Austevoll Seafood (Oslo:AUSS) Q2 2026 Earnings Call

0:00 Then it's a pleasure for me to invite you to Austevoll Seafood's 2Q presentation. I will first start by taking you through the highlights of our operations in the quarter. I will go more into the details segment by segment. Then I will give the floor to our CFO, Britt Katrina Drevenes and then I will end this session by giving our view on, the different segments we are operating in terms of the market. So starting up, I would say it's been a special quarter for us.

0:48 In terms of salmon, we have performed well in, I would say, two out of, the three regions we are operating in. I would say all in all, we have had a good biological, performance, across all the three regions. Quite good slaughtering rate, good qualities, and also very low mortality during the year. Price achievements, spot prices has been more or less on the same level as last year, saying that in the West Coast Of Norway, we have had some, throat downgrades, which has also impact our price achievements, during this quarter.

1:39 In terms of white fish, I would say another good quarter. In addition, I would say also that, the performance is a bit better than the financial figures, are showing because we are also entering into the third quarter with a higher inventory than we did same period, last year. So the underlying figures is a bit better in second quarter, and what they are showing. And then we have the pelagic segments, where we also announced in the first quarter presentation that there was both a stop in the fishery in Chile and also in Peru as a consequence of higher temperature and to a high percentage of juveniles in the catch.

2:42 So in both regions, the seasons were stopped. So, in summary, I can say that, in Peru, the ligno, has caused that the fishery is still closed. And in Chile, the water temperatures came down in the beginning of June, and the fishing started up again in end June. And I will come, back to the consequences later on when I'm going through segments by segments. And in Chile in particular, third quarter has been good volumes for us, also where we achieved very good prices both for fish meal, fish oil, and frozen products.

3:41 In the North Atlantic, we are also having benefits, of the failure in Peru, with much better prices, for our fish meal and fish oil, which is also represented in the numbers. So all in all, volume wise, we are approximately, half of, the volume in, pelagic volumes in second quarter compared with the same quarter last year. Saying that, both our Peruvian and our North Atlantic activity are performing better than we did financially compared with second quarter last year, and of course, we have, in the quarter, an effect of, the low fishery also financially in Peru. We'll come back to that also later on in the presentation.

4:38 So revenue down by 14%, NOK8.6 billion and EBITDA of NOK1.1 billion. If you take into account, the 50% we have in Pelagia, the EBITDA for the quarter is, 1,258,000,000 NOK, down by 8% versus the same quarter last year, whereas, the Salman operation is contributing with 1,000,000,066, and the pelagic activity is down by approximately, 15% driven by a 150,000,000 NOK, worse performance in Peru, which which if we are going, to first half year, you also see that volume is down, by approximately, 32%.

5:45 And here you can see if you also take into account the 50% of, the Pelagia figures, you see that the EBITDA is only down by 2%, approximately 3,400,000,000, whereas Salmon is contributing with 2,400,000,000 NOK, and we have a 19% increase for the pelagic activity, up with nine ninety one. And the main contributor for the increase is our performance in Chile first half year. And then we are having a strong balance sheet. We have an equity ratio of 52%, net interest bearing debt of just sort of NOK8.8 billion and we have also paid approximately NOK6.5 in dividends during the quarter.

6:49 I would say, Austevoll Seafood is, all about volumes. So on annual basis, we are catching between four to 500,000 tons, on our own vessels. We are producing in our own factories between 1.6 to 2,000,000 tons. We are having, between 80 to 90,000 tons of white fish through our factories and through our fishing vessels, and we are aiming this year to slaughter 225,000 tons of, salmon and trout, during 2026. So then, taking you through the pelagic segment as a start, and I will start up, in Peru, just to give an explanation on the situation in particular which, Alineaux cause.

7:47 So when we did, the research, in front of, the first, season, they identify a biomass of 7,100,000 ton, and they put a quota of 1,900,000 tons, which were approximately 36, 37% lower, than the quota they put same period last year. And the season started up, the ninth of, April, and it continued to the end of April before the season were stopped due to too high incidence of juveniles, in the catches.

