Good morning, thank you for joining the fourth quarter presentation of Proximar Seafood today. Together with me, here from our office in Yokohama, I have our new CFO, Tetsuya Kobayashi, who joined us from the first of December. We will first go through the highlights for the fourth quarter and market update before we spend some time on the operational development and outlook. We will also have a Q&A session after concluding our presentation. Looking back at the fourth quarter, we continued our weekly harvest. Through the quarter, we harvested 339 tons HOG. The harvest volume was affected by decision to push harvest from the fourth quarter into 2026, following lower growth rates due to various issues we had earlier in 2025.
These issues also explain the low average weight of only 2.1 kg HOG, which in turn also impacted the price achievement on the average. It's, however, encouraging to see that the price achievement for the market size fish, meaning above three kg HOG, achieving NOK 112 per kilogram. This compares to the average export price from Norway of 85 NOK per kilogram and demonstrates the continuous strong cost advantage of Proximar. Since we had a lot of small fish being harvested and sold, this dragged down the average price achievement to NOK 65 per kilogram. We continue to see positive development in the operations following a broad range of initiatives to improve farming and operational conditions in the third quarter, in turn, also showing positive biological performance.
On the financing side, we completed the NOK 150 million price offering and voluntary conversion of NOK 198 million of the outstanding convertible bond to equity. In December, the JA Mitsui Leasing loan was refinanced, and it was also increased by additional NOK 50 million. We also strengthened our finance team with our new CFO here in Japan. Kobayashi-san has great experience from banking and finance in Japan and Asia, which is very relevant for us going forward, and we're very pleased to have him on board. This is the last part of the transition of all our staffing from Norway to Japan. I'm pleased to see the positive effects already by having strengthened our finance team here locally, also considering the financing and refinancing work to be done in 2026.
The survival rate in the grow-out for the quarter was 99.7%, and we reached our standing biomass target by the end of the year. Fish health continues to be good, which is also reflected in the high superior graded fish, which was above 98% for the quarter. With a standing biomass and number of batches in production, we are well positioned for 2026. I will now give the word over to Kobayashi-san to go through the summary of the financial figures for the fourth quarter.
Thank you, Joachim-san. On the P&L sheet, we had approximately NOK 21 million in sales and NOK 30 million from insurance payouts, yielding NOK 34.3 million in revenue in the fourth quarter, compared to NOK 3.4 million in the fourth quarter, 2024. We reported EBITDA of +NOK 2.4 million. Adjusting for insurance, fair value, and write-off, the adjusted EBITDA was -NOK 17.2 million. The write-down is related to batch eleven, which showed lower growth than anticipated. Harvest from this combined batch in January 2026 showed that a portion of the fish had not grown as anticipated, resulting in a wide size distribution and lower average weight. Harvest of this batch has therefore been brought forward to free up capacity and allow the company to focus on later batches, which show markedly better biological performance.
The effect attributable to reduced growth has been reflected as an event-driven loss and consequently resulting in the write-down. The net financial result was minus NOK 23.6 million, resulting in a total loss of NOK 39.9 million before tax for the fourth quarter 2025. Due to lower-than-expected growth, lower harvest weights, and consequently lower prices, the revenue side disappointed and led to the losses we see. Move on the next page. On the balance sheet, total assets were approximately NOK 1.5 billion, with equity around NOK 429 million. The refinancing measures included NOK 200 million convertible bond conversion and NOK 150 million rights issue. Extended maturities and interest reduction, improving the equity ratio from 24.2% - 28.6%.
We also refinanced that JA Mitsui Leasing loan in December. In conjunction, this increased the loan amount by additional NOK 50 million, with a new maturity in December this year. Looking at the current liabilities, NOK 705 million of total NOK 803 million is interest-bearing liabilities, meaning the syndicated bank loan and JA Mitsui Leasing loan both maturing this year. We are now starting discussions to secure refinancing of these loans, also targeting to simplify our capital structure further. Back to you, Joachim-san.
Thank you, Kobayashi-san. Moving on to the market development. The consumption of Atlantic salmon in Japan has recovered from the dip in 2023, and the demand for Fuji Atlantic Salmon remains high. We also expect the consumption to continue growing, as Atlantic salmon is continuing to gain popularity amongst the younger generations here in the market. The global prices finally showed a recovery from third quarter levels, and the implied transportation cost remained stable. This translated to attractive price achievement for our market size fish, which means fish above three kg HOG. For this group, the average price was NOK 112 per kilogram, which is net price to Proximar in the fourth quarter, showing the competitive advantage of Proximar compared to the imported fish. The interest for Fuji Atlantic Salmon remains high, and we also see more stable prices and less sensitivity to market fluctuations.
