Salmon Evolution Stock

Okay. Good morning, everyone. Thank you for joining Salmon Evolution's presentation for the second quarter. We are currently at a true inflection point where we are now transitioning from a period dominated by construction and investment towards now scale up and ultimately, cash flow generation with Phase 2 at Indre Harøy now in operation. And this is something we look forward to for a long time. And as I've said many times before, this will be a game changer for the company. In land-based salmon farming, you need scale. And by the end of this year, scale is exactly what we will have.

Also, while the salmon market has been challenging for some time and impacting our financial results, we are now seeing a more positive market outlook emerging, which is also very encouraging. Coupled with a substantial increase in production over the coming year, this is arguably the most interesting period in Salmon Evolution's history. So my name is Trond Håkon Schaug-Pettersen. I'm the CEO of the company. Together with our CFO, Trond Vadset Veibust, I will take you through this presentation.

So as normal, we will start this presentation by going through the highlights, then I will take you through the operations and our ongoing growth initiatives before our CFO will take us through the financials. And finally, we will end the presentation with a Q&A session. For those of you who are attending virtually, you can submit questions via the webcast.

And as mentioned, the company is at an inflection point where we, over the coming year, will fundamentally transform the scale of our business. Key to this is Phase 2, which is now in operation. The ramp-up is progressing according to plan. The fish is performing well, and we have completed the third Phase 2 smolt release now in July. The building project is also nearing completion, with the remaining eight tanks to be gradually handed over and taken into operation throughout this year and enabling a significant increase in production going into 2027.

In Phase 1, we are seeing continued progress from the new feed and updated operating protocols that we implemented earlier this year, particularly around water quality, translating into better growth. And although we expect the full effect still to be ahead of us, the recent development gives us increased confidence in the underlying production potential.

Clearly, the weak salmon prices impacted our financial results in the second quarter, where we saw revenues of NOK 67 million, a farming EBITDA of minus NOK 3 million and a group EBITDA of minus NOK 11 million. However, on the positive side, harvest volumes are up 50% year-to-date and also year-to-date farming EBITDA is up from minus NOK 8 million last year to plus NOK 15 million this year and also despite a challenging salmon market.

So I think to sum up, our production will increase significantly over the coming quarters, which in turn will reduce unit cost. Combined with a market looking increasingly attractive into next year, we believe that we are in a quite good position.

So moving over to the operations. In the second quarter, we harvested 945 tonnes gutted, with harvest taking place in May and early June. The superior grade share and tight weight distribution was in line with previous quarters, and harvest weight was up from 3.2 kilo gutted in Q1 to 3.5 kilo gutted in the second quarter. All-in price realization ended at NOK 70 per kilo, reflecting a fairly backloaded harvest profile and also weak salmon prices in the quarter.

We have updated our guidance for 2026 and expect to harvest approximately 6,000 tonnes this year compared to the previous guidance of 7,000 tonnes. The adjustment reflects lower-than-anticipated biomass production during the first part of the year. So while this impacts 2026 volumes, we continue to see positive operational development and remain confident in our production outlook and targets.

Operationally, the quarter marked another step forward. We continue to see stable operations across the farm, minimal mortality. Net biomass growth increased to 1,706 tonnes. This is up from 1,357 tonnes in Q1. We had good appetite across the farm in April. Production in May and early June was somewhat impacted by a sub-optimal fish logistic operation and longer-than-normal adaptation period for a new smolt group stocked in Phase 1.

But towards the second half of June and going into July, we saw good development across all groups. And we are seeing that the changes implemented earlier this year are beginning to deliver and that better water quality is providing a stronger biological foundation to take out the full potential of the system. And at the same time, Phase 2 continues to ramp up according to plan, although the contribution to biomass growth was limited during the quarter. But this will increase significantly over the coming months.

So I think the key takeaway is that the biological trends are moving in the right direction. We are building the foundation for higher harvest volumes, larger harvest weights and also improved unit economics.

And this slide is to highlight why we are increasingly confident in the operations and performance. Historically, we have delivered strong performance up to, say, 2.5 to 3 kilo. The challenge has been to maintain that growth momentum through the later part of the production cycle. The improvements implemented earlier this year, geared around feed and operating protocols, have had a positive effect on water quality, and we see that this also translates into a positive effect on growth.

And as you can see from the right-hand chart, the last two groups that we have harvested have had a significant better feeding in the last part of the production cycle compared to the previous two groups prior to implementing those changes. So while it's still early, the data is encouraging and supports our view that the biological potential of the system is improving. And going forward, I think it's all about building on that positive momentum.

And when it comes to Phase 2, the first months of operation have gone according to plan. We completed the third smolt release in July. All groups have adapted well with minimal mortality, good appetite and growth in line with expectations. Importantly, also, the technical upgrades that we have in Phase 2 are performing as intended with further improvements in water quality, which has been a key focus in Phase 2, and that means improvements in particles, gas levels, tank hydraulics and overall more capacities throughout the system.

And over the coming months, the contribution to biomass growth from Phase 2 will materially increase, and we are planning for two full-size smolt releases in the fourth quarter, meaning that for 2026 as a whole, we plan to stock around 2.8 million smolt, which is up 65% compared to last year.

So I would say in short, Phase 2 is delivering operationally. The ramp-up is on track, and we are now building the foundation for substantial production growth over the coming quarters. And delivering on the production ramp-up, that is the primary focus for us now, and we remain confident in achieving our mid-2027 run rate production target of 14,600 tonnes. And that means continued improvement in Phase 1 so that we, as a first step, get to 85% capacity utilization and also getting Phase 2 to full run rate production.

This will fundamentally transform the company. It will give us critical mass, also a fully competitive production cost and stable weekly harvest, which will, again, enable further initiatives on the commercial side.

So moving over to our growth initiatives. We believe that we are entering a very attractive phase for the company, where years of execution are now translating into clear and scalable growth. Our strategy is very clear and disciplined. It's now all about execution on the current operation, delivering Phase 2 and also ensuring that we have a compelling pipeline.

And Phase 3 at Indre Harøy is the natural next step that will double the capacity towards 36,000 tonnes. This is on one side, a platform and also with an organization that is already proven. And also, this is growth that leverage the existing infrastructure and experience that we have, reducing risk and boosting returns.

And important, as to Phase 2, we firmly believe that, that will set a new benchmark for land-based salmon farming. And as previously mentioned, things are looking very good. We have taken out 4 years of operating experience from Phase 1 and incorporated those learnings into Phase 2. And the improvements are especially centered around water quality, robustness and reliability.

We are introducing around 20% more fresh seawater. We are upgrading the degassing systems, better water hydraulics particle filtration on the water that we reuse. And these are targeted and experience-driven upgrades designed to support strong growth through the full production cycle.

And at the same time, we've also simplified the systems. We have further strengthened the biosecurity to ensure predictable operations at higher volumes. So I think the takeaway is clear. Phase 2 is now -- it's not just more volume, it's also better biology. It's lower risk. And together with Phase 1, we believe that we have a very solid operational platform.

And this is just to illustrate the strength and scale and long-term potential of Indre Harøy. Phase 1, as you know, we've been operating now for several years. We now have Phase 2 in operation that will eventually take production capacity to 18,000 tonnes, gutted. Additionally, Phase 3 is, in our view, a highly attractive project. It's building on the same proven site infrastructure and organization.

And beyond that, we also have a potential Phase 4 that represents meaningful long-term optionality. So I think to sum up, this is a very capable and unique platform. It offers significant volume growth in the near term. We have a very tangible medium-term expansion opportunities and also a long-term growth optionality.

And as to Phase 2, disciplined project execution and cost control have enabled Phase 2 milestone to be delivered in line with plan. We have now taken over 4 out of 12 grower tanks, with the remaining 8 tanks to be taken over during the course of this year. The project is nearing completion. That gives us good visibility on remaining CapEx and milestones.

The civil construction scope is largely completed. The project focus is now centered around process installation and final commissioning activities for the remaining tanks. As to the pre-grower tanks we are planning as part of Phase 2, we estimate total investments of around NOK 400 million, including contingencies. But before making any final investment decision, we will run a structured process with contractors with the aim of further reducing risk in cost estimates.

So with that, I'll leave the word over to you, Trond.

Thank you, Trond Håkon. Okay. So let me take you through the financials for the second quarter and the first half of 2026. After harvesting approximately 1,000 tonnes at an all-in realized price of NOK 70 per kilo, farming EBITDA ended at negative NOK 3 million in Q2, representing a substantial year-on-year improvement driven by lower farming costs.

Farming costs landed at NOK 71 per kilo in Q2, down from Q1, and a 13% year-on-year improvement. With increasing volumes in Phase 1 and scaling effects from Phase 2, driving fixed cost dilution, we expect gradually reducing farming costs in the second half of 2026. And I will go through the farming costs a little bit further in a minute.

The other segment reported an EBITDA of -- in line with Q1 and an improvement of approximately 35% year-on-year. As previously highlighted, we have implemented several measures to reduce cash burn and costs in this segment, resulting in meaningful cost reductions, including a reduction of five FTEs. Looking ahead, with the volumes set to more than double, this cost base will scale significantly and the relative cost burden of these activities will continue to decline. At group level, EBITDA was negative with NOK 11 million, representing a solid improvement compared to 2025.

Looking at the first half of 2026, harvest volumes was up 50% compared to 2025, farming costs down approximately 10% and farming EBITDA ended at about NOK 15 million or NOK 5.4 per kilo, an improvement of over NOK 10 per kilo compared to the same period last year, even in spite of a relatively challenging salmon market.

When it comes to farming costs, we are beginning to see the benefits of scale as Phase 2 ramps up, although these effects are not yet reflected in the financial results. As we have consistently communicated, our cost structure contains a higher proportion of fixed costs than a traditional farming operation. And as a result, attractive unit economics are primarily driven by utilization and the ability to scale production across a largely established cost base.

Over the past several years, we have built the organizational -- the operational platform required to support Phases 1 and 2 at Indre Harøy, effectively front-loading much of the infrastructure and organizational cost base needed for future growth. With substantial production growth underway, we see a material fixed cost dilution ahead. In other words, our underlying unit economics will improve significantly in the coming 6 to 12 months.

To dwell further on cost, a topic that has become increasingly important over the last few quarters, feed costs and the benefits of a low economic feed conversion in a tightening feed market. As you are all aware, feed accounts for approximately 50% of farming costs, making feed conversion the single most important driver of long-term competitiveness in the industry.

Our controlled land-based production system enable a level of feeding precision, monitoring and data collection that is difficult to replicate elsewhere and act as a natural hedge against feed cost inflation. Over the last few quarters, we have improved our economic feed conversion ratio by 5% to 6% and remain firmly on track for our 12-month target of 1.1. In fact, the latest group we harvested crossed this threshold.

Going forward, we expect to continue benefiting from the investments made in feeding technology, personnel training and artificial intelligence to maintain our already sharp economic feed factor going forward. In a market characterized by rising feed costs, every percentage point improvement creates meaningful value and represents a structural competitive advantage over time.