8:35 And it's been stopped since, and it's, the total volume which has been caught in Peru, it's approximately 25% of the total quota. So from an already lower quota compared with the same period in 2025, we have in addition also have a very low fishery, which has been the driver where we have seen prices has been coming up. We had originally 133,000 tons, of quota and have caught 26,000 tons in the period, and if you also compare with what we were purchasing in the same quarter last year, you can see that, we have approximately 200,000 tonnes less catch than we had in the same quarter last year, which, of course, impacted our financial performance in the quarter.

9:39 Another consequence is that that, when you have too high incidence of small fish is also that the yield is coming down. So the combined fish meal and fish oil yield was, 24.8%, down from 26.2%, in the same quarter last year. So all in all, we have seen prices has been increasing, I would say during the quarter and also into the next quarter, and as a consequence of, the lack of fish in particular in Peru, but, of course, we are not benefiting a lot of that when we have, these low volumes in, Peru. When it comes to the second season, we have choose this time to leave out the guidance because I think it's anybody guess what the quota could could be, and if there is gonna be a quota in the second season.

10:43 We are expecting that there will be a period with lower temperatures, but also, there is a higher Lineaux out in the Pacific and the magnitude and how it will hit the Peruvian coast will decide, I would say, the size of the quota and also if there will be a fishing, at all. So as a consequence of that, we expect that, the prices will remain strong also going forward. Chile has been, had a quite good development since, I would say the stock collapsed in 2010, 2011.

11:30 We are now back to a volume of 1,100,000 tons, has had a healthy biomass. But as announced in when we had our first quarter presentation in May, fishing were also stopped in Chile due to too high incidence of juveniles, in, the horse mackerel catch. And as you can see, from our presentation, you see that, their own catch is down 52% compared with the same period last year. And then we have also, purchased, ATV from coastal fishermen, we have seen that, the yields and particularly the oil yields has been very good. So although the volume is considerably down in the quarter, the financial result show, a better result in second quarter this year versus same quarter last year, and Blit will take you more in detail, through that.

12:35 And in addition to that, to talk a bit about the coming quarter which we are in now, Fishing recovered in late June, and, up to now, we have been catching, 91,000 tons, and we have to see how the fishing develops going forward. But already know we are not that far away from where we were the first nine months last year, but has been affected a lot of the El Nino. And then we don't know if the El Nino will affect the Chilean fisheries also going into fourth quarter, but we are guiding on a volume of 135,000 tons in total, meaning that, we have to catch approximately 45,000 tons more, for the remaining of the year, and that's

13:45 also gonna be a nice development in in Chile. So what we can say in Chile is that, third quarter will be, by far, better than third quarter last year. We can say that already. And looking forward to the end result in Chile this year, which we think is going to be, have a nice year with the prices we are seeing now, both for fish meal, fish oil and also for frozen products, which Britt will take you through later on.

14:27 Then talking about the North Atlantic pelagic quota development, as you can see from before 2024, the average size of the North Atlantic quota was around 4,000,000 tons. But in 2025, the volumes in the North Atlantic came down with 800,000 tons, and also the volumes, got further down with 600,000 tons in 2026. In 2025, in addition to the drop in quotas and less raw material for Pelagia's factories, we also had a drop in fishmeal and fish oil prices second half, taking the performance from Pelagia further down compared with what it's been previously.

15:23 This year, the price development will be the opposite, so we are expecting better prices third and fourth quarter than, so opposite development than what it was in 2025. And as a consequence of, the El Nino, we are expecting Pelarga to deliver much better, in particular the marine protein and oil segments, in twenty nine, third and fourth quarter versus the same period last year. We have been producing Blue Whiting, a North Sea Herring, this season. It's a seasonable low production quarter, but you can see our EBITDA in the second quarter is approximately double of the same period last year, and it's mainly driven by a better performance, from marine protein and oil, due to higher prices.

16:29 So all in all, summing up, the Pelagic segment, you see that the volume in this quarter was down with 51%. It's down, I would say, across the three segments. But, I would say, as a consequence of Peru's failure of fishing the quota, both Chile and Pelagia is contributing with better margin as a consequence of higher prices.