Our challenge has been to supply steady volumes of market-size fish, and this has also, to a certain extent, impacted the price achievement for the three-kilogram fish and above. I believe this slide is an important one to highlight. This clearly shows one of the most important factors in our business model, but also shows how close we are to achieve good returns and expected profitability. As we now start to look forward and becoming a more stable supplier of fish above three kg, we are well positioned to achieve attractive prices and continue to target a price premium on top of the benchmark. This graphs shows the price achievement for 2025 for all our sales and comparing to Oslo export price.
The red column shows our price achievement for the fish above three kg. As you see, the average is approximately 36% above the export price from Oslo. We're therefore very encouraged to see our price expectations have materialized, giving us a solid cost advantage as we're now moving forward. We expect this to translate into good profitability as our harvest weighs past the three-kilogram threshold. As we become a more stable supplier, we expect this will, in turn, further positively impact price achievement. Moving on to an update on our operations and the development here. We're pleased to see the facility continues to show stable performance. The measures taken last year have shown consistent and positive effects. This makes us very encouraged as we enter 2026 with better biological control and growth conditions overall.
We're now at our standing biomass target, around 2,000 tons. As you see, we really made good progress in the fourth quarter. The current standing biomass translates to approximately 67 kg per cubic meter, which is in line with an annual production volume of around 4,000 tons HOG. From the system performance we've seen, we are still targeting a density of 80 kg per cubic meter, which in turn means an annual production of around 5,000 tons, but still planning for a gradual and controlled increase. We will also review our production plan going forward to see how we can optimize the utilization of the facility in the longer term.
Taking into consideration, the strong price achievement threshold is three kg plus, we will still see how we can optimize by having more individuals and earlier harvest, rather than pushing for four kg HOG. As most of the fish goes to processing for fillets, it is rather a question of general price achievement and fillet yield more than the actual harvest size. The volume must be compensated by maintaining more individuals in production. For 2025, we have a survival rate of 99% in the growout, excluding incidents.
The largest incidents was the loss of 170,000 fish in one of our production tanks in May. We've also had some small mortality incidents, primarily related to fish transfers. For the year, we achieved 99% superior share, which is really outstanding. I believe both the survival rate and superior share proves the performance capacity of the facility. Bearing in mind the challenges we had in 2025 and the suboptimal growth conditions for a large part of the year. We have several times communicated issues with the turbidity. High turbidity has caused us to reduce feeding, which in turn directly impacts growth. We now have an internal policy that if NTU, which is the measurement of turbidity, if this passes five, we reduce feeding. If it passes eight, we stop.
As you see on these graphs, we are now well below critical levels in all four modules in the grow-out and also well below one NTU. Low turbidity levels gives us better operational control, and we can see the fish and behavior and easier adjust feeding according to appetite. It also gives us the opportunity now to use AI and cameras to monitor. Since the end of December, we could finally start using the AI fish camera. This gave us the opportunity to check our standing biomass and provides us valuable insights to size distribution. Both average sizes and distribution have been challenging for us in 2025, and we have continuously been disappointed despite extensive samplings and efforts to assess sizes and growth. With the AI-based camera, we now have a much better understanding of the biomass, and we can also monitor growth performance.
We have checked all tanks with fish above one kilogram, and we continue on a biweekly basis going forward to check these tanks, monitoring growth and calibrating biomass. As for the quality of the prediction, we see that the camera gives a high degree of precision with smaller deviations, which adds to our comfort. The graph here illustrates this point, showing the deviations from the camera measurements to the actual harvest results. The results of the camera samplings was also the reason for our downward adjustment of biomass, as disclosed in our production update on the ninth of February, and mostly related to batch eleven, which is a mixed batch. In April 2025, due to the reduced capacity following the biofilter incidents, we decided to mix four batches into what we named batch eleven.
At that time, the alternative was to take out small fish, so we therefore decided to keep as many fish as possible in an effort to optimize production volumes and tank utilization. In addition, we continued to face issues through the third quarter, including high turbidity and temperatures and unsteady feeding. This directly affecting growth performance in the batches harvested in fourth quarter and well into the first quarter. I'm now pleased that we are approaching the end of the mixed batch eleven, and the last fish from this batch is expected to be harvested in the mid-March. The batches coming after batch eleven shows much better performance, as you can see here on the graph, and we see the performance improving as we compare batches having less and less time in the suboptimal growth conditions in 2025.
This means our expectations are now finally aligning with our production plan, and perhaps more importantly, also bringing our harvest waste above the three-kilogram threshold in terms of securing good price achievement and revenues. The strong and positive development translates directly into our positive outlook for 2026, and certainly as we enter the 2nd quarter with better performing batches. The 1st quarter, as said, will be heavily impacted by batch eleven and smaller fish and quality, and we expect an average harvest weight of around 2.4 kg HOG. As we enter the 2nd quarter and beyond, we expect to be above three kg HOG on average and gradually improving further. For the full year, we expect a harvest volume between 3,500-4,000 tons HOG, an average size achievement of around 3.5 kilos.