And then, finally, let's take a brief look at the balance sheet and cash flow. Most of our assets are related to the grow-out facility at Indre Harøy, biomass and other inventory and cash. The net interest-bearing debt decreased slightly compared to Q1, reflecting the cash injection from the private placement in April.

With the Phase 2 expansion project being close to completion, as highlighted, investments in the project are decreasing, and we have good visibility on remaining CapEx as -- and milestone as mentioned. Cash flow from operations reflects harvest timing and the ongoing Phase 2 ramp-up. Investments in the quarter are in all material respects tied to Phase 2 and cash flow from financing relates to the mentioned private placement as well as drawdowns on the construction financing.

Thank you. Trond Håkon, summary.

Thank you, Trond. So let me end where we started. The company is at a true inflection point. For years, our focus has been on building the platform, proving the technology and developing the operational capabilities needed to succeed at scale. Today, that foundation is in place. We have a proven operation. We have a capable team and the platform -- and platform that is now entering its next phase with Phase 2 now online and ramping up according to plan.

So I would say that the heavy lifting is largely behind us. What lies ahead is about unlocking the value of what we have built through higher production, stronger economics and ultimately also significant cash flow generation.

At the same time, we are seeing an encouraging biological development across the farm, which, in turn, increase our confidence in the production potential of our system. We also believe that the market backdrop is becoming increasingly supportive. After a prolonged period of pressure, the outlook for salmon prices is finally improving, I have to say, and we are uniquely positioned to benefit from that as our production growth now accelerates.

So I think the combination of improving operational performance, substantial volume growth ahead and a strengthening market outlook gives us confidence that the most exciting period in the company's history lies ahead of us.

So I think with that, I'd like to thank you all for your attention, and we're now happy to open up for questions.

We can start with the audience first and then move on to the webcast.

Herman Dahl, Nordea. Two questions from my side. Firstly, on the pre-grower tanks, could postponement of that investment also mean that it will take longer time to ramp up to 18,000 tonnes? And a second one on feed. Could you just comment briefly on the composition of your feed basket compared to sort of an average industry feed basket?

I think -- as to start with pre-grower tanks, so the 18,000 tonnes, there's a component of -- that relates to the pre-grower tanks. So obviously, that's sort of part of the 18,000 tonnes. So that, I think, goes without saying that we have -- on the pre-grower tanks, the design is basically completed, and it's about just getting started.

So we haven't made a final investment decision yet, but obviously, that's something we are working on. But also, we are now in a phase where, yes, the grower tanks are finished by the end of this year. That will also free up capacity.

As to the feed composition, I would say we have what I would say is a high-performance feed. I think there are unique features in terms of technical specifications, but also we have sort of prioritized high energy content and so forth. So we have a very close cooperation with our feed supplier and, obviously, are monitoring the situation closely as to the increasing feed prices.

Does that mean a higher inclusion of marine ingredients compared to an average basket?

We have prioritized the high marine inclusion.

Kristoffer Haugland, Arctic Securities. With the improvements you're seeing on the feeding protocols and water quality, do you expect to see average harvest weight of 4 kilos this year? Or is that a milestone for '27?

As soon as possible. So basically, we are stocking fish every second month. Now with Phase 2, we are stocking fish -- we will be stocking fish every month. So we have a certain window, and the harvest weight is basically just a function of the growth we are able to achieve within that window. So now, you saw the harvest weight was up from 3.2 to 3.5. And obviously, the ambition for us is to continue to lift those.

It's not a problem growing large fish. It's just being able to do that within the time you have sort of allocated. So that is what we're working for. I cannot give an exact date, I wish I could, but I think we are seeing positive things across the system, and it's all just building on that momentum and get there as soon as possible.

But 4 kilo gutted plus, that is definitely the target. We are also seeing that, as I think we mentioned many times before, we have a very tight weight distribution because we grade the fish during the sort of production process a couple of times.

So even at -- like in the second quarter where we had an average weight of 3.5 kilo, it's sort of very limited with small fish. And that is a big advantage. And if we are able to get the average to north of 4 kilo, then we basically don't have any fish below 3 kilo. Then it's 4-plus, that's the main category, and then we have some 3 to 4.

Anyone else? Or should we move to the questions submitted via the webcast? Okay. Let's do that. All right. First and foremost -- okay. What specific biological and operational milestones do you need to demonstrate over the next 6 to 12 months to be comfortable that Phase 1 and 2 can collectively deliver around 18,000 tonnes HOG? And based on what you're seeing today, do you believe you are on track for this?

All right. As we highlighted in the presentation, we have a clear plan to reach our mid-'27 run rate production target of about 14,500 tonnes gutted salmon. In Phase 1, reaching our next 12 months target encompass a quarter-over-quarter improvement of approximately 4% from the run rate we have today.

And for Phase 2, it's all about maintaining the momentum we have seen since inception of operations about 5 months ago and, of course, to become a little bit better every day. And as Trond Håkon also highlighted, delivering on the production ramp-up is the current main focus and priority of the company. So from our perspective, we are definitely on track to reach the targets we have set for the next 6 to 12 months.

Okay. Phase 2 incorporates a lot of operational experience from Phase 1, which upgrades do you believe the most in? Trond Håkon?

I think, as we have alluded to in the presentation, it's -- water quality has been a core focus in Phase 2, further improving that compared to Phase 1. And that is sort of the foundation for being able to taking out the full potential of the fish and also maintaining a good biological performance of the fish. And by water quality, we mean particles, gas levels, the flow of water, et cetera. So that is, in our view, very important.

Okay. How should investors think about the impact of Phase 2 on fixed cost dilution over the next 12 months? As we also highlighted in the presentation, with Phase 2 gradually coming online and improving performance in Phase 1, we are beginning to see the scaling effects, although it's not yet reflected in our financial results.

As we have elaborated, our cost structure contains a high proportion of fixed costs, and it goes without saying that with a high proportion of fixed costs and higher volumes, you get a very meaningful fixed cost dilution, and this translates into improved unit economics.

And as we have also highlighted, we have -- over the last few years, we have built the operational platform needed to support Phases 1 and 2. So we have effectively front-loaded much of the cost base required to -- for future growth.

So with substantial production growth expected over the next 12 months, we will see -- we will have a material fixed cost dilution, and we will see significantly improved unit economics in the coming periods.

Okay. Okay. How many of the tanks in Phase 2 are in operation? And could you just give a little flavor on kind of the operational experience so far?

We have taken over four tanks in Phase 2. Currently, we have fish in three of them, but we are going to split one of the groups in not too long. So then we will have fish in all four of them. And then we are now taking over the last eight tanks over the course of this year. And we're also planning, as mentioned earlier, to stop -- to have two full-size smolt releases in the fourth quarter, which means that by going into next year, we will stock fish every month going forward and have a very continuous production.

So I think, as I mentioned, the ramp-up in Phase 2 has gone according to plan. We are seeing that the upgrades implemented have had the effects that was intended. We are seeing good water quality. The fish has adapted very well to the environment. Feeding system is working. So we're very happy with what we have seen so far and looking forward to fill up the facility.

Okay. What is your take on the salmon market?

Yes. No, I think we included -- we also -- I think we're a little bit surprised about the market this year. We expected it to be stronger. But I think what you are seeing now with the market is that demand is actually very good. Demand growth is significant. But obviously, you've had a period with very high supply growth, and then it's sort of hard to sort of being able to increase prices in that kind of scenario.

But the good thing about the salmon is that it is very limited storage. If you build cars and don't sell it, it goes to inventory. The salmon is sold and consumed. So low prices, high volume means that you're building market.

And when volume growth eventually comes down, which, I think, it's just a matter of time before it will because we are now, I would say, the production in conventional farming has been very strong and the license capacity has not been increased, so it's hard to sort of maintain this kind of growth from the high base that we are at now.

So we are increasingly confident in the market outlook and I think that after a period now of a couple of years with a challenging market, 2027 looks very, very interesting.

All right. And then, finally, a question on Phase 3. I think on that, we can say that Salmon Evolution is laser-focused on delivering Phase 2 and the milestones we've set. So that's kind of priority number one, two and three in the company. When it comes to Phase 3, we have the land, we have the license, and we have the electricity we need to realize that project when it's time. But for now, our focus is Phase 2 and delivering on the milestones we've set.

And I think that concludes today. Thank you for your attendance. We will release a trading update in early October. And then we have the Q3 quarterly presentation in the end of October. See you then. Thank you for coming.

Thank you.

Okay. Good morning, everyone, and thank you all for joining this presentation of Salmon Evolution's results for the first quarter. A lot has happened since we had our fourth quarter presentation in February, and Salmon Evolution is now truly at an inflection point where we are transitioning from a period dominated by construction and investment towards now scale up and cash flow generation with Phase 2 now in operation. And this is something we look forward to for a very long time. And today, I want to thank all our dedicated employees and partners for making this happen.

The picture behind me here and also the video you just saw is from our first smolt release in Phase 2 a couple of weeks ago, marking also a new chapter for the company and the beginning of a significant ramp-up in production. I've said it many times before, but it's worth saying again, Phase 2 will be a real game changer for the company. It will give us an unprecedented platform in this industry, both in terms of scale, earnings and also future growth capacity.

So my name is Trond Håkon Schaug-Pettersen. I'm the CEO of the company. Together with our CFO, Trond Vadset Veibust, I will take you through this presentation. So we will start this presentation by going through the highlights, then I will take you through the operations and our growth initiatives before our CFO will go through the financials. And then we will end the presentation with some -- with a Q&A session. For those of you who are attending virtually, you can submit questions via the webcast.

So as to the highlights, and as I mentioned, the company is at a true inflection point where we are moving from construction into now execution scale-up and value creation. The most important milestone, obviously, is that Phase 2 is now in operation. We have successfully completed the first smolt release. Everything is progressing according to plan. And this is a starting point for a material ramp-up in production over the coming quarters.

Operationally, we have also seen a step change in growth in Phase 1 following the implementation of both a new feed and also updated operating protocols during the first quarter. And that also gives us increased confidence in reaching our stated operational targets. Financially, the first quarter shows that we have a strong and sound operating platform. We delivered revenues of NOK 152 million, a farming EBITDA of NOK 17.6 million and a group EBITDA of NOK 9.5 million and this is also despite somewhat softer-than-expected salmon prices during the quarter and also biomass growth being temporarily impacted by the implemented changes in both feed and operating protocols.

Just as important, we also strengthened our balance sheet following the refinancing and private placement completed a couple of weeks ago. We have a solid capital structure in place with increased long-term bank facilities and fresh equity to deliver Phase 2 in a responsible manner. So to sum up, the platform is working, Phase 2 is now finally live, scale-up is underway and we are now very well positioned to translate growth into earnings and cash flow.