17:06 Then coming to second quarter salmon highlights, and if you want to have a more detailed presentation, I suggest that you go in and look at the webcast of LHRE Seafood. All in all, EBIT of NOK $574,000,000, down from 680,000,000 NOK. Farming, 236, down 20,000,000, versus, same quarter last year, mainly related to, a lower slaughtering volumes. Wildcatch, 140,000,000, more or less online, with the same, EBIT number last quarter, but we are also entering third quarter with a higher stock and inventory, than we did last period, so the underlying performance is better.

18:02 And then, a lower performance in the market operation, a bit more challenging conditions, stronger NOK, higher logistical cost in the period, has taken down, I would say, the result, from second quarter twenty five to this quarter, but going forward we are expecting to deliver more or less the same figures as we did in the second half twenty twenty five. Volumes, 44,000 tonnes, it's divided by 7,000 tonnes in Leria Ruwa, 20,000 tonnes in Leria Mit and 19,000 tonnes in Leria Chertol. EBIT per kilo, more or less on the same line as it was last year, 1 NOK less.

18:53 Lera Aurora, another good quarter, 19.1 NOK per kilo. Lera Met, 13.5 NOK per kilo, and lerisotrol, 4.5 NOK per kilo, and it's mainly due to high downgrades of the throats in the period, which I would say ended in, June this year. Going on volumes, you see that, we slaughtered 212,000 tons in '25 and are aiming to increase with 217,000 tonnes in '26 driven by the 50% share we have in Scottish Seafood.

19:41 Down to the white fish highlights. A very good performance in the quarter. Now we have had a drop in the cold quarter for the last five years, and it's also pleasant also to announce that it seems like we have reached the bottom and the recommendations for next year is 10% up again. And also the recommendation for Haddock is 18% up, and then it's a reduction in SAIT. But, this is also a quota we have so far, maybe not an expectation that we're gonna catch all that, fish, during next year, so it's not that crucial.

20:28 This is the year I would say that, the raw material volumes has been on the lowest, since we came in, but has been compensated with very high prices both for cord headhook and seitan. We are expecting that we will have an EBIT in this segment, between 400 to 450,000,000 NOK this year, which is the best year, so far.

21:00 Then I will give the floor to Britt Katrina to take you more into details the number. I will start with the presentation of the financials and to start, Arne has talked you through the operation in the quarter. So this table sums up the raw material intake in the quarter and first half year. When we look into the estimate for 2026, given the high El Nino driven uncertainty, the 2026 total volume for Peru is set equal to the total catch as of today and for illustration purposes.

21:46 This figure includes our 50% share of pelagia. And Anna has taken you through the key figures in the start of the presentation. So I will try not to repeat too much. But in short, the revenue is down by 10% and the adjusted EBITDA is down by 8%. And the reduction in earnings are subject comes from Lera Seafood Group and Austroil Group, and we have seen an increase in earnings in Food Corp and in Pelagia. And we will look closer into this when we are going through the segments.

22:30 Since the key figures have already been presented, I will start underlying profit before tax and fair value adjustment, which is down 22% from $493,000,000 in second quarter last year to EUR $385,000,000 second quarter this year. The lower profit comes as a consequence of a lower slaughtered volume of salmon and also from the suspended first fishing season in Peru. As you can see, we also have some higher depreciation, $585,000,000, up from SEK $544,000,000. And we have had quite high CapEx in new technology in within farming the latest years. And as a consequence of that, also the depreciation increased somehow.

23:28 When we look at the result or the profit before tax, that is negative, it's minus SEK $623,000,000. It was SEK 14,000,000 plus in second quarter last year. And this profit is substantially impacted by the very high fair value adjustment of biological assets in the quarter. You can see that the portfolio has a negative biological fair value adjustment of EUR $889,000,000 and the fair value adjustment in the associate are SEK 119,000,000, which impact, of course, profit before tax. But also net profit for the year, which is minus SEK $254,000,000 versus NOK 106,000,000 in second quarter last year.

24:19 Looking at earnings per share, and we look at earnings per share before the fair value adjustment related to biological assets, that is NOK 1.6 in the quarter, up from NOK 1 0.3 in same quarter last year. The main value driver for Lari Seafood Group is, of course, harvested volume of salmon, which was close to 44,800 tonnes in second quarter this year, down 4,000 tonnes from 48,900 tonnes in same quarter last year. Spot prices were in line with same period last year, but operational costs are materially down quarter on quarter from a very strong biology.

