Good morning, everyone. I am Vidar Aspehaug, CEO of Kaldvík, and I am pleased to welcome you to this presentation of our third quarter results for 2026 here from our feeding station in Djúpivogur in the Eastfjords of Iceland. This is where we are controlling the feeding of all of our sites, ensuring that we can feed for as many days as possible during the year, even in bad weather. This is also where our competency in feeding is gathered and learning from each other, ensuring that we are controlling it the best way we can. Joining me today is our CFO, Þórunn Ragnarsdóttir, and together we will walk you through the key highlights and developments from the past quarter.
After the presentation, we will open the floor for questions, and we are providing an email address, qa@kaldvik.is, but since we are having worldwide challenges with Outlook and Teams today, we may need to answer questions on the email by email later. We will provide a phone number as backup, so you can provide questions by SMS in case the email does not work, and we will provide that phone number also towards the end of the presentation. Before we continue, you all know the disclaimer, so let us move on. We will start off with the key highlights from this quarter. In the third quarter, we harvested 4,483 tons with a superior share of 75.8%, which is up from the 65% we had in Q3 last year. Group operational EBIT in Q3 was EUR -3.8 million, with an operational EBIT per kilo of EUR -0.85.
In Q3, we finally received the operational licenses of 10,000 tons MAB in Seyðisfjörður, which takes our total licenses to 53,800 tons. As previously announced to the market, we had an incident with jellyfish in September, causing an additional mortality in the 25 generation of 11.5 percentage points at our sites in Reyðarfjörður. The situation were normalized by early October. As a result of that incident, we have written down the biomass by EUR 11.5 million in Q3. In the two figures to the right here, it has been excluded from the operational EBIT to give a clearer picture of how the business performed in the quarter. Let us look at what happened. On the 4th of September, we started seeing elevated mortality and reduced appetite at our sites in Reyðarfjörður, and this coincided with an increasing number of lion's mane jellyfish in the fjord and at the site.
We implemented necessary measures, including accelerated harvest for the fish at risk, reduced feeding, and we were closely monitoring the fish health. We informed the market on the 6th of September when additional mortality was at about 0.3 percentage points, and we gave an update on the 15th of September when it had reached about 6.5 percentage points, and the impact seemed to be declining. By the 7th of October, the situation had stabilized with low mortality and a much lower number of jellyfish present at site. In total, the event ended by adding 11.5 percentage points of mortality in the 25 generation. This was a severe but time-limited event affecting the 25 generation, while the 26 generation was not affected.
The accelerated harvest has resulted in a lower average weight in harvest this quarter, affecting the price achievement, as will be commented later in this presentation. The lower biomass in the 2025 generation will mainly affect the harvest volumes in 2027. Jellyfish is not a new challenge in Icelandic waters, especially here on the east coast. Managing this risk has been part of our operational strategy for several years. We have previously implemented measures, including strategic washing of our nets to reduce exposure and to maintain good water exchange. However, the unusually high lion's mane jellyfish concentration experienced in September this year demonstrated that our existing measures were not sufficient under these extreme conditions. Our response this year focused on protecting fish welfare and reducing the biomass at risk. We accelerated harvesting, reduced feeding, and we were closely monitoring the fish health.
Looking ahead, we are now planning to strengthen our strategy in relation to lion's mane jellyfish in two main areas. First, earlier warning. By combining information on lion's mane jellyfish occurrence, migration patterns, and ocean currents, we are aiming to improve our ability to anticipate events and respond before fish are exposed. Second, exposure protection. We are evaluating physical barriers, electric fences, and additional support to ensure that our fish is protected towards the lion's mane jellyfish exposure and simultaneously maintaining a good environment for our cages during high-risk periods. These technologies are still being assessed, and we need to establish their effectiveness under our operating conditions. We have allocated approximately EUR 4 million in planned CapEx during 2027 and 2028 for these measures. Our objective is to finalize the site-specific solutions by February 2027, complete procurement and installation during the spring, and have the selected measures operational by June next year.