So moving over to the operations. This is a major milestone for the company. We have initiated operations in Phase 2 after taking over the first 2 production tanks from our contractors. As previously communicated, we completed the first smolt release in week 18. I'm pleased to say that the smolt has adopted well. Feeding commenced quickly after release. Key operating or key operational parameters are stable and also in line with expectations. And this is exactly what we want to see at this stage, predictable start-up, good biology and also tight operational control. And Phase 2 is an improved copy of Phase 1. And I have to say, although it's still early, things are looking very good and we very much look forward to see the development here going forward.

Looking ahead, we plan to have a second smolt rise in Phase 2 in just a couple of weeks. And for the year as a whole, we plan to stock around 2.8 million smolt at Indre Harøy in 2026, including Phase 2 and that's approximately 60% as compared to last year. And obviously, this underpins a stepwise ramp-up in biomass and production over the coming quarters and it also clearly illustrates that Phase 2 is now nearing completion and setting the stage for substantial volume growth going forward.

And this slide is very important because it explains why we are seeing a step change in growth in Phase 1 and also even more importantly, why we are confident that this is sustainable. After 4 years of operations and 16 completed production cycles, we now have a very deep data set and that gives us the ability to fine-tune operations in a way that you simply cannot do early in a project.

During the first quarter, we implemented a new feed and also had some updated operating protocols with a particular focus on the degassing system and also the water hydraulics. As expected, there was a short implementation and adoption period where feeding levels were temporarily reduced. But the key point is that once these new protocols were fully implemented, we saw an immediate and clear improvement in feeding across all tanks.

Over the last 6 months, we've also carried out the largest recalibration of our feed to date, leveraging data-driven growth models. And these improvements are expected to lift growth by approximately 4%, all else equal, but at the same time, improving water quality. And you can see that clearly reflected in the chart after the implementation period, we saw a step change in feeding relative to our daily targets. And we are now well on schedule to reaching our 85% utilization target by mid-next year.

And the key takeaway here is important. We believe this is not a one-off effect. These are structural improvements driven by better biology, better water quality and an even tighter operational control. And as part of the feed recalibration, we also implemented a new binder in the feed towards the end of February. And the effect here was also immediate and measurable. You can see that clearly here, we achieved a 50% reduction in particles and also further improvement in turbidity levels, which were already within good ranges before the change.

Lower particle levels and improved turbidity, they are not cosmetic metrics. They matter because they allow for improved tank hydraulics, better water flow and also better degassing efficiency and thus creating an overall better environment for the fish. And that feeds directly into what we care about. It's about feeding better growth and stable biology.

And also importantly, these are objective third-party measurable parameters. This is not subjective observations. And hence, this gives us strong confidence that the growth improvements we are seeing are structural and not temporary. And we also believe that we have not seen the full effect of this yet, which means that we have a very good starting point for further performance uplift as we move through 2026.

Biomass growth during the first half of the quarter was deliberately impacted by the implementation of new feed and the changes to the operating protocols. This was a conscious and controlled choice to enable better performance going forward. As such, net biomass growth ended at 1,357 tonnes live weight, while the underlying growth was almost 1,500 tonnes with the difference between -- explained by harvest deviations. Simply, when you are harvesting the fish, there was a little bit less than you expected. To mitigate that going forward, we also changed our feed factor model during the quarter. So hopefully, this is not an issue going forward.

Overall, operations remained stable throughout the quarter with continued low mortality and good biological control across the farm. The reduction in standing biomass towards quarter end that reflects normal fluctuations and also a harvest profile that was tilted towards March. I think what really matters now is that the key prerequisites for improved biomass growth are in place. With even better water quality, improved feeding, we expect this to translate into higher growth, higher volumes and increasing harvest weights as we move through 2026. So to sum up, the first quarter was about laying the groundwork and we firmly believe that the benefits of this is ahead of us.

Turning to harvest. We delivered a record high harvest volume of 1,765 tonnes gutted in the first quarter, in line with guidance. And as I mentioned, a lot of the harvest taking place in March, approximately 50%. Average harvest weight was 3.2 kilo gutted. This is also fairly stable versus the last quarter. When it comes to price realization, that was approximately NOK 84 per kilo despite a volatile market environment during the quarter.

I think it's fair to say that the salmon market has been somewhat softer than expected going into 2026 to a large extent driven by continued high supply growth, but the tide is turning now, and we are seeing the supply growth coming down, both in Norway and in Chile. So thus, we believe that this creates a more favorable backdrop going forward.

From a quality perspective, performance remains very strong. We achieved a 94% superior grade share. That is also fully in line with historical levels and also a clear indicator of stable biology and good operational control. Looking ahead, we expect harvest rates to improve through 2026 as Phase 1 utilization moves towards 85%. That corresponds to a harvest rate of 4 kilo gutted plus which will have a meaningful positive impact on both the cost per kilo and also margins. And at those rates, we also see a very solid weight distribution, typically around 70% of the volumes will fall in the 4 to 6 kilo gutted category, which is also a premium segment in most markets.

And as to Indre Harøy, we have a very clear and credible road map for substantial production growth going forward. By mid-2027, we target to reach 85% capacity utilization of Phase 1, while at the same time, ramping up production in Phase 2, giving us a production capacity of 14,000 to 15,000 tonnes gutted. Then we are going to implement the 3 grow-out tanks as well as solving the remaining bottlenecks in Phase 1 and taking that production to 18,000 tonnes. And this is not grow far into the future. Phase 2 is now already taken into operation. And as I mentioned previously, we will stock a significant number of fish this year, 60% more than last year. So to sum up, disciplined stepwise growth on what we would say is a proven platform.

So a few words on our growth initiatives. As a company, we are entering a very attractive phase where years of execution are now translating into clear and scalable growth and growth opportunities. Our strategy is focused and we are also very disciplined. It's all about strong operation -- execution on the current operations, delivering Phase 2 and also making sure that we have a compelling pipeline for the future.

And Phase 3 is a natural next step, doubling the capacity to 36,000 tonnes on a site, a platform and also an organization that is already proven. And this is growth that also leverage the existing infrastructure and experience that we built up now over several years and also reducing the risk and enhancing the returns. And as to Phase 2, we are very confident that this will set a new benchmark for land-based salmon farming. And as I mentioned previously, things are looking very good. We've only been operating it for a couple of weeks, but it has been very good so far, and we strongly believe that, that will continue.

We have taken -- in Phase 2, we have taken 4 years of operating experience from Phase 1 and incorporated those learnings into Phase 2 and especially around water quality, robustness and reliability. We are introducing up to 20% more seawater. We are upgrading the degassing system, improving the water hydraulics. We are adding particle filtration for the water that we reuse. And in some, these are targeted experience-driven upgrades designed to support strong growth throughout the full production cycle. And at the same time, we also simplified the systems. We strengthened the biosecurity to ensure predictable operations at higher volumes.

So to sum up, Phase 2 is it's not just more volume, it's also better biology. It's lower risk. And together with Phase 1, we firmly believe that this represents a rock-solid operational platform.

So you've seen this many times before, but this illustration highlights the strength and scale and long-term potential of our Indre Harøy platform. Phase 1 has been operating for several years successfully and now have started production in Phase 2. That takes the production capacity when everything is finished to 18,000 tonnes. Additionally, Phase 3, that's a highly attractive project. It is building on the same site, the same infrastructure, the same organization. And beyond that, we have a potential Phase 4 that also represent meaningful long-term optionality. While it is still conceptual, it provides upside that can be unlocked over time.

So to sum up, Indre Harøy is a unique platform. It offers significant volume growth in the near term, very tangible medium-term expansion opportunities and also long-term growth optionality, all in one proven operation.

And as to Phase 2, this slide is to underscore that we are very focused now on project execution and control, finishing Phase 2. The project is progressing according to plan. Nevertheless, the budget is tight, and we have chosen to add a 5% additional contingency buffer to be on the safe side as previously disclosed. But at the same time, we now only have approximately 7 months left. The project is approximately 80% completed and that gives us very good visibility on both remaining CapEx and also milestones. The civil construction work here is largely completed and the project focus now is on process installation and final commissioning activities.

So our focus remains unchanged. We continuously have a high focus on effective project execution to minimize delays, change orders and also ensuring good coordination between all disciplines. For the pre-grow-out tanks, we estimate total investments of around NOK 400 million, including contingencies. Before we are making the final investment decision, we are running a structured process with the aim of further reducing the risk in the estimate. So to sum up, Phase 2 is on plan. We have very good visibility now, and we are also quickly approaching the finish line.

Then I think I'll leave the word over to you, Trond.

Thank you. All right. Starting with the Farming segment, which comprise most of our activity. In Q1, we harvested 1,765 tonnes, a new all-time high with an all-in price realization of around NOK 84 per kilo, up 12% year-on-year, but admittingly somewhat weaker than what we expected when entering 2026. Looking at costs, our farming EBITDA cost ended at NOK 72.6 million, in line with last quarter. The farming EBITDA was NOK 17.6 million, underlining that we have a profitable operational platform in Phase 1, even in lieu of somewhat weaker prices than expected.

The other segment EBITDA was negative with NOK 8.2 million, an improvement of approximately 20% year-on-year. As previously highlighted, following our strategic refocus on Norway, we have taken several steps to minimize cash burn on growth projects, resulting in significant spend reduction as well as a reduction of 5 FTEs, reinforcing tighter capital and cost discipline in the company.

Importantly, this part of our cost base will scale significantly once Phase 2 is fully operational with harvest volumes set to more than double. At group level, EBITDA was NOK 9.4 million. And overall, Q1 marks a solid improvement compared to 2025 and financial performance is moving in the right direction with costs trending down on back of increased biomass production through 2026.

To further dive into farming costs, this slide explains the bridge between gross costs and the reported farming EBITDA cost in Q1. The way Salmon Evolution report their farming EBITDA cost net of export costs is an at gate in box equivalent, including allocated G&A. As salmon is largely sold DDP, export and distribution costs are included in the sales price and are effectively recovered through revenues. Hence, the reported all-in price will also be lower than actual revenues per kilo.

Another important point is that costs have been front-loaded in Phase 1 as we, over the last 4 years, have built the team and shared operational infrastructure that will serve both phases. With Phase 2 operational, we will start harvesting these scaling effects. As an example of this, in full run rate personnel in Phases 1 and 2 is only about 30% higher than Phase 1 stand-alone with double the volumes. This is just one of many cost efficiency gains with Phase 2 operational. We have calculated these effects to approximately 5% to 6% on the full run rate costs, but that is probably a conservative estimate.

Another important point is how the cost base scales with increased biomass production. As previously highlighted, outside feed and harvest, costs remain largely fixed at the facility. In Phase 1, the fixed portion amounts to roughly NOK 200 million and a 5% increase in biomass production equals roughly NOK 2 to NOK 3 in reduced costs per kilo, all else equal. The key takeaway is that with Phase 2 operational and increasing biomass production, this will result in a meaningful reduction in unit costs through 2026 and into 2027. By mid-2027, we target a farming cost in the low-60s with our target farming EBITDA cost being NOK 53 per kilo in full run rate. In other words, Q1 costs are representative of where we are today, not where we are heading.