25:08 Price realization, however, were impacted by a lower price for throat and that was NOK5 lower per kilogram than for salmon in the quarter. And the harvested volume of throat was approximately 10,000 tons. And for wild catch, we had a 6% higher catch volume compared to same quarter last year. We had higher realized prices for key species. So you can see that the result is more or less in line with same quarter last year. However, we had a significant inventory build in the quarter. So catch values were substantially higher than what is recorded in the profit in the quarter.

25:58 This inventory will be sold during the third and fourth quarter. Market operation revenue here also impacted by lower volumes of salmon and a strengthening of the NOK. We have a higher margin in the quarter compared to first quarter this year. It was 3.5% in second quarter, and it was 2.4% in first quarter this year. So to sum up, revenue of almost SEK 7,900,000,000, EBITDA adjusted of SEK 1,100,000,000 and the EBIT adjusted of SEK $574,000,000, down from NOK $680,000,000 in the same quarter last year. In Austral, we have had very low activity, as Ord has already mentioned.

26:52 The first fishing season was suspended and the total raw material intake for Austral was 34,000 tonnes, down 200,000 tonnes from same quarter last year. Fishmeal and fish oil prices are up, but of course do not compensate for the shortage of raw material. So also sales volumes are down, of course, fishmeal and fish oil sales volume of 12,000 tonnes, down from 39,000 tonnes in the same quarter last year. Revenue in the quarter of million and a negative EBITDA of 1,000,000 and a negative EBIT of minus SEK 124,000,000 versus SEK 26,000,000 in same quarter last year.

27:47 Food Corp. Has had a very strong performance in the quarter. Also Food Corp were impacted by the ongoing El Nino and warmer sea temperatures. So the fishery started to slow down in March and that has continued in second quarter. The fishery started to pick up again towards the end of the quarter and has been good now in Q3. The raw material in take in total was 31,000 tons, down from 39,000 tons. And also you can see there is a substantially lower sales of finished products, only 9,000 tons of frozen products down from 33,000 tons in same quarter last year.

28:36 However, the tightening of the market for both fishmeal fish oil, but also frozen products has given us higher prices. So frozen prices are up 84%, fishmeal prices up 54% and fish oil prices up 167 percent compared to same period last year. Revenue in the quarter was SEK $4.00 6,000,000, EBITDA was SEK 134,000,000 and the EBIT was SEK 119,000,000, up from SEK 80,000,000 in same quarter 2025. Cobbe Wikka Furuhollmann Obtrecht, they have harvested 2,100 tonnes of salmon, that is up 7% compared to same quarter last year.

29:25 Spot prices in line with same period last year, but costs are significantly lower year on year. So that gives an EBIT per kilo in the quarter of NOK 7.8, up from a negative EBIT per kilo of minus NOK 4,300,000 in same quarter last year. In total revenue of NOK 149,000,000, EBITDA adjusted of NOK 29,000,000 and EBIT adjusted of NOK 16,000,000, up from a negative EBIT of NOK 8,000,000 in same quarter twenty twenty five. The group has a very strong balance sheet and the equity ratio is 52%. The total assets are SEK 50,300,000,000, that is down 3% compared to end of second quarter last year.

30:17 Some of the group companies have other functional currency than NOK. And of course, weakness or strengthening of the NOK will impact the conversion of the functional currency into NOK. By the end of June, the group had a net interest bearing debt of NOK 8,800,000,000, that's in line with the end of twenty twenty five, but it's down from SEK 9,100,000,000 by the end of June twenty twenty five. We have had a very strong cash performance from operating activities, and that was SEK 1,700,000,000.

31:04 And that is supported by a significant release of working capital in the quarter, both from farming, but also from the pelagic activity. Cash from investing activity is minus $219,000,000, and that is lower compared to same quarter last year, but this is more or less timing. We expect that our CapEx in 2026 will be in line or a little bit lower than 2025. Cash from financing activity is minus SEK 2,200,000,000, and you can see that dividend paid out is the largest amount there, it's over SEK 2,000,000,000. And of this, 1,300,000,000 was paid to the shareholders of Austevoll Seafood Asa.

