Salmon Evolution presented its financial results for Q1 2023. In the report, they highlight the continued increase in production at Indre Harøy and preparations for the second phase, as well as its international expansion plans, and latest financing package agreements.
The company has some positive data but is focused on the company's plans for 2023. Thus, Salmon Evolution continues to see significant growth potential in the salmon demand, for which they believe that land-based farming will have to play an especially role alongside conventional farming for the industry. Furthermore, the company emphasized that with Phase 1 at Indre Harøy now completed and a solid financial platform in place, the company is in a unique position to continue to lead and shape the development.
The increase in biomass production continues in full swing in Q1 producing a net biomass output of around 740 tons. A figure compounded by record biomass production of about 320 tons in March alone. As of March 31, 2023, the Company had total standing biomass of nearly 1,500 tons.
Moreover, the growth engine remains active, as proved by the agreement signed with DNB and Nordea for a new green debt financing package totaling NOK 1.55 billion related to phases 1 and 2 at Indre Harøy. All of this quantity is also added to its available liquidity of NOK 454 million.
In April, Phase 1 of Indre Harøy was ready. With the 12 tanks completed, the company expects to optimize the production process with both production lines fully operational.
On the other hand, preparatory activities for Phase 2 continued in the quarter. Salmon Evolution explained in this regard that "the Company has not entered into contractual commitments, but is in advanced negotiations with contractors for the construction of phase 2". Thus, if events continue as planned, construction of Phase 2 should commence during the second half of 2023.
Over the past 14 months, the company has steadily increased production at the Indre Harøy facility. They have accumulated a total of five batches during this time. In the second quarter, two smolt launches are planned, followed by three more in the second half of 2023.
At the end of April, the Norwegian company reported an increased mortality rate in selected groups of fish at Indre Harøy. However, rapid action was taken, resulting in a progressive stabilization of daily mortality and a return to normal levels after freshwater treatment.
As explained by the company, the reported increase in mortality was caused by AGD, which caused problems with gill health. Nevertheless, although monitoring continues, the company has had a quick and effective intervention. Among the measures, temperatures, and feeding were reduced, and UV doses were increased in the inlet water. So far, the freshwater treatment has had a good effect, and the situation is stabilizing.
Besides, the Company has implemented a series of actions to minimize the risk for the future.
"We are pleased to see that the decisive actions taken over the last weeks is now stabilizing the situation and enabling the Company to transition back to production modus," said CEO in Salmon Evolution Trond Håkon Schaug-Pettersen.
During the quarter, there was progress on international expansion plans in South Korea through K Smart Farming and in North America. The 90% design review for the smolt site in South Korea was completed, and efforts intensified on the feedlot site. Simultaneously, the permitting processes moved forward, with significant clarifications obtained for key permits. In North America, the company continued evaluating potential production sites and maintained ongoing communication with diverse stakeholders.
Salmon Evolution is land-based in Indre Harøy (Norway). This salmon farming company targeting a production capacity of 100,000 tonnes HOG by 2032. The Company's core focus is on extending the ocean's potential by transferring the best preconditions offered by the sea to farm fish on land through its chosen hybrid flow-through system technology (HFS). This secures a truly sustainable production process with controlled and optimal growth conditions and limits operational and biological risk.