Following the equity raise in April, the previously announced refinancing was also completed. Together, these provide a solid capital structure to deliver Phase 2. We are very satisfied with the successful equity raise. We received strong support from existing shareholders and have added several new long-term high-quality investors. In parallel with the private placement, we also did a retail offering, which attracted massive interest and was oversubscribed multiple times. I would like to thank all existing and new shareholders for the vote of confidence.

The refinancing was completed with strong support from our existing banking syndicate, Nordea, DNB, SpareBank, Norge and Axim. We have extended and upsized the senior secured facilities linked to Indre Harøy by 10% to approximately NOK 2.5 billion with a 3-year tenure and extension option. The fact that this was done with strong backing from our banking partners is an important validation of both the quality of our asset base and the business case.

Additionally, the permitted working capital financing has been increased from NOK 300 million to NOK 400 million, fully covering Phases 1 and 2. Following the transaction and completed refinancing, funding is secured and the covenant headroom is improved, securing a solid financial platform for Salmon Evolution going forward.

Let us take a brief look at the balance sheet and cash flow. As previously highlighted by Trond Håkon, the grow-out section is progressing according to plan, but the budget is tight, and we have chosen to add an additional contingency buffer in light of this. However, we also only have about 7 months left in the project with a completion rate of about 80%, giving us good visibility on remaining CapEx and milestone. The capital spending will also decrease significantly in coming quarters.

Cash flow from operations was negative in the quarter, primarily reflecting that about 50% of harvest took place in March with an ensuing trade receivables buildup. In the Q1 accounts, as you have probably noticed, all the long-term debt is classified as current due to the maturity of the loans being less than 12 months. However, as mentioned, the refinancing was completed in April and thus, all the long-term debt is back to noncurrent from next quarter.

And I think to sum it up, I think this illustration captures exactly what Phase 1 and 2 represents for Salmon Evolution. A highly scalable platform with strong earnings and cash flow potential. We now have an operation -- operational foundation where the heavy lifting is done with core infrastructure in place to support 18,000 tonnes. And we already hold land and licenses required to double this yet again. This place us in a truly unique position.

The strong support we have in the capital markets and from the world's leading seafood banks was highlighted in the significantly oversubscribed capital raise last week as well as the upsized loan package. The bottom line being the business has been derisked. The foundation has been built and now we are positioned to harvest the returns.

Thank you. Trond Håkon, closing remarks.

Thank you, Trond. So to sum up, I think Salmon Evolution is at a very good spot at the moment. We have a proven platform. As we said, they heavy lifting now is largely done and with Phase 2 also now in operation, we are entering a new phase for the company away from just CapEx and investments to now scale earnings and cash flow. And Phase 2, it is a game changer for the company. It significantly increases our capacity. It will strengthen our margins and also position ourselves to capitalize on what we believe is a good salmon market eventually.

So we are also very pleased with having secured our refinancing and the equity issue. As Trond mentioned, this gives us a strong financial platform as we now entering this very exciting phase. So it's all about execution and converting also the operational progress that we are seeing into long-term value creation.

So with that, I think I would like to thank you all for your attention and we are now happy to open up for questions.

Pareto, Henrik has the microphone. So just raise your hand and feel free.

Henrik Knutsen, Pareto Securities. Your volume guidance for 2026 at 7,000 tonnes, what's the status? And could you also elaborate on how much you expect to harvest in Q2?

Sure. As for the full year guidance, we refer to the information we have previously shared. I apologize for not including this in the Q1 report. When it comes to quarterly guidance, we are not issuing quarterly guidance. We have stopped doing that.

Christian Nordby, Arctic Securities. As you're now stocking more smolts in Phase 2, you will build up a lot more biomass during the year. And then you will allocate costs to that biomass. How do you think the farming EBITDA costs will develop during 2026 due to that happening?

On costs, as we mentioned, we expect continued productivity improvements in Phase 1. And as well, we are -- we will also ramp up Phase 2 during the year. So our expectation is gradually declining cost through 2026. And as mentioned, we target a farming EBITDA cost by the middle of 2027 in the kind of the low-60s. So heading to that point in time, we expect the costs to gradually decline towards that target.

Anyone else in the audience? If not, we have received some questions via the webcast. Okay. Then we just take the webcast questions. I start with guidance on sales and EBITDA. We do not issue guidance on sales and EBITDA. So I think that answers that one. You have mentioned that you think the effect of the feed calibration is ahead of you. Could you elaborate a little more on that? Trond Håkon?

It's simply because it will -- it takes some time. As for the feed, I would say it's -- the changes are twofold. One is sort of a change in the nutritional components of the feed or the formulation. The other thing is that we also changed the binder, which have had a very positive impact on the fish's quality and thus also the water quality. And I think those changes are -- you don't see them immediately. Those are changes that -- as you sort of move through the biomass and the fish have been sort of used to this new improved environment over a longer period of time, those sort of effects will materialize. So we believe that there are -- we have not taken out the full effect of this yet.

All right. Another question. How has initiation of operations in Phase 2 been? And how are the initial results?

Yes. And as I alluded to in the presentation, the first smolt release has gone very well, basically according to plan. The fish has also adapted very well in the tanks. It quickly commenced feeding. It has shown a good appetite. And I think also very importantly, and as we went through in the presentation, Phase 2 is an improved copy of Phase 1. We have taken all the experiences now over 4 years, incorporated those into Phase 2. And obviously, for us, it's very interesting to see how these changes and improvements are sort of working out in real life.

And I think it's fair to say that things are looking very good. We are very happy with what we are seeing and really think that what we have done is, yes, having the effects that we sought for. So we very much look forward now to follow the fish and going forward. And also as mentioned, we are stocking a new group in just a couple of weeks. So very interesting times now to see how all these improvements in Phase 2 are playing out. But we are very optimistic. And I think so far, it's very promising. It's as the operations team said, we have hit the nail.

That concludes the questions. Thank you for your attendance and see you next time in -- yes, next update from us in early July and the Q2 presentation in August. Thank you.

Okay. Good morning, everyone, and thank you all for joining this presentation of Salmon Evolution's results for the fourth quarter. Salmon Evolution is currently at a pivotal inflection point where we are now transitioning from a period dominated by construction and investments towards now commissioning, scale-up and cash flow generation with Phase 2 at Indre Haroy quickly approaching first production. This is something we have looked forward to for a long time. And today, I want to thank all our dedicated and hard-working employees and partners for making this happen. And as you can see from the picture here, the scale of what we are doing is quite remarkable. This is next-generation salmon farming at an industrial scale, and we truly believe that what we have built here is something that's going to have a profound impact on the salmon farming industry in the years and decades to come. So my name is Trond Hakon Schaug-Pettersen. I'm the CEO of the company, together with our CFO, Trond Vadset Veibust, I will take you through this presentation.

Just a short recap of where we are. Salmon Evolution is the global frontrunner in land-based salmon farming, and we are already operating and delivering at scale. We have a proven platform. After several years of production, we've demonstrated stable biology, high quality and also repeatable performance. That matters because we're not just scaling an ID, we are scaling something that already works. We are also in the right place.

Our location at Indre Haroy gives us structural advantages across competence, suppliers, logistics and costs, and these are advantages that will further strengthen as now volume increase. And now we are entering the value creation phase with Phase 2 coming online. Capacity moves towards 18,000 tonnes. And that is fundamentally shifting the earnings profile of the company. This is where fixed costs are absorbed, margins expand and cash generation also accelerate. So to put simply, the platform is built, the risk is reduced, and scale is also now coming.

So as normal, we will start this presentation by going through the highlights, then I will go through the operations and our ongoing growth initiatives before our CFO will take us through the financials. And finally, we'll end the presentation with some comments on outlook and a Q&A session. For those of you who are attending virtually, you can submit questions via the webcast.

As mentioned, as a company, we are moving towards a clear inflection point, where we go from build out towards execution and value creation. Phase 2 is progressing according to plan with the first smolt release planned for week 17. For 2026, we are preparing for a step-change in scale. We will stock around 2.8 million smolt, which is up 65% year-on-year and also underpinning a materially higher production trajectory and setting the foundation for increasing volumes and earnings.

Importantly, we also enter this growth phase from a position of operational strength. The farm goes into 2026 with a solid biological foundation, giving us confidence that we -- in our ability to scale efficiently and also to consistently improve performance as now volumes ramp up. Financially, Q4 also sends an important signal. Farming operations were effectively breakeven on EBITDA, even with some Phase 2 ramp-up costs and also despite quite low prices during the quarter. And I think that clearly demonstrates the operating leverage in our business model.

Finally, we're also disciplined on capital. The updated partnership model in Korea ensures that capital and management focus are firmly concentrated on Indre Haroy, where we see the highest, most near-term returns. So takeaway is simple from our perspective. The platform is working. Scale is now underway, and the salmon market is about to recover, and we are positioned to translate the growth into earnings as we move through 2026.

So moving over to the operations. Q4 harvest volumes reflect a deliberate strategic choice. We harvested around 1,200 tonnes gutted and prioritized biomass build up to enter 2026 with a fully stocked farm. As a result, we ended 2025 with a standing biomass above target and expect now to harvest around 1,800 tonnes gutted in Q1, also giving us a very solid start to the year. Price realization in Q4 was NOK 74 per kilo reflecting softer market conditions early in the quarter and also the fact that we didn't harvest in December.

During Q4, we also sold a batch of smolt to a conventional farmer as we have maintained some overcapacity on smolt over the last year. So to sum up with a fully stocked farm and basically full exposure to the spot market, we are well positioned as the salmon market is expected to tighten going forward. Looking at net biomass growth in Q4, this ended at about 1,600 tonnes, was impacted by a high level of logistics activity as we optimize the farm for the year ahead. But I think importantly, the underlying growth trends remained consistent with previous quarters.

The standing biomass ended at around 3,100 tonnes and we have now maintained a fully stocked farm over 4 consecutive quarters. And this is key for continuing to improve performance and also get the operating cost down. At the same time, we continue to execute on various operational improvements that are expected to gradually lift the growth performance. Here, we have several initiatives ongoing, which we very much look forward to see the results from over the coming quarters. So I think to sum up, we have a strong biological foundation and now it's all about taking out the full potential.

And I think as to the full potential, this is a good illustration of how we will do that. What we clearly see is that growth performance is good. I would say, very good up to 2.5 to around 3 kilo, even at high densities, while the growth curve flattens out in the final stage. Producing large fish, it's not a problem from our perspective. For example, in the fourth quarter, we harvested a batch of around 200 tonnes at an average weight of 5 kilo gutted, but where the fish stayed a little longer in the tanks. So the issue goes to maintaining the desired productivity throughout the full cycle so that you're able to reach the target weight within the time that the production plan allows for. And key to this is water quality. Through 4 years of operations, we have identified specific bottlenecks around particles, gases and flow.

But the important point is that these are known and addressable issues that we are already acting on. This includes, for example, a new and improved feed composition, which is expected to improve water quality that we have already incorporated. It also includes improvements in the way we treat and manage the sort of water recirculation.