31:56 And we ended the quarter with a cash position of SEK 4,600,000,000, which is up from SEK 4,500,000,000 in same quarter last year. Thank you very much. Then I will give you the view on the different market for the different segments we are operating within, and start, to give our reflection on the fish meal market. And among the largest, fish meal producers, you can also see here that it's not only in Peru, where production is much lower than it was compared with last year, you also see same development in Chile, Denmark, and Norway, and also the rest of the North Atlantic. So volume is down, I would say up to August among the biggest producer with 54%, and that has been one of the reason why we have seen increasing prices.

33:04 And then the prices, we are announcing here is not updated because it's, related to the latest trade which has been done in Peru, which was done in the beginning of the season before fishing were failing. So, again, the supply remains tight, and that's the reason why we have seen now fish meal prices, increasing to all time high at at current current present day. Also on fish meal consumption, we also look into, China, which normally consumes 625% of the total, volumes being produced.

34:01 And I can see here that the stock in China is 54% down. The weekly offtake is, of course, less as a consequence of the stock situation. Prices is higher than, what it was traded in Peru, and we are also seeing that, as a consequence of the volume, Peru has the the imports from to to China has also gone down, mainly driven by lower volume from, Peru. If you look at Chilean fish oil production, it's not that much down compared with fish meal production, and that's mainly due to quite good high oil yields, in particular in the, fisheries in, the salt. So the production there is only down by 3%.

34:56 Peru is down by 68%. If you look at total production of four to 500,000 tons, an oil yield of less than 2%, the total production in the season has been approximately 8,000 tons, which is very low compared with a normal season in Peru, and that's the reason why you in particular see that the omega three grades is is, showing $12,250 per ton. And I would say the feed grade is not representative because I think it's less volumes, sold in, that period, and prices for feed is higher than what you see here in, the picture.

35:47 Then to talk about salmon supply, if you look from '24 to '25, the global supply of salmon, had a growth of 12%, which were tremendously high. And at 2026, the supply is expected to be around 3%, and in '27, 3%. If you look at the volumes, from Norway, I would say that this growth is already taken out, and we are expecting, I would say, negative, growth, on the volumes in the continuous of 2026. And I would also say that market sentiments, particularly on the supply side, is favorable for stronger prices going into the end of the year, also compared with the same period, last year.

36:48 We see, second quarter prices is more or less in line with, 2025. That's in NOK, and if you consider that the NOK has been strengthening through euro, I would say the underlying prices in euro were 6% higher in the quarter than how it was in second quarter twenty twenty five. And then we have had a good increase, in the EU market, which is important for the Norwegian salmon production, and we also see that China and Hong Kong is up at 22%, in the period, which is gonna be an important market for, the Norwegian salmon production going forward.

37:36 So summing up, I would say we have had a good, biological, performance. We have had a summer with lower temperatures than normal. I would say, bringing our biomass in a better state into the autumn which we are heading, and we are a bit optimistic in terms of improving our performance this autumn compared with the last autumn, in 2025. Cost per kilo, is down, from first quarter to second quarter, and we're also expecting also to continue this, development with a bit lower cost, also when you take into account that, fish feed is seems to be more expensive, at least to the end of the year.

38:32 Whitefish, good performance. I would say also it's very positive that, the land based industry are also, showing improvements, which does the total pictures better. And you see the recommendation both for CODE and HODOC for next year. We'll probably continue a new path with a bit better, development on a code quota, which is important, in particular for this segment. Then in Peru, we are expecting that, 2026 is gonna be a challenging year, and I would say the most exciting this year is gonna if if it's gonna be a second season or not, if it's gonna be a second season, I think it's gonna be less than it will be in a normal year and, but but, at very high prices.

39:44 And both Chile and our activity in the North Atlantic is contributing by the fact that, there is less volume and, we are achieving fantastic prices, both for fish meal, fish oil and also for frozen, at the time. So all in all, it's fair to say that although that Peru is down, we expect a better quarter in third quarter than we did third quarter last year, and also I would say on the pelagic side although the reduction is down in Peru will be offset by the price achievements we have both in Chile and in the North Atlantic, compared with second half last year.

40:37 Thank you and have a good day.