts. It is not appropriate for us to go into the details about that, because that would be very sensitive information for us and for the buyer.
What we can say is we are satisfied that the post-smolt production and the sale of post-smolt is profitable for Andfjord Salmon, and it is also important for us that it is profitable for the buyer. This is a concept that should be beneficial for both parties. How we see it is profitable for both parties.
Of course, if you look at the cost we achieved on that batch, and also the pricing model seems also to be in a very good spot on both behalf of the salmon farmer and in the sea and Andfjord Salmon. This is a very attractive model, of course, and we have proven it with the post-smolt sale.
Yeah. Another question about the harvest. I think we have answered that. Will all the fish in K0 and K1 be harvested in Q3 and Q4, or should we expect that some volumes will be harvested in the beginning of next year? The completion of the harvest of K1, I think, can be expected to be done in first quarter, and let's see how much is in this year and next year.
Yeah. We are looking in from three to four batches from each of the pools to be harvested out to maximize the profitability, as I said earlier.
What are your expectation for harvest weights of the fish harvested in 2026? I think maybe you answered that also.
Yeah.
When do you expect pool K6 and K8 to be in operation?
Yeah. We are now in the starting phase also for K6 and K8. We are planning to have K5, K7, K 6, and K8 completed in 2027. But K6 and K8 in the autumn, and K5 and K7 in the spring.
Seeing the increased growth in K1 with more space, does this change your view on maximum pool density?
I think this actually proved and really demonstrates our point of view of how we can maximize and utilize the pool capacity because we have a system for either post-smolt or for splitting the fish, take down the density, and have conservative numbers on the density. You can have a higher density, and consider that if you increase in the density, you will also take down your productivity. The productivity we achieve with the low density compensates actually for the need to use higher density. To be in what we call a sweet spot from 40 to 50 kilos, this is where we see we can When we are peaking on these densities, this is where we are maximizing the performance for the biology. It is very encouraging to see this growth in real life based on what we experienced so far in the pools.
Yes. Is the initial mortality in K3 also related to the low weight of the smolt that was released?
As I said in presentation, we have a small part of the delivery in K3 that we call the loser fish. They are not perfectly suited for the seawater transmission. The smolt supplier has done a very good job. Before the fish is leaving the smolt supplier, everything is looking fine, but after some days in sea, then you really get the results. So there is small and weak fish that, of course, is impacting the numbers in K3.
Yeah. Another question about the smolt in 2026. We answered that. We will release around 3 million smolt-
Yeah
In 2026 in total.
Yeah.
A question about the sludge. How much of the sludge have you been able to collect so far in pool K0 and K1?
We haven't been specific on the exact numbers, but we are in line with our expectations. If you summarized 2025, we was in line with the license permits, and also we expect to be there in 2026. Also there, very encouraging to see that the concept with sedimentation of particles and organic waste in the pool going to the floor, and you can then collect it with cleaning ROVs in a much more concentrated mass compared to have it in the entire water flow. That allow us to have a very efficient cleaning and sludge collection in the pools. So what we have seen so far is very good numbers also from the sludge collection.
When you start sale of the salmon, which market are you targeting?
Yeah. We are working with different markets. It's both European and also looking into the Asian markets. So we are now creating the fundament for the sales platform, which we can then grow and expand as we are increasing the biomass. Yeah.
Yeah. One last question. Have you completed employment of operators?
I say that we define completed. We are in a growth phase, and we will recruit operators over many years. For us, this is a phase divided into stages. We need operators this autumn. We need it in the spring and next year in correlation with our growth. So far, very satisfied with the employees that we have recruited. We are extremely humbled to be in area where we have such a good access for employees. That is the most important success factor for the company, is to get the best people in the best position.
Yes. I think that sums up. We have answered the questions, then it is time to-
Time to say goodbye.
Yeah.
Yeah. Okay, in case we have not answered all the questions that you have, you can take directly contact to us in the management. Our contact information is on our webpage. I would like to thank you all for your attention, and thank you for watching today.
Thank you.