And finally, it's also increasing -- includes increasingly using data and AI to replicate what works tank by tank and also cycle by cycle. But importantly, all these learnings are already embedded in Phase 2, and we see also a clear potential for similar Phase 1 upgrades in a very cost-efficient manner. So to sum up, we see tangible upside in growth, harvest weights and cost efficiency driven by execution, experience and also data as we now move into the scale-up phase.

And Phase 2 is about quality as much as scale. We've taken 4 years of operations of experience from Phase 1 and incorporate those learnings into Phase 2, especially around water quality, robustness and reliability. We are now introducing more seawater, actually up to 20% more. We are upgrading the degassing systems and the water hydraulics and we're also adding particle filtration on the water that we are reusing. And these are targeted experience-driven upgrades designed to support strong growth throughout the full production cycle. And at the same time, we have also simplified the systems. We have strengthened biosecurity to ensure predictable production at higher volumes. And importantly, also, this is capital efficient improvements. Phase 2 is designed to deliver higher quality capacity from day 1. And it also gives us a very clear road map for potentially cost-efficient upgrades in Phase 1. So I think the key takeaway is clear. Phase 2 is not just about volume. It's also better biology, lower risk and better margins as we now scale the operation.

As a company, we have a very clear and credible road map for substantial production growth at Indre Haroy. Over the next 18 months, we target to reach 85% capacity utilization of Phase 1 while we, at the same time, are ramping up Phase 2 operations which will give us a run rate production of 14,000 to 15,000 tonnes gutted. Then we are going to implement the pre-grower tanks as well as solving the remaining bottlenecks in Phase 1, which will give us a run rate production of 18,000 tonnes gutted by year-end 2027. And this is not growth far into the future. We are commencing operations in Phase 2 just over Easter. And for 2026 alone, as I mentioned, we will stock around 2.8 million smolt, which is a massive increase from last year. So in some disciplined and stepwise growth on a proven platform.

So a little bit about our growth initiatives. I think we are entering now a very attractive phase for Salmon Evolution, where years of execution and experience are translating into a clear and scalable growth. Our strategy is focused and disciplined. It's all about execution on the current operations, deliver Phase 2 and also build a compelling pipeline. And Phase 3 at Indre Haroy is a natural next step, doubling capacity to 36,000 tonnes on a site platform and organization that already works. And this is growth that leverages the existing infrastructure and experience that we have, also reducing risk and enhancing returns.

And I think this is a good illustration of sort of the strength and scale and long-term potential of our platform at Indre Haroy. Phase 1, as we've been through has been operating successfully for several years, but Phase 2 is now very soon about to enter first production, then bringing the capacity to 18,000 tonnes. And obviously, Phase 3 here, a highly attractive project, building on the same proven site infrastructure and also the organization.

Beyond that, we have a potential Phase 4, which represent also a meaningful long-term optionality. While this is still conceptual, it provides additional upside that can be unlocked over time in line with market conditions permitting and so on. So I think to sum up, Indre Haroy is a unique platform that offers significant volume growth in the near term, very tangible, medium-term expansion opportunities and also long-term growth optionality, all anchored in a proven platform.

And when it comes to Phase 2, this is progressing according to plan. We are now well underway with testing and commissioning, marking a clear transition from construction towards operations. The major civil works are largely complete and our focus now is firmly on process installation and operational readiness. Importantly, we have reached this stage without any lost time injuries, which reflects strong execution, discipline and also a continued focus on safety across the project.

We remain on schedule for the first smolt release in week 17, and all activities on the site are aligned around this milestone. In parallel, we have also completed planning and engineering for the pre-grow-out tanks where we target to make an investment decision during the first half of this year.

So sum up. Phase 2 is on track. Project risk is now coming down, and we are moving from build-out to execution. And I think this is a key step in shifting the company towards scale and earnings.

And these pictures captures a major milestone at Indre Haroy in Phase 2. We have now successfully filled water in the first 2 production tanks, which is a critical step in the commissioning process. This confirms that the core systems, the water intake, water management and treatment and are performing as designed. And these tanks are now soon ready for the first smolt release. After which, we will gradually take the remaining Phase 2 tanks into operation throughout 2026. And reaching this stage is a significant and strong validation of the work done by our organization and our partners over several years, turning a large scale, complex build-out into a functioning production platform.

I also would like to briefly address the updated partnership model in Korea that we announced earlier this quarter. This is an important strategic clarification. The key message is that this update reinforces Indre Haroy as our foremost priority in the near to medium term. Our capital and management tension and execution focus are firmly concentrated on Indre Haroy and maximizing the output and delivering Phase 2 according to plan and also preparing for the next steps at Indre Haroy. The revised structure also reflects a disciplined approach to capital allocation. Salmon Evolution will provide technical advisory services on market terms with also the potential for quite substantial royalty payments linked to certain operational milestones. But also importantly, we will remain a minority shareholder but with no further investment commitments while we also retain a 5-year purchase option to increase ownership should we desire to do so. And I think this is a good example of how we're able to leverage the significant competence and experience that we have built up over many years without diverting capital or focus away from the core operation in Norway.

So Trond, will you take us through the financials?

Thank you. All right. Starting with the Farming segment, which comprise most of our activity. In the fourth quarter, we harvested about 1,200 tonnes in addition to the sale of smolt group due to temporary overcapacity. As Trond Hakon has elaborated earlier, retaining overcapacity on smolt through 2025 was part of our deliberate strategy.

As you are all aware, salmon prices through 2025 have been weak. And we are fully exposed to this as we sell our salmon exclusively in the spot market. The impact of lower salmon prices are clearly reflected in our financial results, both for the quarter and the year.

In Q4, as Trond Hakon mentioned, our harvest took place in October and November, meaning that we lost out on most of the price recovery towards the end of the year. Overall, we ended at an all-in price realization of NOK 74 per kilo in the quarter and about NOK 70 for the year. Looking at costs. Our farming EBITDA cost ended at NOK 73 per kilo in Q4 and NOK 77 for the year. Q4 reflects the capacity utilization in the second half of 2025. Considering that initiation of Phase 2 operations is commencing soon, we have some ramp-up costs related to this. Net of these ramp-up costs, farming operations were breakeven in the fourth quarter. For 2025, we ended with a negative EBITDA of NOK 39 million, reflecting the mentioned weak salmon prices through the year.

For the other segment, which comprise headquarter and expansion costs fully aligned with our growth strategy, we had a negative EBITDA of NOK 7 million in the quarter and NOK 39 million for the year. Through 2025, we have taken steps to minimize cash burn on expansion projects as well as retaining our relentless cost focus through the year.

Importantly, this part of our cost base scales significantly once Phase 2 is fully operational with harvest volumes set to more than double. And to underline and illustrate this, it is worth mentioning that we are initiating operations at Indre Haroy Phase 2 without increasing the administrative headcount. The increase in personnel is exclusively linked to farming operations.

At group level, EBITDA was negative with NOK 8 million in Q4 and about NOK 80 million for the year. The difference between farming operation and the group results is the mentioned headquarter and expansion-related costs. Overall, we are not satisfied with the financial results in 2025. However, as we move into 2026 with higher harvest volumes, higher salmon prices and continued operational improvements, we expect a significant step-up in financial performance. All the fundamentals are moving in the right direction and we are well positioned to translate operational progress into earnings and cash flow going forward.

This illustration shows the bridge from gross costs to the farming EBITDA cost of NOK 73 for the quarter and NOK 77 for the year. As mentioned, the farming EBITDA cost in Q4 reflects the capacity utilization in Phase 1 during the second half of 2025. Included in the gross costs are some ramp-up costs in relation to initiation of operations in Phase 2, as mentioned, although the effect in the quarter and for 2025 is relatively limited. And consequently, through 2026, there will be some effects on the farming EBITDA cost related to this.

The smolt group sold during the quarter also impacts gross costs. Smolt have both a much higher revenue and cost per kilo than the regular head-on gutted salmon for obvious reasons. As the volumes increase and Phase 2 comes on stream, we expect a meaningful reduction in unit costs driven by scale. In short, Q4 costs are representative of where we are today, not where we are heading.

To look more at the big picture on costs and how the -- and the impact of increased volumes, we have prepared this illustration.

In our fully operational farm, we have a predictable cost structure with about NOK 200 million in fixed operating costs in Phase 1. Admittingly, we have a relatively broad definition of fixed costs. For instance, we define electricity as a one-off them. The reason being that electricity use primarily is defined by whether all tanks are in operation, not how much biomass we produce in them. The same goes for personnel, technical operational costs and so on.

Our run rate of about 6,000 tonnes HOG yields a farming EBITDA cost per kilo of approximately NOK 70 to NOK 75, reaching targeted cost levels in Phase 1 and 2, NOK 56 and NOK 53 per kilo, respectively, is all about scale and maintaining a stellar biology. The majority of the cost improvements is related to scaling of the fixed cost base. Additionally, the feed factor has been higher than normal during 2025, and improvements in this towards targeted levels is also an important part of the equation. Therefore, decreasing farming costs and meeting our cost targets is all about continuing to increase biomass growth, reaching targeted feed conversion ratios and maintaining current performance on mortality and superior grade share. With Phase 2 operational, we will have further scaling effects on the cost base. Even though volumes are doubling, you don't need one additional CFO. The point being that the required operational platform has already been established in Phase 1 and there are multiple cost efficiency gains with Phase 2 operational.

Then over to another topic that has received a lot of attention lately. EBIT cost, depreciations and the distinction between recurring and nonrecurring CapEx in land-based salmon farming. I can only speak for Salmon Evolution and not other land-based farms. But to me, it seems that there are a lot of opinions on this and little facts. With more than 4 years of full-scale operations at Indre Haroy, we have deeper insights into this than most. Let me, therefore, make a few important clarifications.

Indre Haroy is built to last and represents a high-quality asset base, supported by stringent maintenance protocols. Anyone who has visited a facility can attest to the quality and the robustness of the operation. Approximately 25% of accounting depreciation corresponding to NOK 2 out of NOK 8 per kilo relates to engineering, internal project management, rigging and operation of the building site during the construction phase. This is not capital expenditure that we will require -- that will require reinvestments in the future.

In addition, roughly 20% of depreciation relates to concrete and steel structures with an expected useful life well beyond our average depreciation period.

On top of this comes intake pipes and other in-ground infrastructure components with a useful life measured in decades. Hence, our significant portion of CapEx is nonrecurring and carries no future replacement costs. A useful way to think about this is that CapEx for Salmon Evolution effectively replaces license costs in conventional salmon farming. However, licenses are not depreciated whilst our CapEx is, even though a large portion of it does not need to be replaced. The bottom line is that with a high-quality asset base, we are well positioned to maintain a highly competitive EBIT cost over time.

Then let me briefly take you through the balance sheet and cash flow. Phase 2 is progressing according to plan. As Trond Hakon mentioned, building activity has peaked. And from here, we expect capital spending to gradually decrease as we move into a period where the primary focus of the project is process installations whilst civil works is nearing completion. We are comfortable when it comes to the project economics. We have approximately 9 months left in the project and are on track to reach our targeted milestones. Currently, we have high focus in the project on effective project execution to minimize delays, change orders and to ensure good coordination between all disciplines at the building site. And thus, reducing the risk of cost overruns.

