Andfjord Salmon (ANDF) Q2 2024 earnings summary

Executive summary

• Kvalnes facility build-out is progressing on or ahead of schedule, with pool pit excavation and waterway development completed or accelerated, de-risking key construction phases and leveraging unique technology and location advantages at Andøya.

• NOK 350 million private placement completed in May 2024, attracting new and existing industrial investors, including High Liner Foods and Jerónimo Martins, enhancing financial flexibility for expansion.

• Sustainability is integrated into construction, with efficient use of excavated materials reducing costs and environmental impact.

• Nofima's final report validated fish welfare and health standards, supporting a science-based, sustainable approach.

• Announced "post-smolt" strategy to utilize surplus pool capacity, expected to increase EBIT by 15–25% and improve cash flow.

Financial highlights

• Q2 2024 operating loss was NOK 19.2 million, with H1 2024 operating loss at NOK 36.2 million, mainly due to lower sales revenue.

• Q2 2024 revenue was NOK 78,000; HY 2024 revenue at NOK 135,000, with minor sales income from frozen products harvested in 2023.

• Cash and deposits at NOK 228 million as of June 30, 2024, up from NOK 52.4 million at June 30, 2023, but down from NOK 250 million at year-end 2023.

• Book value of property, plant, and equipment rose to NOK 1,443 million from NOK 877 million at year-end 2023, reflecting ongoing investments.

• Actual build-out costs at Kvalnes reached NOK 968 million as of June 30, 2024, below the NOK 1.65 billion budget.

Outlook and guidance

• Four new pools and major infrastructure at Kvalnes expected to be operational by mid-2025, increasing capacity to 8,000 tonnes HOG.

• Gradual ramp-up to 19,000 tonnes HOG by 2027 and full potential of 40,000 tonnes by 2030.

• "Post-smolt" strategy anticipated to boost EBIT by 15–25% and enhance cash flow.

• All workstreams for expansion are on or ahead of schedule, with significant increase in pool construction activity expected in September 2024.

• Further license applications planned in line with original business plan.