The key message here is that we are building on our existing experience, strengthening our preparedness, and taking concrete steps to reduce the biological and financial consequences of future lion's mane jellyfish events. Still, even after this severe event, the 2025 generation is performing better than the 2024 generation. Cumulative mortality by end of quarter in the 2025 generation is 24.2% against 35.6% in the 2024 generation. The superior share at harvest so far is 73.6% compared to 65.1% in the 2024 generation. After the lion's mane jellyfish event, mortality and appetite in the 2025 generation is now back to normal. We have received the operational licenses in Seyðisfjörður, as mentioned, 6,500 tons of fertile and 3,500 tons of sterile. That takes our total licenses from 43,800 tons to 53,800 tons MAB.
On smolt release for the 2026 generation, we had already delayed the output due to regulatory constraints, as communicated in the Q2 report. The lion's mane jellyfish event delayed it a bit further. The transfer was completed by 6th of November, with the last group going to sea at about 6.5 degrees Celsius in the sea. Transfer mortality at the end of this quarter was 11.42% against our target of 4%. We did succeed in avoiding the transfers in the Parvicapsula high-risk period from August to early September. Over the past few years, Kaldvík has experienced several biological challenges that have affected both our production volumes and our profitability. The various challenges have all different underlying causes and therefore different responses.
However, several of the solutions are closely linked to our new production model resulting from our strategic review and based on reducing risk through strategic outputs, avoiding high-risk periods, stronger smolt, and reduced production time at sea, aiming to reduce the number of groups with more than one winter at sea. An important milestone for Kaldvík was reaching our goals. In reaching our goals, have been reached previously in the 2025 generation when we demonstrated a freshwater production capacity of 7.5 to 8 million smolts annually. Our focus going forward now will be building on this achievement, now focusing on improving the robustness of our smolt. Historically, we've had too high mortality after transfer of our smolt, with average losses of approximately 12% during the first 60 days at sea. This is clearly too high, and improving survival during this critical period is one of our highest priorities.
We have identified several contributing factors, including smolt quality affected by the water chemistry in land, smoltification, and stress during transport and handling. We are now addressing these factors through improvements in the freshwater production, operational practices, and well-boat logistics. Our target is to reduce mortality during the first 60 days to approximately 5% from the 2027 generation. The second challenge has been winter wounds. Our 2024 generation was particularly affected, contributing to a harvest volume approximately 5,500 tons below expectations and severe downgrades in harvest. The extremely low sea temperatures was an important driver in this, but we do believe that higher quality smolt with improved vaccination status will handle such temperatures much better than the 2024 generation did.
Further, by adjusting transfer and harvesting schedules and reducing number of groups with two winters at sea, we aim to reduce exposure to the conditions that contribute to winter wounds. Third, the Parvicapsula. This parasite has affected survival, growth, and quality, particularly in fish transferred during August and early September. We identified this as a critical risk period and are adjusting our production schedules to avoid seawater transfers during these weeks. Combined with improved smolt quality and our one-winter strategy, this should reduce the impact of the parasite as well as reducing the risk of secondary challenges, including winter wounds. Finally, the jellyfish event. As discussed earlier, the September event increased mortality in our 2025 generation by approximately 11.5 percentage points. Fortunately, mortality and appetite had normalized by early October.
I have already presented how we're going to now strengthen our existing mitigation strategy with approximately EUR 4 million in planned investments during 2027 and 2028. To summarize, we have demonstrated the smolt production capacity needed to support our future ambitions. Our focus now is on converting that capacity into a stronger biological performance through improved smolt quality, better timing, reduced mortality, and a shorter seawater production cycle. This will be fundamental to achieving a more predictable production, improving fish welfare, and stronger financial performance. Some information on harvesting and sales. We harvested 4,483 tons in Q3, almost three times as much as a year ago, and above our guidance of about 3,500 tons. The increased harvest was due to the jellyfish event. The superior share was 75.8% compared to 65% last year, and price achievement was EUR 5.75 per kilo against EUR 6.27 a year ago.