When it comes to the previously announced refinancing, we are currently having constructive discussions, and these processes are proceeding as expected. We will update the market in -- on the results of this in due course. Cash flow from operations was positive in the quarter, supported by our reduction in working capital. For 2025, the cash flow at large reflects our underlying financial results and the fact that we increased the standing biomass by over 50% during the year. Overall, we remain firmly on track and the investment, the heavy investment phase is peaking as we move into the scale-up phase.

And bottom line, this is what Indre Haroy is about, positioning Salmon Evolution for significant cash flow generation in the years to come. The key point is that the heavy lifting is done. We have a high-quality asset base in place, and our platform is highly scalable. Strategically, this puts us in a unique position compared to our peers. With Phase 2 fully operational, we are in control of our own destiny with the ability to fund growth from our own operations rather than having to depend on exclusively on external capital. Based on our expected cash flows, we can self-fund growth in the years ahead whilst maintaining a disciplined approach to capital allocation and prioritizing returns overall scale. Bottom line, the business is de-risked, the platform is built and Phase 2 unlocks strong expected financial results with attractive returns.

All right. Trond Hakon for the summary remarks.

Thank you, Trond. So to sum up, we believe that we are well positioned going into 2026. We have a proven operational platform. The heavy lifting is largely done. And with Phase 2 coming online, we are also entering a new phase for the company, moving from CapEx towards scale, earnings and cash flow. So I think the fundamentals are very clear. We have a good biology. We have a scalable platform. We're disciplined on capital. And also, we have a clear visibility on growth. Phase 2 is also a game-changer for the company. It significantly increases capacity, strengthening margins and position us to capitalize on an expected stronger salmon market. So our focus is unchanged. It's all about execution and converting continued operational progress into long-term value creation.

So I think with that, we would -- I would like to thank you all for your attention, and we're now happy to open up for questions. I think we can start in the audience, if any, and then we take questions submitted online.

Just raise your hand if you want the microphone. All right. Quiet audience today, but that's okay. We have a whole list of questions received online. I think I will just start from the top.

Okay. What is the reasoning behind the updated partnership model in Korea? And what ambitions that Salmon Evolution have to scale outside Norway? Trond Hakon?

Yes. No, I think as mentioned, our primary focus now is Indre Haroy and both taking out the full potential of Phase 1 and also delivering Phase 2 according to plan. We clearly have ambitions beyond Indre Haroy, but I think we need to have a very sort of focused approach and that's why we have been very clear that we are focusing our both our capital and our resources in getting Indre Haroy fully up and running. And obviously, also from a growth perspective, Phase 3 is extremely attractive. You have to remember that we have made all the infrastructure investments. We have electricity. We have the permits. Everything is in place. So also from a return perspective, I think there are a few, if any, projects anywhere in the world that can compete on the economics of a potential Phase 3.

But it's not ending with Phase 3. We have ambitions well beyond that, and but it's something about sort of timing. And then I think this was a very good solution for us, where we are able to sort of stay involved in a very good way. We get -- we are able to leverage the competence and experience that we've also built up and we also have a good economic upside. So we're very happy about the sort of this revised structure.

Yes. Just to add, I think it also reflects our very disciplined approach when it comes to capital allocation. And importantly, we also retain our 5-year option, purchase option in the project going forward.

All right. Okay. What do you expect of Phase 2? And how long do you think the ramp-up period will be?

Yes. Now as we went through in the presentation, we have -- we very much look forward to putting Phase 2 into operations. It's so we have now 4 years of experience from Phase 1, gathered a lot of learnings. All of that is incorporated into Phase 2. It will be a fantastic facility. I dare to say next, it will sort of set a new standard for land-based salmon farming and obviously, now, we're starting. We will have a quicker ramp-up in Phase 2 than we had in Phase 1. So we will stock 5 groups this year and by sort of the -- now we are taking over the first 2 tanks in later this quarter, and then we will sort of gradually take over all the remaining tanks sort of for the remainder of this year. So -- by the end of the year, we are sort of all tanks are fully operational and then into first half of next year, we should be at sort of the steady state where we are producing at full capacity.

And of course, also the big difference from Phase 1 is that we have a very experienced staff and we have all the operational protocols in place to facilitate a much faster ramp up.

All right. Yes. Okay. How do you view the salmon market going forward Trond Hakon?

Yes. I think everybody has been a little bit surprised sort of going into this year. I think the expectation was that salmon prices would start higher. Now we've had good seawater temperatures and we've seen higher volumes sort of early in the year. But I think 2026 will not be as 2025. Now it seems like the sort of growth in supply is coming down. And hopefully, very soon, we will see a tightening of the market. But at the same time, you have now -- we have a period behind us with very high supply growth. The good thing about a lot of supply growth is that you then build demand. So when the supply growth comes down, then prices tend to recover quite sharply. So I think we are hopefully on the verge of sort of a new sort of price level. And from our perspective, obviously, we are now with more and more volumes. We are very well positioned to sort of benefit from that.

Thank you. All right. Okay. What are your views on dividend? And do you have a dividend policy in place?

Yes. We have if you -- our dividend policy is available at our web page, so you can check there.

Okay. Looking at the superior grade share, it has been fluctuating a little bit, peaking at around 97% in 2024. And now in Q4 2025, it was 92%. Do you have any comments on this?

I think it will always fluctuate. We don't see any sort of specific reasoning for why it's a little bit higher or lower. I think overall, looking back over the last, yes, 4 years, it's been sort of plus/minus 95%. And sort of that is where what we are targeting also going forward.

Yes. Our lifetime superior grade share is 94.7% to be very exact.

All right. Can you comment on Q4 results for harvest volume and farming EBITDA costs versus your guidance for 2025?

When it comes to the harvest volumes, I think we have covered that in full during the presentation. When it comes to the farming EBITDA cost that was in line with what we have previously disclosed during our quarterly presentations.

All right. Okay. Trond Hakon, looking at the big picture, what opportunities do you see for a Salmon Evolution over the next 5 to 10 years?

We see a lot of opportunities. And I think it obviously starts with Indre Haroy. By the end of this year, we're sort of -- we have built out sort of the growth tanks on Phase 2. But Phase 2 is only -- then we are only halfway. And then we obviously have Phase 3. I think that's sort of a very obvious expansion because we have -- as I mentioned, we have everything in place. It's sort of very easy to just add on, and we can do that in a very cost-efficient way as well, but -- and there's also upside beyond that. And we are looking at other alternatives also in Norway. And I think with the platform that we have, basically being the only player in this space with sort of at this scale and also now getting into a stage where we have a substantial cash flow and sort of an ability to sort of do things then we are in a very good position to also look at other things, which we are sort of consistently valuating. But the core focus is here.

And then obviously, there is there are opportunities outside of Norway. We have this project in Korea. We have also done a lot of work in North America. So we have a very good understanding of the market and the opportunities. So I would say that it starts -- this is only the beginning, and we have ambitions well beyond what you are looking at here. And I think the industry goes into a very, very exciting time. Obviously, last year, we had a weaker salmon prices. But when the market recovers and also when we continue with this improving operationally and suddenly, you get into a phase where you -- where the sort of the business model and also the sort of financial earnings in the company are fully demonstrated then I think there will be a lot of opportunities.

Okay. Then a few closing questions. Can you comment on the scope of the farming cost reductions per kilo we expect in first quarter of '26 and through 2025?

I think on the farming EBITDA cost, we have covered that in quite detail during the presentation. It's all linked to continued operational improvements and increased biomass growth.

And then do you have a few closing remarks, Trond Hakon on kind of the production at the start of the year at Indre Haroy?

Yes. No. But I think we are, as I mentioned, we're going into 2026 on a very good foundation. We have a fully stocked farm. We have good volumes in the already now in the first quarter, knock on wood. We hope that prices soon recover, but we expect them to do so. And then I think this will be a very, very exciting year. We're also, obviously, now with Phase 2, very much looking forward to take that into operation and also at the same time, we have a lot of very interesting initiatives in terms of taking out the full potential in Phase 1 that we very much look forward to seeing the results from over the coming quarters. So I think we are very optimistic now going into 2026.

All right. That concludes it for today. Thank you for attending and see you again, yes, in May, I believe it is. Thank you.

Thank you.

Good morning, everyone, and welcome to this presentation of Salmon Evolution's results for the third quarter.

My name is Trond Hakon Schaug-Pettersen. I'm the CEO of the company. With me here today also our CFO, Trond Vadset Veibust. Also a special welcome to Thomas Farstad, CEO of Milarex, who we have partnered with in connection with the launch of our salmon in Italian retail. So for those of you who have tasted the product this morning, I hope you liked our Italian breakfast.

As you can see from this picture, a lot has happened at Indre Haroy lately with our Phase 2 expansion and where we are starting commissioning and testing in less than 30 days in preparation of our first Phase 2 smolt release scheduled for Q1 next year.

So we will start this presentation by going through the highlights, then I will take you through the operations and our ongoing growth initiatives before our CFO will go through the financials. And then we will end the presentation with some comments on outlook. And towards the end, we will also open up for a Q&A session. For those of you who are attending virtually, you can submit questions via the webcast.

As to the key highlights, I'm pleased to report that our Phase 2 expansion is progressing according to plan. We are on time and on budget. We are on track for the first smolt release in late Q1 '26 with, as mentioned, testing and commissioning starting in just less than 30 days.

We are also very satisfied in continuing to see stable operations across the farm with very low mortality rates and also a consistent high superior grade share.

When it comes to production, the positive trend from previous quarters has continued. We have a fully stocked farm and also saw all-time high production in the third quarter. Harvest volumes ended at close to 1,400 tonnes, generating about NOK 87 million in revenues.

Farming EBITDA at minus NOK 30 million and group EBITDA of minus NOK 40 million. And the results are obviously a reflection of both very weak salmon prices during the quarter as well as some temporary effects on farming costs that we will come more back to later in the presentation.

Looking into 2026, we are expecting a significant increase in harvest volumes, up 50% from this year to approximately 7,000 tonnes gutted. On that note, we are very pleased to see that salmon price expectations for next year have come significantly up, and we believe that we are in a very good position to capitalize on this going into next year.

So moving over to the operations. For us, our immediate focus is on 2 main priorities. It's about operational excellence in Phase 1 and then executing Phase 2 on time and on budget. And in the near term, it's all about maximizing the potential of what we already have, making sure that Phase 1 is running at its best and that we are extracting the full value from our existing operations.

And at the same time, Phase 2 will be a game changer for us. With this expansion, we are moving towards an 18,000 tonnes operation, which is substantial in itself and gives us the critical scale needed for strong returns and also setting the stage for further growth.

Looking a bit further ahead, Phase 3 at Indre Haroy is the obvious next step. We have all the infrastructure in place and also the return metrics are very good. And longer term, we have naturally ambitions beyond Indre Haroy. And as the global frontrunner in this industry, we see a lot of interesting opportunities for future expansion.

