Andfjord Salmon today presented its Q3 2023 results which included data from its inaugural harvest earlier in the quarter, which generated revenue of NOK 37.3 million (EUR 3.1 / USD 3.4 million). The Atlantic salmon land-based producer used the presentation to confirm what it had already previewed earlier this month: its construction at Kvalnes, Andøya, Norway, is ahead of schedule. Works on the land-based salmon facility continue at full pace and the excavation of the pool shafts for the current construction is expected to be completed during Q1 2024.
At the end of July, Andfjord Salmon closed its first harvest with excellent results and survival rate. That inaugural harvest achieved a biomass of 646 tons, equivalent to about 530 tons of HOG, and had an industry-leading survival rate of 97.5% and a superior share of 91.1%.
"The fact that 97.5% of the fish survived underscores that the fish has had excellent living conditions in the pool. As a consequence of this, we have harvested fish that may not have survived in other fish farming facilities," Martin Rasmussen, CEO of Andfjord Salmon, said at the time. "A high survival rate is obviously the most valuable from a financial perspective," he added. As mentioned, we have now learned that, in total, it generated revenue of NOK 37.3 million (EUR 3.1 / USD 3.4 million).
The third quarter financial results presented today indicate that after that first harvest and subsequent sale of the fish, Andfjord Salmon had an operating income of NOK 27.7 million (EUR 2.3 / USD 2.5 million), compared to zero in the same quarter last year.
The operating loss, meanwhile, was 63.64% higher in this quarter than in the same period of 2022, NOK 28.2 million (EUR 2.4 / USD 2.6 million), compared to NOK 17.6 million in the previous year (EUR 1.4 / USD 1.6 million).
Operating loss is common when companies are still under construction, so in this quarterly results presentation, Andfjord Salmon emphasized other more positive indicators, such as the aforementioned progress in the excavation of the pool shafts for the current construction. As of today, the pool shaft excavation work is 80% complete, up from 35% at the end of August.
According to the company, contractors will be ready to start construction of the first four ponds during the first quarter of next year. When ready, these will increase Andfjord Salmon's production volume to 8,000 tons (HOG) by 2025. The goal is to reach a total production capacity of 40,000 tons (HOG) at Kvalnes by gradually increasing the volume between 2025 and 2030.
"The plan was to complete excavation of the 12 next pool pits by the end of the second quarter 2024. Right now, it looks like we will finalize this work during the first quarter next year – a great start to our build-out at Kvalnes," said the land-based salmon farmer.
"Progress ahead of schedule in the early stages provides added flexibility for the subsequent workstreams. It de-risks the build-out and reduces the probability of unwanted cost overruns. The construction performance so far is highly encouraging," Martin Rasmussen remarked.
In addition to the pools, in this initial phase of construction, Andfjord Salmon is also developing shared infrastructure such as the waterways and harbour area, which will support the future 40,000-tonne production at Kvalnes.
For current construction, the company has adopted a mass balance approach whereby the excavated masses from the pool pits and waterways are used in the development of a new harbour. This significantly reduces operating costs and CO2 emissions associated with construction.
In the designated harbour area of Kvalnes, the excavated masses will be used to build a quay and a breakwater. Thanks to the good progress of the pool pit excavation, this line of work is currently 20% complete.
The inbound and outbound waterways, on the other hand, have reached an advance rate of 5%, compared to 1% at the end of August.
Located in Kvalnes on the island of Andøya in the Arctic archipelago of Vesterålen, Norway, Andfjord Salmon's ambition is to build the world's most sustainable and fish-friendly aquaculture facility of its kind. To this end, the company has developed an innovative and sustainable aquaculture concept for land-based farming of Atlantic salmon, based on a continuous flow technology solution. Andfjord Salmon AS is listed on Euronext Growth under ticker ANDF.