However, adjusting for the first quarter, the average harvest weight for the remaining three quarters is expected to be above 3.5 kg. With the previous slide showing actual price achievement for fish above three kg, we are therefore expecting this to eventually translate into good profitability. The lower volumes and price achievement expected in the first quarter negatively impacts our cash flow and liquidity. We have therefore initiated several dialogues with various banks for additional funding in terms of credit lines to bridge the gap that we see. We're also refinancing a short-term loan, and although we have not reached final conclusions, we're making good progress and have positive expectations to secure these funds with debt financing....
Since we do not expect to fulfill our waiver related to the two months average sales covenant for January and February, we have proactively approached our banks for a waiver for the first quarter. The banks are showing a supportive attitude, although no waiver has yet been given. However, having said that, based on our discussions, we expect this to be granted. We received part of our business interruption and insurance payout in February of approximately NOK 40 million, and we are still waiting for a decision on the full settlement and timing of this payment. We are experiencing positive momentum in the financing discussions, and our banks are showing a supportive attitude, and Kobayashi-san has already initiated several new processes, not only to address the short-term needs, but also the upcoming refinancing in August.
It is also clear that now, as we show more track record, the external interest is increasing, and we expect this to continue as we move forward toward positive cash flow and positive earnings. Wrapping up, we are excited on the outlook for 2026 and beyond, and we feel now that we are finally in good shape and well-positioned. The recent improvements and increased control of our biomass makes us optimistic on our performance and economics as we look into the second quarter and beyond. The issues we had in 2025 are largely resolved, and although we are still seeing the late effects on batch eleven, we see the batches coming behind, showing much better performance.
With the current number of fish and growth expectations, we see a total harvest volume in the range 3,500-4,000 tons HOG for the full year. We're not far from reaching the three-kilogram threshold on average market, average harvest sizes to ten attractive market prices and expect this to materialize in the second quarter and thereafter. As for the financing and refinancing, we are experiencing strong support from our banks and also increased interest from other financing institutions and banks. Starting to finally show economic performance is also expected to further contribute to this interest. Finally, we are also exploring Stage two alternatives. We are receiving incoming proposals also from other markets in Asia. We continue to explore these alternatives, both in terms of location, but also in terms of alternative ways to finance such growth, including more asset-light models.
This also meaning that we are not planning for any such CapEx at current stage. Being an early mover in the grow-out RAS industry and with the learning curve made from planning, construction, and production, Proximar carries a strong value proposition, which is generating inquiries for new opportunities. As I've said before, our focus is first of all, to get Stage one up and running, but we are of course, also looking into future opportunities with the aim to create shareholder values. With these words, I will conclude our presentation today, and we will now open up for questions. All right, we've received one question here, asking why we could not keep or save the fish, growing it to above three kg HOG. If that was related to sales agreements.
The main reason why we had to harvest fish or have below three kg is related to tank capacity. We have been through the fourth quarter, pushing fish from the fourth quarter into the first quarter, but we are now at the level where we have limited flexibility. We also had two tanks, specifically with batch eleven fish, that did not show any significant growth or, and meaning that even though we would hold it back, we did not expect it to grow to three kg within a reasonable period. That's why we decided to free up tank capacity to avoid a chain reaction to later batches. We take out the fish that is non-performing, and we prioritize growth in the coming batches behind.
We have no further questions for now, please, if any questions, if not, we will conclude the presentation. Another question here, "Costs per kilogram remain artificially high at current scale. What is the expected cost trajectory as volumes ramp up?" We are, we have not communicated this yet. This is something we will bring back in our next quarterly update, we do have high cost, artificially high cost for the 2025. We have fish that has been in the facility for a very long time, which also has carried a large part of the production cost. That's why we will see this fish also having very high cost at this stage.
We gradually expect this to improve as we now get to the batches behind. Would you consider report harvest volumes on a monthly basis? We do not at this stage plan for monthly harvest volumes. We will continue on on the quarterly updates as we've done so far. That means that by the end of the quarter, we issue a harvest update just after the end of the quarter, and then we have the quarterly reports, which is in between. It's every the frequency we believe is okay at the current stage. There's a question here on the interest expenses for the quarter.
Yeah, actually, you know, for the fourth quarter 2025, our interest paid is NOK 34.9 million. Interest paid to banks.
There's another question here: What do you expect to invest on a running basis in 2026 and beyond, in maintenance CapEx. We do not foresee any larger investments in the current year. As for maintenance CapEx, we do not foresee any larger maintenance. This is ongoing. We have a technical team that is doing maintenance on a daily basis, and the large part of the equipment has a long lifetime. So we do not see any bigger investments. If there are no more questions, I think we will end this update, and we will be back in the end of May for the next first quarter update. In between, we will also issue the production update early April.