Arctic Fish Holding AS (AFISH) Earnings Call Transcript & Summary

Hello, and good day to everyone. We are here to present the results for First Quarter '25 for Arctic Fish. My name is Daníel Jakobsson, and this is May 1, the CEO of the company. I've been with the company since 2021 in the position of Chief Business Development Officer. And in that position, I've touched on most of the company activities. Arctic Fish is well positioned for the growth ahead. We have a strong and diverse license portfolio, and we have control of the whole value chain from smolt to sales. We have state-of-the-art smolt production in Norðurbotn, where we can meet our future growth targets. We have 5 farming sites in 5 fjords and a brand-new harvesting plant that is well located to serve our farming sites and has the capacity needed to handle our volumes and serve other farmers. Our product is second to no other and high share of superior fish from our amazing Westfjords gives us opportunities when it comes to selling our fish. In the first quarter, we had good biological performance on most sites. The temperature has been favorable compared to last year's and mortality has been low, except for one site where we've had increased mortality. Even if we have had good biological performance, markets have been challenging and our price achievement compared to last year is lower. In the quarter, we harvested 3,140 tonnes compared to 2,531 tonnes last year. The revenue this year was EUR 22.1 million compared to EUR 24.1 million last year. Operational EBIT this quarter was EUR 0.16 a kilo compared to EUR 3.84 per kilo last year. I will now hand over to Baldur Smári, our CFO, who will go over the financials.

Thank you, Daníel. My name is Baldur Smári Einarsson, and I am the Chief Financial Officer of Arctic Fish. As always, we will begin with a summary of the profit and loss. In the first quarter of 2025, we saw negative development in our financial performance compared to the same period last year. Let's take a look at the highlights. Firstly, as for the top line, our total revenues for the quarter amounted to EUR 22.1 million, representing a 9% decrease from EUR 24.1 million in the first quarter of 2024. This decrease can be traced to market conditions that have impacted price achievement this year. Looking at profitability, the operational EBIT stood at EUR 0.5 million, which is a decrease from last year's EUR 9.7 million. The overall EBIT was minus EUR 16.2 million in quarter 1 compared to EUR 10 million in the same quarter last year. The change from last year can be traced to lower operational EBIT and EUR 13.4 million negative fair value adjustment. When it comes to financial items, net financial losses were EUR 2.5 million in the quarter compared to EUR 2.7 million in the same period last year. Next, we look at the financial position. At the end of first quarter, our total assets stood at EUR 228 million, a decrease of EUR 22 million from the prior period quarter 4 of 2024. This change was mainly related to a decrease in biological assets. In terms of net interest-bearing debt, we achieved a slight improvement, reducing debt for EUR 133 million at the end of 2024 to EUR 131 million by the end of March 2025. This reflects our continued efforts to manage debt levels effectively, and we will break this down further in the next slide. Turning to equity. Our total equity decreased to EUR 73.4 million, down by [ EUR 15 million ] from the previous quarter. Let's move into the cash flow and net interest-bearing debt breakdown. In the first quarter of 2025, net interest-bearing debt decreased slightly from EUR 132.7 million to EUR 131.1 million, mainly due to positive operational cash flow. This improvement is largely related to working capital release since the first quarter of the year typically has a lower buildup of biomass as a result of biological seasonality. Capital expenditures have had a EUR 5.1 million impact on debt levels in quarter 1 as we continue to invest in our operations. Key contributors to cash flow this quarter include an operational EBITDA of EUR 2.7 million, complemented by EUR 10.7 million from working capital changes, which together resulted in a total cash flow from operations of EUR 14.4 million. However, these gains were partly offset by net interest and financial items of EUR 2.6 million, along with currency effects and other adjustments. In summary, strong operational cash flow supported the improvements in net interest-bearing debt this quarter. This is all from my side for now. Over to you, Daníel.

Thank you, Baldur, for this. Regarding our investments, substantial CapEx in prior years has built up a sustainable growth foundation throughout the value chain with the current investments focused on expansions and growth initiatives. In this quarter, our investments were EUR 5.9 million. They were mostly in farming equipment at sea, and the budgeted CapEx in 2025 is EUR 13 million. The volume guidance for the year is 14,000 tonnes, which is 31% more than in 2024. The volume is more in the second half of the year. We thank you for watching and look forward to see you at the next quarter's presentation. Thank you, and have a nice day.