But the key enabler for all of this is disciplined growth. We're focusing on returns, overall scale and making sure that what we're building is something that is both scalable and profitable. So our strategy is clear. It's about maximizing what we have, delivering Phase 2 flawlessly and use this as a launch pad for further expansion.

As mentioned, we harvested close to 1,400 tonnes in the third quarter. Most of the harvest took place early in the quarter. We saw a 8% harvest deviation resulting from a temporary higher-than-expected feed conversion ratio, which again impacted the production cost. Essentially, we had less volume of fish than expected, and we have already reviewed and adjusted our operating procedures to address this going forward.

On harvest weight, this was up 20% from the second quarter and ended at 3.5 kilo gutted. Naturally, going forward, a key priority for us is continuing to increase the harvest weight.

On price, our all-in price realization ended at NOK 61 per kilo. This is a reflection of the very low prices during the quarter and the fact that we, in all material aspects are selling our fish in the spot market. But on a positive note, we continue to see that we consistently outperform market reference prices.

The salmon market started recovering through September. Forward prices have come significantly up. And obviously, a lot of this recovery is driven by the negative year-on-year biomass growth that you've seen lately, but also good demand. So looking into next year, we are very optimistic and expect a tight market in which we should be very well positioned to capitalize on.

I'm also pleased to report that our operational momentum continues. This quarter, we achieved a record high net biomass growth of approximately 1,800 tonnes live weight. This is up 6% from the second quarter. And this also marks the fifth consecutive quarter of increased biomass production, and I think a real testament to the dedication and expertise of the team.

Also, the investments we've done and focus on smolt operations have yielded the desired effects. We have had stocking weights well above target over the last year now. And the farm continues to be fully stocked. We have a standing biomass of a little over 3,000 tonnes at the end of the quarter, which is in line with target. And we are also operating with stable biology, minimum mortality, and this provides a robust foundation for further improvements in growth in harvest volumes and harvest weights for the coming periods.

Salmon Evolution continues to set the standard for land-based salmon farming. We have now harvested about 15 groups. So this is now truly an industrial scale operation. We are industry-leading, both when it comes to mortality rates and superior grade share.

Over the last 12 months, we've had a mortality of 3%, which is a fraction of the industry average. And I think this is a direct result of both our technology, our team's expertise our commitment to fish health and our focus and devotion on operational excellence. We also consistently achieved a superior grade share of around 95%, also outperforming the industry and ensuring that our customers receive top quality salmon.

Main focus now is on continuing increasing production and harvest weights as well as optimizing feeding. And with the stable operating environment that we now have, we are very well positioned to also meet our targets on these 2 parameters.

I'm also proud to say that we have completed the first stage of our operational journey, which is systematization and industrialization. We have achieved full operational derisking with stable operations and strong biological KPIs. Our platform is now highly scalable and also the core infrastructure is in place.

Our next focus now is on operational excellence. And as a first step, this includes increasing production in Phase 1 from current 6,000 tonnes, which were the run rate in the third quarter, and I'm talking about gutted volume. We increased that to approximately 6,700 tonnes, which is 85% of design capacity, and we're going to do that by continuing to focus on operational improvements.

At the same time, we will be ramping up Phase 2 so that we within the next 18 months have an annualized production of about 14,600 tonnes gutted, which in itself is a very sizable operation. And following that, we will be taking the pre-grow out tanks into operation, yielding another 2,200 tonnes.

And finally, the focus would be on leveraging the operational insight, gaining connection with the Phase 2 ramp-up to address the remaining bottlenecks in Phase 1. And this is how we're going to get to the 18,000 tonnes gutted by the end of 2027 and thus also giving us an unparalleled platform in the industry.

And Phase 2 at Indre Haroy is a major leap forward for Salmon Evolution. We're not just expanding, we're building a better version of what already works. And we're using over 3 years of operational experience as the foundation.

The upgrades in Phase 2 are significant. They are mainly centered around water quality, which is key to strong biological results. Some of the key upgrades include up to 20% more seawater intake capacity. It's improved degassing systems, improved tank hydraulics, also improvements across multiple technical systems that will increase operational stability and reduce downtime, as well as implementing particle filtration on the water re-use circuit.

Also, we are upgrading the UV disinfection for even better biosecurity together with also improving the fish logistics system for even more streamlined operations. And in sum, this will set a new standard for land-based salmon farming facilities, and we really look forward to take this facility into operation in just a couple of months.

And then in parallel, obviously, we will use the insights gained from Phase 2 to further improve on Phase 1, which may include some technical upgrade with expected non-significant investments.

And we are also planning to end the year with a fully stocked farm. We are prioritizing full biomass as we head into 2026. This position us perfectly to take advantage of what we believe will be a tight salmon market, especially in the first half of next year, the harvest deviation on certain groups impacting 2025 volumes and also the prioritization of Q1 harvest gives an updated guidance this year of 4,600 tonnes.

However, our current run rate in the third quarter supports an annual harvest of about 6,000 tonnes as we through 2025 have been building biomass and the biomass is approximately 50% higher than it was going into this year.

And as we ramp up Phase 2 throughout 2026, we will be adding significant production capacity. While the impact on harvest volumes next year is limited, we are guiding for approximately 7,000 tonnes in harvest next year, which is up 50% from 2025.

And our target is to reach a run rate production of 14,600 tonnes within the next 18 months and with full utilization, we are aiming for 18,000 tonnes run rate by the end of 2027. And obviously, this acceleration of harvest volumes is a true game changer for Salmon Evolution. It enables us to deliver regularly to our partners, broaden our market reach and fully capitalize on the strong market outlook for 2026 and beyond.

And as we double harvest volumes, we are unlocking tremendous opportunities across Europe and beyond. This growth allows us to provide regularity in supply and to build strong long-term partnerships with leading retailers, processors and food service customers. The market is clearly moving towards sustainable seafood and land-based salmon is, I would say, increasingly recognized as an environmentally friendly and responsible choice.

We see that retailers are adopting sustainable seafood policies and consumers are demanding more transparency and quality. And I'm proud to highlight our recent partnership with Milarex, bringing Italy's first land-based smoked salmon to market through Esselunga, which is one of the country's top retailers. This is a great example of how innovation and commitment to sustainability are opening new doors.

Also, our cooperation with premium brands like Lofoten in Norway, Korshags in Sweden further demonstrates our ability to combine tradition, quality and innovation to meet the evolving needs of the consumers. And with Phase 2, enabling weekly harvests, we are in a unique position to offer both consistency, reliability and premium quality, all of which are qualities that set us apart in the market.

So moving over to our growth initiatives. Indre Haroy is truly a flagship facility, both for Salmon Evolution and the industry, I would say. When fully developed, this single location will produce 36,000 tonnes gutted salmon annually enough for 200 million meals, and that's just from 25 acres of land. We have all permits in place. Phase 1 is fully operational. Phase 2 is soon operational and Phase 3 is permitted and ready to go.

The scale we are achieving here is remarkable. Phase 2 adding 10,000 tonnes of capacity. Phase 3 will add another 18,000 tonnes. And this obviously unlocks significant economies of scale and position ourselves as a true cost leader in the industry, which has always been the goal.

And as to Phase 2, I'm pleased to report that this is progressing as planned, on-time and on budget. The pace of construction has been impressive this year, and we are now entering the testing and commissioning phase for the first handovers.

All fish tanks and building shells for the technical buildings are completed. Process installation is now ongoing and moving forward according to schedule. And as you can see from this latest site photo, the scale of this operation is, I would say, truly unbelievable.

I want to highlight the dedication of our -- and the expertise of our team and our construction partners who are ensuring that every milestone is met safely and efficiently. So in sum, we are right where we want to be. We are on track and ready for the next phase of the Salmon Evolution journey.

And I think I wanted to show these 2 pictures because I think these are probably the best way of illustrating that Phase 2 is on track. For Phase 1, we had our first smolt release in March -- late March 2022, and we are now planning to release the first smolt in Phase 2 in late March 2026.

Both of these pictures are taken in October. And for Phase 2, we are now clearly well ahead of where we were at the same time back in 2021. So for us, this is very satisfying to see as it demonstrates that we've been able to incorporate the learning effects from Phase 1 into yielding actual and tangible results.

And further on Phase 2, the water intake infrastructure is nearing completion, and we are now preparing to fill the first tanks with water, which will be a major milestone. We've also completed the planning and engineering pre-project for the pre-grow out tanks that we're planning in Phase 2. We are actively assessing our contracting strategy and potential partners to ensure that we are ready for the next phase here.

Our targeted completion for the pre-grow out tanks is Q2 '27 with full effect on harvest from the second half of that year, pending a final investment decision in the first half of next year.

So then I will leave the word over to our CFO, who will take us through the financials.

Thank you, Trond Hakon. Good to see you all. All right. Although we are -- continued to report improvement on key operational metrics, we are obviously not satisfied with the financial performance in the third quarter. This has its reasons.

Let us review the Farming segment first. Harvest volumes doubled compared to Q3 last year, driving a 70% increase in revenues to approximately NOK 87 million. However, we are fully exposed to the spot markets and all-in price realization was down 15% or about NOK 10 per kilo compared to the same quarter last year. Safe to say, full exposure to the spot market worked strongly to our advantage last year with the opposite effect this year. Through 2025, the weak salmon prices has been the primary impact on the negative EBITDA development year-over-year.

Farming costs in the quarter were elevated due to harvest deviations, which inflated the feed costs and fixed cost allocation on the fish harvested. More on the specific cost effects in a minute. Based on the capacity utilization in the period where we produce these groups, the Farming EBITDA cost should have been approximately NOK 76 per kilo.

Summarized, Q3 was a weak quarter where weak salmon prices paired with temporary higher farming costs led to an operating loss. We expect significant improvement in Q4 on the back of higher prices and lower costs.

Outside Farming, the group includes the Other segments, which are essentially headquarter and expansion costs. Operating expenses in this segment were slightly lower than preceding periods. So the same factors impacting the Farming segment also flowed through to the overall group results.

Again, we are not satisfied with the results this quarter. However, a significant price recovery during the quarter, continued volume growth and normalization of farming costs reinforces our positive outlook for the periods ahead.

As mentioned, our farming costs in the quarter were elevated due to harvest deviation, inflating feed costs and fixed cost allocation on the fish we harvested. The feed conversion ratio on this groups were a little north of 10% higher than what we consider a normal level, resulting in a NOK 3 per kilo negative effect. We consider the elevated feed conversion ratio temporary. And as Trond Hakon mentioned, we have already taken appropriate actions to address this.

The deviation also led to the fixed cost allocation being inflated. We allocate costs following standard accounting practices and negative harvest deviations means that simply put, more costs should have been allocated to fish we have already harvested in previous quarters.

As a result, the costs recognized in Q3 were higher than what we would expect under normal circumstances, and we consider the underlying Farming EBITDA cost to be around NOK 76 per kilo. We expect a meaningful improvement in farming costs in the coming quarters.

