Andfjord Salmon introduces post-smolt strategy | Fourth quarter and interim full-year 2023 financial results

29 February 2024

Andfjord Salmon today announces plans to implement a post-smolt production strategy, a supplement to production of human grade salmon, to capitalise on unutilised pool capacity in the first half of each production cycle. The company’s build-out at Kvalnes is progressing according to plan.

POST-SMOLT STRATEGY HIGHLIGHTS

• Estimated 15-25% increase in EBIT through a combined production strategy

• Utilisation of surplus space in pools enables 10% higher biomass turnover

• No additional infrastructure capex required

• Shorter runway to revenue and positive cash flow effects

• Multiple positive biological and environmental effects for ocean-based fish farmers

• Strategic partnership with Eidsfjord Sjøfarm/Holmøy Havbruk for post-smolt cooperation

“We have worked on the post-smolt strategy for a long time and are delighted to present it to our shareholders today. It will bring substantial benefits to ocean-based fish farmers, the fish itself, the marine environment, the regional aquaculture industry, and Andfjord Salmon and is a valuable supplement to our own production of human grade salmon. We’re simply utilising our infrastructure in a smarter way to create more value for multiple stakeholders,” says Martin Rasmussen, CEO of Andfjord Salmon.

MORE SUSTAINABLE FISH FARMING 

There is substantial industry demand for post-smolt due to the significant benefits of shortening the ocean-based grow-out phase. Releasing larger and more robust fish into ocean net pens offers multiple biological and environmental benefits, including lower susceptibility to diseases, reduced time of exposure to salmon lice, and improved survival rates.  

Such ocean-based rewards in combination with land-based benefits, including longer production time in facilities with collection of biological waste and no escape risk, can enable even more sustainable aquaculture production. 

UTILISING AVAILABLE CAPACITY 

Andfjord Salmon has significant surplus pool capacity after the release of smolt in the company’s pool. The plan is to utilise some of this unused capacity by releasing more smolt. After reaching a certain biomass density level, typically after 5-7 months when the fish has reached an average weight of around 1 kilogram, some of the fish will be sold as post-smolt to ocean-based fish farmers in the local region.  

“In short, we are enhancing production capacity and income potential without adding additional infrastructure costs,” says Martin Rasmussen. 

According to Andfjord Salmon’s own calculations, the post smolt-strategy will enable 10 percent higher biomass turnover, which in turn means an estimated 15-25 percent increase in EBIT. The company’s cash flow will also improve considerably as it can generate sales revenue from post-smolt after typically 5-7 months production time, in addition to income from the harvest of human grade salmon after a full 12-15 month production cycle.  

COOPERATION WITH EIDSFJORD SJØFARM 

Andfjord Salmon has entered a strategic collaboration with ocean-based fish farmer Eidsfjord Sjøfarm/Holmøy Havbruk to provide post-smolt for selected, nearby ocean-based farming locations as part of upcoming production cycles. Eidsfjord Sjøfarm/Holmøy Havbruk and Andfjord Salmon’s initial production plan has been approved by the relevant Norwegian authorities.  

In addition, Andfjord Salmon is in discussion with other local, conventional salmon farmers regarding entering into similar collaborations.  

“I have said many times that Andfjord Salmon would not be able to achieve the biological results we have done without learning from ocean-based farmers and tapping into the extensive competence of the Northern Norwegian fish farming industry. By collaborating on a post-smolt strategy, we can boost the environmental, biological, and economic development of the aquaculture industry in the Vesterålen region,” says Martin Rasmussen.  

BUILD OUT ON TRACK 

In its current build-out phase, Andfjord Salmon is completing four new pools, which brings the total production capacity to 8,000 tonnes HOG at Kvalnes in 2025. Andfjord Salmon is targeting a total production capacity of 40,000 tonnes (HOG) at Kvalnes through a gradual increase in volume between 2025 and 2030. In this initial build-out phase, Andfjord Salmon is also developing major shared infrastructure, such as waterways and a harbour area, that will support future production of 40,000 tonnes at Kvalnes.  

This January, Andfjord Salmon announced that the excavation of the next 12 pool pits at Kvalnes had been completed a full quarter ahead of schedule. Consequently, preparation for production of the four first pools has already been initiated. 

The other two ongoing workstreams – development of the harbour area and waterways – are on track.   

FOURTH QUARTER 2023 FINANCIAL RESULTS 

Andfjord Salmon is currently expanding its Kvalnes facility and therefore had no salmon production or revenue in the fourth quarter of 2023. The company had an operating loss of NOK 19.4 million in the fourth quarter of 2023, versus a loss of NOK 18.2 million in 2022.   

PRESENTATION AT 08:00 (CET) TODAY 

Andfjord Salmon AS will provide a strategic update and presentation of the fourth quarter 2023 financial results at 08:00 (CET) today. 

The webcast presentation can be watched at the following link:  https://channel.royalcast.com/landingpage/hegnarmedia/20240229_2/ 

The presentation will be held in English. The presentation materials are attached to this announcement.  

DISCLOSURE REGULATION 

This is information that Andfjord Salmon AS is obliged to make public pursuant to the EU Market Abuse Regulation (MAR) Article 17 no. 1. The information was submitted for publication, through the NTB Kommunikasjon service by the contact persons listed below. 

CONTACTS

Investors:

Bjarne Martinsen, CFO, Andfjord Salmon AS, +47 975 08 345, bjarne.martinsen@andfjord.no

Media:

Martin Rasmussen, CEO, Andfjord Salmon AS, +47 975 08 665, martin@andfjord.no

ABOUT ANDFJORD SALMON

Located at Kvalnes on the island of Andøya on the Arctic Archipelago of Vesterålen, Norway, Andfjord Salmon has developed an innovative and sustainable aquaculture concept for land-based farming of Atlantic salmon, based on a flow-through technology solution. The company's ambition is to build the world's most sustainable and fish-friendly aquaculture facility of its kind.

Andfjord Salmon AS is listed on Euronext Growth under the ticker ANDF.