Because of the jellyfish event, we harvested fish earlier than planned to reduce the biomass at risk, and this meant a larger share of the fish was small fish that pulled the average price down. Looking ahead, the contract share in Q4 is 38%. That concludes the operational update, and now I'll pass the word on to Þórunn, who will walk you through the financial updates.
Thank you, Vidar. We begin with the highlights from the third quarter, and here you can also see the year-to-date comparison figures. Operational EBIT in Q3 was EUR -3.8 million, and operational EBIT per kilo was EUR -0.85. This is driven by different factors, mainly a lower achieved price due to a larger share of smaller fish. It is still an improvement from the same quarter last year, as we had more harvesting volume now. Operating income reached approximately EUR 26.1 million against EUR 9.9 million a year ago, on a harvest of 4,483 tons against 1,545. The biomass write-down of EUR 11.5 million related to the jellyfish event is shown in a separate line outside the operational EBIT. Production tax was EUR 1.4 million in the quarter against EUR 0.5 million in Q3 last year. Now over to the balance sheet items.
Total assets were EUR 482 million at the end of the quarter. The equity ratio was 46%, down from 51% at the end of June, and this is mainly because of the biomass write-down and the result for the quarter. On the liability side, you can see a shift from non-current to current liabilities. This is a matter of timing, as the waiver for the covenant breach was signed on 1st of October, one day after the quarter end, so the bank debt is classified as current at the end of September. Net interest-bearing debt rose by EUR 18.1 million in the quarter. EBITDA was EUR -12.1 million, but this includes a non-cash biomass write-down of EUR 11.5 million. The main driver of the increase was continued buildup of biomass of around EUR 14 million, partially offset by other working capital of EUR 3.6 million.
Since the write-down also lowers the biomass value, working capital shows a net reduction of EUR 1.3 million on the slide. Financial items were EUR 5 million, production tax EUR 1.4 million, and CapEx EUR 0.9 million. After the jellyfish event, we agreed a waiver with our bank syndicate on 1st of October, and on 29th of October, we signed an amendment agreement. The new financing package has three parts. First, the bank syndicate, where total commitments increase from EUR 207 million to EUR 232 million. The term loan goes from EUR 117 million to EUR 102 million after repayment of EUR 15 million, and the revolving credit facility increases from EUR 90 million to EUR 130 million. All facilities now run until 30th of June 2030, and term loan repayments start in March 2029.
We also have EUR 15 million of extra availability on the RCF until October 2028, and the agreement gives us capacity of up to EUR 30 million for finance lease of equipment. Secondly, our largest shareholder, Austur, supported by its owners, provides a guarantee of up to EUR 25 million for drawings on the RCF above the borrowing base during the waiver period, which is running until December 17. Thirdly, an equity raise of about EUR 105 million is planned in the fourth quarter. The new financing package becomes effective when the equity raise is completed, and the new covenants will follow our business plan and adapt as production grows. Now I will hand it back to Vidar.
Thank you, Þórunn. For Q4 2026, we expect to harvest approximately 4,200 tons. We are maintaining our full-year guidance for 2026 of approximately 17,000 tons. For 2027, we give guidance for the first time at about 18,000 tons. The initial target that we indicated in the Q2 presentation was to reach above 20,000 tons in 2027, and the reduction now to 18,000 tons is due to the lion's mane jellyfish event that lowered the biomass in generation 2025 that we will harvest next year. Looking ahead, this slide illustrates how we expect production to develop over the coming years. In 2026, it will be about stabilization. We have implemented a revised production model focusing on improving the smolt quality, better timing, reduced mortality, and a shorter seawater production cycle. This will be fundamental to achieving a more predictable production, improving fish welfare, and stronger financial performance.