Looking at production costs based on the record Q3 biomass growth, adding on harvest costs and G&A creating an equivalent to the Farming EBITDA cost, we consider a normalized Farming EBITDA cost per kilo of approximately NOK 71 on the biomass we produced in the third quarter.

To dwell further on how costs will develop with increased volumes, we have prepared this illustration. In a fully operational farm, we have a fairly predictable cost structure with about NOK 200 million in fixed operating costs in Phase 1. For example, electricity is defined as a fixed cost because we use approximately the same amount of energy producing at 80% compared to 100% utilization. And we have a hedging strategy to secure a long-term stable price.

The same goes for personnel. Higher biomass growth will not mean we hire more people. In other words, these costs are fairly fixed and the per kilo cost depends on how much biomass we produce.

As highlighted earlier in the presentation, we are at a run rate of approximately 6,000 tonnes gutted. This gives a normalized Farming EBITDA cost per kilo of about 70, assuming a feed conversion ratio of 1.1 and annualized mortality around 3%. Therefore, decreasing farming costs and meeting our cost targets is all about continuing to increase biomass growth, reaching targeted levels on feed conversion ratio and maintaining current performance on mortality and superior grade share.

With Phase 2 operational, we have further scaling effects on the cost base. Even though volumes are doubling, you don't need one additional CFO. The point being that the required operational platform for the company has already been established with Phase 1.

As an illustration, full run rate personnel in Phase 1 and 2 combined is only about 30% higher than Phase 1 stand-alone with double the volumes. There are multiple such cost efficiency gains with Phase 2 operational, and we have calculated these effects to approximately 5% to 6%, but that is probably a conservative estimate.

Another important point when it comes to the earnings potential is the benefits of our production methods gives us on price realization. We have a clear superior grade advantage to the industry. Our superior grade share significantly outperforms conventional farmers. And with much less downgraded fish, we simply get better paid per kilo.

And then as mentioned, a stable year-round supply gives enhanced price realization compared to conventional peers as we have much more volumes in the first half of the year when industry supply is tighter and prices are higher.

All in all, this constitutes a built-in price premium of NOK 5 to NOK 7 per kilo based on reasonable assumptions before we factor in any benefits from our strong brand story. And the brand story adds further uplift on price realization. We have best-in-class fish welfare and our farming method is more sustainable and ocean-friendly. In sum, we deliver delicious salmon with a good feeling, which will pave the way for many interesting retail partnerships.

Then a quick review of the balance sheet and cash flow. Phase 2 is on schedule and budget. Building activity has reached its peak and looking ahead, investments will gradually start to decrease. The increase in net interest-bearing debt reflects first drawdown on the construction financing in July as planned with subsequent drawdowns in August and September. The Phase 2 project is now financed through the available construction facilities.

Operating cash flow in the quarter reflects the temporary weak salmon prices. We expect this to significantly improve in Q4 and heading into 2026. There was a slight increase in working capital compared to last quarter.

Indre Haroy is at run rate target in terms of biomass size and the biomass level at the end of the quarter was almost identical to the second quarter, with value of inventories net of fair value down approximately 5%. The increase in working capital was primarily a timing effect of -- on receivables and payables.

At the end of the quarter, we had cash and cash equivalents of NOK 156 million, excluding amounts available under the existing bank facilities.

During the quarter, we also initiated refinancing of the loan facilities linked to Indre Haroy to ensure a flexible and robust capital structure as we move forward. Our banking partners continue to show strong support as illustrated with the new NOK 250 million credit facility secured in June and the fact that we have been able to refinance at increasingly better terms over time.

Indre Haroy has been built with good timing and good execution, and the replacement cost is estimated to be at least NOK 1 billion higher than its historic cost, demonstrating substantial excess value and the strength of our asset base as well as indicating additional leverage capacity.

With the Phase 2 first smolt release only months away, we are on track to double annual harvest to 18,000 tonnes HOG. This expansion is a game changer and transforms our financial platform, unlocking significant cash flow potential. On top of this, we are heading into a market with expectations of limited supply growth and strong demand, which, from our point of view, underline the strong long-term price prospects for salmon.

In summary, Salmon Evolution is entering its next phase from a position of strength financially, operationally and strategically. I'm confident that our disciplined approach and scalable platform will continue to create substantial value in the years to come. Trond Hakon?

Thank you, Trond. so as we look ahead, the salmon market is entering a pivotal phase. Supply is expected to tighten significantly in 2026, mainly driven by a significant drop in global supply growth. This year, we saw record high volumes out of Norway, which put pressure on prices.

However, history shows that -- it shows a strong correlation between supply and price. And when supply eventually comes down, prices tend to rebound quickly. Here, we have borrowed some data from DNB Carnegie. And as you can see from the chart, they expect supply out of Norway to drop 6% next year with 0 global supply growth. And this is a dramatic shift from what we have seen in 2025.

And we are positioning Salmon Evolution to capitalize on this recovery. With Phase 2 also coming online and our operational scale increasing, we are in an excellent position to benefit from this expected recovery.

So as we close this presentation, I want to emphasize that Salmon Evolution stands on a proven platform. Our operational model is working, and we have consistently maintained stable operations.

With Phase 2 soon coming online, the heavy lifting is behind us. We are well on our way to reaching 18,000 tonnes of annual production, which will also give us the scale needed to unlock truly attractive economics and also a robust cash flow.

And as mentioned, the global supply -- salmon market is poised for recovery, and we are uniquely positioned to benefit from that upswing. Our combination of operational excellence, disciplined growth and also a scalable platform truly sets us apart in the industry. So we're not just keeping pace -- we are shaping the future. Our team, our technology and our strategy puts us in a position of strength as we move into 2026 and beyond.

So I will say in summary, the foundation is set. We believe that we have a strong momentum and the opportunities ahead are also significant. And we are more confident than ever that Salmon Evolution will deliver strong value for our stakeholders and continue to lead the industry going forward.

So thank you all for your attention and your continued support. We are confident that the best is yet to come. Thank you. And then we will open up for Q&A. We will start here in the audience, and then we will take questions submitted via the webcast after that.

Alex Aukner from DNB Carnegie. So what kind of debt levels are you comfortable running? You've been talking about 65% loan-to-value, et cetera. It's -- if you look at traditional farmers, which typically governs by net interest-bearing debt per kilo, it's a high level. So what's the capacity? What are you happy with?

Yes. Good question, Alex. I think if we start at the beginning, we have a little bit different production model than a conventional farmer. We have a more stable operation. We have more stable volumes year around, and we also have a different type of asset at the core.

Looking at debt levels, we have -- currently, we have a loan to cost of approximately 50%, a level we are comfortable with. But looking ahead, I think there is room for a little bit more leverage on the assets we have.

I think also it's also connected to how we sort of structure or hedge our cash flow. Today, we are solely spot based. But now with Phase 2, we are getting into weekly harvest and then it's much easier to hedge the salmon prices and the revenue in the same way as we can hedge the electricity prices and so forth and then creating a vehicle with a much more stable cash flow throughout the year, which also sort of opens up for somewhat higher debt levels. But I think, as Trond said, we have been able to gradually lift the debt levels since we started. And I think there is probably room for a little bit more.

Christian Nordby, Arctic Securities. Based on what you see today in terms of smolt stocking into Phase 2, how much Phase 2 harvest will you have in 2027?

In 2020?

'27.

Yes. Then we are basically -- so we are -- we have -- we are now ramping up in 2026. We are gradually sort of taking more and more tanks into operation, and then we will have a gradual ramp-up throughout 2026 and somewhat into the first half of 2027. So when you get to sort of the summer in or out of the first half of 2027, then we are at full run rate.

Hello. My name is [ Lars ]. I'm a student here in Oslo and just super interested in your company. I'm just wondering about discussing Phase 3, how are you planning on raising the equity and financing for that phase?

I think as to Phase 3, now the primary focus is sort of delivering Phase 2 and get that up and running. Clearly, with Phase 3 -- so the financing in Phase 3 also depends on sort of the pace we want to have. Clearly, with Phase 2 now, we are building a strong platform that will have a significant cash flow generating capacity. And also there are opportunities on sort of other capital sources. So that is something that we will sort of eventually evaluate how to do that in the best possible way.

But, clearly now, Phase 2 will be completed by the end of next year. And then it will be sort of a ramp up somewhat into 2027 before we are at full capacity. But clearly, to get going with Phase 3 as soon as possible is a core priority. But I think we will have a lot of options to do that in terms of financing.

Anyone else? No. Okay. We have gotten some questions via the webcast. I will just start at the top. Okay. How do you view your expansion strategy and what does that entail?

Yes. No, I think as we clearly stated, the core focus in our company today is sort of maximizing the potential of Phase 1 and delivering Phase 2 according to plan and get that up and running.

We have a fantastic starting point with Phase 3 fully permitted. It's a huge project in itself. And so that is the main priority. But there are a lot of other opportunities out there, both in Norway, and we also have these projects overseas that we have been working on.

But I think the opportunities are there, but core to sort of be able to follow through on those opportunities is that you have a platform that is both scalable and profitable, and that is the core priority at the moment.

Okay. How are sales going in Italy?

I think that's -- we have just launched the product. So it's a little bit early to tell, but I'm sure that Thomas will happily elaborate on how well it's going.

Okay. What are you expecting from the salmon price?

I think we've also covered that quite well during the presentation. During the quarter, you've seen a significant price recovery and the outlook for 2026 is looking strong when it comes to the salmon price from our point of view.

All right. Okay. How much CapEx -- maintenance CapEx do you expect for Phase 1 in 2026?

I think that everybody that has visited Indre Haroy has noted the high quality on which the facility is built. So it's still a fairly new facility. And I think we can safely say that the maintenance CapEx on Indre Haroy Phase 1 will be limited also in 2026.

Which has been this year --

As well.

Yes.

And then the final question. What is the reason for the 2% drop in superior grade share? I'll leave that to you Trond Hakon.

Yes. I think, would say 95% -- plus/minus 95%. So you will have obviously, some natural fluctuations from quarter-to-quarter. So I don't think there's -- I wouldn't read too much into that. We have -- yes, we have harvested out 15 groups, and we've been -- we see that we consistently have had a very high superior grade share, but there will be some smaller fluctuations from quarter-to-quarter.

We just actually got one additional question. I will read that as well.

You are at the forefront in relation to fish welfare and sustainable production. How is your assessment of your edge in the market going forward with this backdrop?

Yes. I think being at the forefront on fish health, fish welfare is essential, and that's sort of part of our -- sort of reason for being here. We want to produce salmon in a sustainable way and take the industry going forward. And I think going forward, it will probably be more and more important, just in terms of the sort of license to operate. So clearly, this is a clear strength that I think will really benefit us in the years to come.

All right. That concludes the Q&A session.

Please also remember to grab a piece of smoked salmon on your way out if there are any left.

You seldom get anything free from people from the West Coast. So feel free.

All right. See you again in February. Thank you.