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time and on budget
· Closing of first equity tranche of NOK 27.4 million in Korean JV company K
Smart and signed agreement for extended feasibility study for both the smolt and
grow out facility in South Korea
· Secured and formalized a NOK 625 million debt financing package ensuring a
fully funded platform for Indre Harøy phase 1 and equity commitment for K Smart
· Available cash of NOK 868 million (NOK 2.86 per share) on 30 June 2021
Subsequent events
· Listing of the company’s shares at the main list on Oslo Stock Exchange
· Acquisition of renowned smolt company Kraft Laks AS securing in-house
sourcing of high quality smolt for Indre Harøy phase 1, with identified growth
potential to cover smolt needs for at least Phase 2
Since the groundwork at Indre Harøy started in May 2020, Phase 1 has developed
according to plan, on time and on budget. Construction work during first half
2021 has mainly been on the production facilities, where the company has made
solid progress on construction of buildings and structures. Seven out of twelve
fish tanks are assembled, where the remaining fish tanks are expected to be
completed in Q4. The first process equipment and pipes have also arrived at
Indre Harøy and are expected to be installed during the next quarters. The plan
for first smolt release in March 2022 remains on track.
Total capital expenditures during the quarter were NOK 172 million, of which NOK
168 million were investments related to the turnkey project with Artec Aqua at
Indre Harøy. As per 30 June 2021, accumulated capex from project initiation in
2019 amounts to NOK 506 million.
During the quarter, Salmon Evolution announced the signing of legally binding
loan documentation for the senior secured debt financing package of up to NOK
625 million, relating to its Phase 1 build out at Indre Harøy at commercial
competitive terms. The debt package ensures a fully funded platform for Indre
Harøy phase 1 and equity commitment for K Smart Farming.
Salmon Evolution executed its first tranche of about NOK 27.5 million in Korean
JV company K Smart during May 2021. Together with Dongwon’s initial equity
investment into K Smart, the proceeds will be used to finance: (i) design and
engineering, (ii) site evaluation and permitting, (iii) acquisition of an
existing and operating smolt facility in Jeongseon of which closing has already
taken place and (iv) general corporate purpose. Construction of phase 1 is
expected to start in 2022, with commencement of grow out production in 2024.
Commenting on the development, CEO Håkon André Berg, said:
"Activity on Indre Harøy was high during the quarter, and we are happy to see
that the project is developing according to plan and that we remain on track for
production start in the first quarter of 2022. The joint venture with Dongwon
Industries also made real progress this quarter with closing of the first equity
tranche, which allows the project to commence with feasibility study for both
the smolt and grow out facility.
Further, we are very grateful for the support shown by our banks and believe the
debt financing package is unique in the new land-based salmon farming industry",
says Berg.
On July 9, the Salmon Evolution share was transferred from listing on Euronext
Growth to the main list on Oslo Stock Exchange, opening new opportunities for
funding of future growth.
On 16 August 2021 Salmon Evolution announced the acquisition of Kraft Laks AS
(“Kraft Laks”), a smolt producer located in Dalsfjorden, Volda. Kraft Laks has
an annual production capacity of around 1.8 million smolt but holds licenses to
produce up to 5 million smolt per year subject to certain conditions. The
acquisition gives Salmon Evolution operational control over critical parts of
the value chain and ensures that the company is self-supplied with smolt for
Phase 1 at Indre Harøy, and potentially for Phase 2 if expansion is undertaken.
Outlook
Salmon Evolution’s main focus short- to mid-term, is centered around
successfully managing the company’s two construction projects, preparing for the
first smolt release in March 2022, in addition to integrating Kraft Laks into
the group.
Over the coming months Salmon Evolution will further scale up the organization,
recruiting more and more operating personnel. In parallel, significant resources
will be devoted for the development of internal systems and infrastructure.
Following a very receptive capital market for land-based salmon farming projects
during second half 2020 and into 2021, the sentiment has become more cautious.
With this backdrop, Salmon Evolution is in a unique position with its fully
funded platform.
Salmon Evolution is confident that land-based salmon farming will play a vital
role in growing the overall salmon market. However, as lead times are long,
capital intensity is high and access to competent and experienced personnel may
become a bottleneck, it will take time before meaningful volumes are brought to
market.
With a solid project pipeline established, funding secured and a strong
organization in place, Salmon Evolution is uniquely positioned to take a
position as a global frontrunner in the development of land-based salmon
farming.
Results presentation
CEO Håkon André Berg and CFO Trond Håkon Schaug-Pettersen will present the
results by webcast today, Thursday August 19 at 08:00 a.m. CEST.
The presentation and subsequent Q&A will be held in English.
The presentation can be accessed at www.salmonevolution.no, or with the
following link: https://streams.eventcdn.net/salmonevolution/q2-h1-2021/
For further information, please contact:
Håkon André Berg, CEO, Salmon Evolution
[email protected]
+47 41 19 22 57
Trond Håkon Schaug-Pettersen, CFO, Salmon Evolution
[email protected]
+47 91 19 13 27
About Salmon Evolution
Salmon Evolution is a Norwegian land-based salmon farming company focused on
extending the ocean’s potential by transferring the best preconditions offered
by the sea to farm fish on land through its hybrid flow-through system
technology (HFS). This secures a truly sustainable production process with
controlled and optimal growth conditions and limiting operational and biological
risk.
The company’s first production facility is under construction at Indre Harøy,
strategically located on the Norwegian west coast with access to unlimited fresh
seawater, renewable energy, established infrastructure for salmon farming, and
an educated and experienced work force. The entire project is designed for an
annual capacity of approx. 31,500 tonnes HOG. In addition, the company is
expanding internationally through a JV in South Korea with Dongwon Industries
for a 16,800 tonnes HOG production facility.
Salmon Evolution ASA is listed at Oslo Stock Exchange under the ticker SALME.
To learn more, please visit www.salmonevolution.no
This information is subject to the disclosure requirements pursuant to section 5
-12 of the Norwegian Securities Trading Act.
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