Importantly, despite the lion's mane jellyfish event, the 2025 generation is still performing better than the 2024 generation, and we have maintained our harvest guidance of approximately 17,000 tons for 2026. We have made progress in implementing the new model with 63% of the 2026 generation transferred to sea before August. 2027 will be a transition year. We expect harvest volumes of approximately 18,000 tons, reflecting the lower remaining biomass from the 2025 generation. At the same time, the 2026 generation will be growing at sea, preparing the foundation for increased harvest volumes the following year. In 2028, we target approximately 30,000 tons. This increase is primarily driven by the 2026 generation, with larger smolt volumes and improved biological performance expected from our revised production model. Looking further ahead, our license base of 53,800 tons provides the foundation for a long-term harvest potential of approximately 45,000 tons.
Realizing this potential will require continued biological improvements, additional harvest infrastructure, and access to external smolt supply. The important distinction is that 2028 represents our revised production target, while 45,000 tons is our long-term potential, not current production guidance. Our immediate priority is to deliver on the revised production model and to demonstrate consistent biological performance. That is what will enable us to convert our established production capacity into higher harvest volumes and improved profitability. To summarize, we harvested 4,483 tons in the third quarter, with a superior share of 75.8%. The lion's mane jellyfish event in Reyðarfjörður led to additional mortality in the 2025 generation, but the situation has normalized. Operational EBIT was by EUR -3.8 million, an improvement from EUR -5 million a year ago, with an operating income of EUR 26.1 million.
We have written down the biomass by EUR 11.5 million because of the jellyfish event. We have agreed a new financing package with our bank syndicate and our largest shareholder, which together with the planned equity raise, gives us a solid basis going forward. Finally, we maintain our 2026 harvest guidance of about 17,000 tons, and we expect about 18,000 tons in 2027. We will conclude our presentation here. Our next company update is the Q4 report scheduled for February 25, 2027. We are now going to do our best to open for questions. You can either use our email address qa@kaldvik.is, but as mentioned, because of challenges worldwide with Outlook and Teams, we are not certain that we will be able to receive those emails today. So an alternative is to send questions by the phone number shown on screen. Thank you.
We have received a few questions. The first question is, how confident are you that you will reach 30,000 tons in 2028?
Of course, we are confident that 30,000 tons is an achievable target, and now based on the production capacity we have established and the changes that we are implementing with the new production model. That said, salmon farming always involves biological uncertainties, and we need to demonstrate that we can have consistent results, both regards to survival and growth. Our focus will be to execute on the revised production model and to try to deliver the biological performance that we need to reach that target.
How much fish did you lose to jellyfish, and do you expect more write-downs of biomass in Q4?
We lost 1,400 tons due to the lion's mane jellyfish event. We have already made the write-down as the event happened in September, and we are not expecting any further write-downs due to this event.
What is the expected superior share of the 25 generation for the coming quarters and the cost level of the fish?
The assumption in our models is that we will have a 75% superior share in the 25 generation. Regarding-
Yeah, for the cost level, now that we have written down part of the biomass, we are of course reducing the future costs, so we expect the cost per kilo to go down on the 25 generation. Then, let me see. Could you need additional equity again in 2027? I will take this one.
Okay.
The goal of the planned financing is, of course, to establish robust financing and capital structure to support the company throughout the buildup to 30,000 tons. Based on our business plan and our assumption, we believe that the proposed financing package provides this appropriate funding framework. Of course, aquaculture will always carry biological risk, and no company can eliminate that completely. We have no more questions on the phone.
Okay. If you have sent questions by email, we will ensure to respond to those as soon as we receive them. We are not receiving any emails at the moment. Yes, then I guess unless we are receiving anything now, that will conclude the Q&A. Thank you very much.
Thank you.
See you in next quarterly report.