Fourth quarter highlights
- Construction of Phase 1 at Indre Harøy progressing according to plan – on time and on budget
- Critical infrastructure completed including wastewater tunnel – project execution risk significantly reduced
- Received a NOK 96.8 million funding commitment from Enova and granted NOK 14 million in funding from the Norwegian Skattefunn tax incentive scheme
- Available cash of NOK 648 million (NOK 2.95 per share) at 31 December
Subsequent events
- Signed Joint Venture term sheet with Dongwon Industries for the establishment of a 49/51 joint venture for construction and operation of a 20,000 tonnes LWE land-based salmon farming facility in South Korea
- Constructive discussions with banks for long term debt financing of phase 1 at Indre Harøy – committed term sheet expected finalized Q1/Q2 2021
Since the groundwork started in May, Phase 1 at Indre Harøy has developed according to plan. The main contractor, Artec Aqua, has entered into agreements with subcontractors who are currently working on site.
Blasting work for the fish-tanks and buildings is completed, and the masses have been transported out or crushed for reuse. Concrete works, including foundations for buildings and tanks, started in September and will continue in the coming quarters. Tunnel for wastewater was successfully finished in December.
The company remains on track for the first smolt release which is scheduled to be in March 2022.
Total capital expenditures during the fourth quarter amounted to NOK 71.8 million, of which NOK 68.3 million were investments related to the turnkey project with Artec Aqua and NOK 3.2 million was capitalized personnel and shared cost. As per 31 December 2020, accumulated capex from project initiation in 2019 amounts to NOK 220.0 million.
Commenting on the development, CEO Håkon André Berg, said:
“Activity on Indre Harøy was high during the quarter, with important milestones for the groundwork being reached and we are happy to see the project develop according to plan. During the quarter, we also received public funding and grants, strengthening our financial capabilities further.”
In February 2021, Salmon Evolution signed a term sheet for a joint venture with Dongwon Industries for the development, construction, and operation of a 20,000 tonnes LWE land-based farming facility in South Korea, using Salmon Evolution’s hybrid flow through technology (“HFS”). The project will be developed in two phases, with construction start targeted in 2022 and commencement of grow out production in 2024.
“This collaboration is in accordance with Salmon Evolution’s overall strategy for international expansion, leveraging our in-house experience and HFS competence in developing close-to-market salmon production in collaboration with local first-class partners.””, says Berg.
Outlook
Salmon Evolution expects global demand of salmon to continue to grow in coming years, and thus see limited risk for the volume contribution from land-based suppliers bringing the salmon market out of balance. Salmon Evolution has clear ambitions to be among the leading players in this market. The company has a clear road map towards +70,000 tonnes production capacity by 2030 and is already on track for ~25,000 tonnes by 2024.
Results presentation
CEO Håkon André Berg and CFO Trond Håkon Schaug-Pettersen will present the results by webcast today, Tuesday 2 March at 08:00 a.m. CET.
The presentation and subsequent Q&A will be held in English.
The presentation can be accessed at www.salmonevolution.no, or with the following link: https://streams.eventcdn.net/salmonevolution/2020q4/