Måsøval : Q1 Report 2024

Quarterly Report

Q1 2024

Made by

nature

Pioneered by

Contents

Summary Q1 2024	7
Highlights Q1 2024	8
Key figures Q1 2024	10
2. Financial Performance	10
2.1. Statement of Profit and Loss	10
2.2. Balance Sheet	11
2.3. Statement of Cash Flow	11
2.4. Financial Position	11
3. Operational Performance	12
3.1. Farming	12
3.2. Sales & Processing	14
4. Outlook	15
4.1. Farming Outlook	15
4.2. Price (NASDAQ)	16
5. Other Matters	17
5.1. Lawsuit Against the State	17
5.2. Demerger and Triangular Merger Process	17
5.3. Complaint Regarding Exhibition License Accepted	17
5.4. Western Seaproducts AS	17
6. Events after the balance sheet day	18
6.1. New harvesting facility	18
6.2. Increased wellboat capacity	18

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7. Consolidated Financial Statements	19
7.1. Income statement	19
7.2. Consolidated Statement of Other Comprehensive Income	20
7.3. Statement of Financial Position	21
7.4. Statement of Cash Flows	23
7.5. Statement of Changes in Equity	24
7.6. Notes to Consolidated Financial Statement	25
Note 1: Basis for Preparation	25
Note 2: Business Segments	26
Note 3: Operating Revenue	28
Note 4: Share Capital and Shareholders	29
Note 5: Biological Assets and Other Inventories	30
Note 6: Transactions with Related Parties	32
Note 7: Intangible Assets and Property, Plant and Equipment	33
Note 8: Tax	34
Alternative Performance Measures	35

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Made by

nature

Måsøval is a Norwegian fish farming pioneer. Ever since the company was founded in 1973, our dedicated employees have worked in close harmony with nature.

On the coast of central Norway, the Atlantic provides strong currents and high tidal rage, ensuring an abundance of fresh, clean seawater. It's here, in one of the most beautiful coastal landscapes in the world, that we make one of the best ingredients in the world - Salmon: Made by nature, pioneered by Måsøval.

Led by the third generation of the Måsøval family, we now look forward to producing more than 30 000 tonnes of salmon a year, serving 3.1 million people - every single week, year-round.

And even though we've already achieved a lot, we're still hungry for more

sustainable growth.

Pioneered by

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Summary

Q1 2024

Harvest volume (Tonnes GW)

Group operational EBIT (MNOK)

Operational EBIT pr kg (NOK) Farming Mid

7 573	7 927
7 037

3 606

1 994

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

46.8

32.8 32.9

26.7

18.9

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Operational EBIT pr kg (NOK) Farming West

23.5

18.1

9.4

12.4

8.2

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

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Highlights Q1

2024

			95.6 NOK/kg
3 606 tonnes
Harvest of 3 606 tonnes vs 1 994	Average sales price of NOK 95.6 pr kg
tonnes in Q1 2023			(NOK 83.9 in Q1 23)

				46.8 NOK/kg
	MNOK 121
Group operational EBIT of	Farming Mid reported an operational
MNOK 121 (MNOK 36 in Q1 2023)		EBIT of NOK 46.8 pr kg (NOK 32.8 in Q1
				23)

12.4 NOK/kg

Farming West reported an operational

EBIT of NOK 12.4 pr kg (NOK 18.1 in Q1 23)

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Key figures

Q1 2024

2. Financial Performance

(Figures in brackets refer to Q1 2023, unless specified otherwise.)

2.1. Statement of Profit and Loss

Key figures Group

Consolidated numbers in 1 000 NOK	Q1 2024	Q1 2023	2023
Sales revenues salmon	383	057	208 745	2 279 560
Other operating revenues	19	199	28 519	120 788
Operating revenue	402	256	237 264	2 400 348
Harvested volume (tonnes GW)	3	606	1	994	24 531
Operational EBIT	120	557	35 863	471 429
EBIT (1)	98	676	-12 244	292 743
Profit before tax	54	430	-39 592	164 240
Net profit or loss for the period	29	977	-31 223	-133 396
Operational EBIT/kg		33.4		18.0	19.2
Operational EBIT%	30.0%	15.1%	19.6%
Equity ratio	36.4%	38.2%	34.8%
Earnings per share (NOK) (2)		0.32		0.02	1.45

1. Op. EBIT adjusted for write-down, production tax, profit sharing co-locations and fair value adjustment biomass
2. EPS excl. net fair value adjustment biomass and one-off implementation effects of resource rent tax

In the first quarter of 2024 operating revenues amount to MNOK 402, an increase from MNOK 237 same quarter last year. The increase in revenue is attributable to both a higher harvest volume (3 606 tonnes vs 1 994 tonnes) and higher average sales prices (NOK 95.6 pr kg vs NOK 83.9 pr kg).

In Q1 the Group achieved operational EBIT of MNOK 121, up from MNOK 36 Q1 last year.

After net financial expenses of MNOK 44 and net negative fair value adjustment of biomass of MNOK 6 the Group report a profit before tax of MNOK 54. Total tax expenses amount to MNOK 24, of which the estimated resource rent tax amounts to MNOK 12 in Q1 2024.

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2.2. Balance Sheet

At the end of Q1 2024, total assets amounted to MNOK 5 011, a decrease of MNOK 149 from the previous quarter. Total property, plant and equipment decreased by MNOK 69. Further, total current assets decreased by MNOK 110, dominated by a decrease in accounts receivables of MNOK 158. Biological assets, on the other hand, increased by MNOK 96 from the end of 2023 reflecting a 1 592 tonnes increase in biomass.

The Group's net interest-bearing debt decreased by MNOK 33 compared to the end of 2023 and amounted to MNOK 1 772 at end of the quarter. The decrease is mainly due to a positive cash flow from operating activities. A total of MNOK 1 365 have been restated from short term to long term debt at the end of Q1 2024 after resolving the breach of covenant in the part owned subsidiary Pure Norwegian Seafood at year end 2023.

At the end of the reporting quarter, the Group's total equity was MNOK 1 824. Equity increased by MNOK 30 compared to the yearend 2023.

2.3. Statement of Cash Flow

Operating activities yielded a positive cash flow of MNOK 77 for the Group in Q1 2024. Accounts receivables reduced by MNOK 158 resulting in a positive cash flow effect after seasonal high sales at the end of 2023. While the build-up of biomass had a negative effect on operational cash flow amounting to MNOK 124 before fair value adjustments.

Investing activities had a negative cash flow effect amounting to MNOK 26.

Financial activities had a negative effect on cash flow with an effect amounting to MNOK 50. Repayment of borrowings, leases and interest amounted to MNOK 95. Repayments was partly balanced by a net change in overdraft facilities amounting to MNOK 45.

2.4. Financial Position

In Q1 2024 the equity ratio increased due to total assets decreasing MNOK 149 and a net profit of MNOK 30. The equity ratio ended the quarter at 36.4%, up from 34.8% last quarter.

After reclassification to short term liabilities at year end 2023 based on a breach of loan covenants in the part owned subsidiary Pure Norwegian Seafood the Groups bank financing is again classified as a long-term liability end of Q1 2024. The Group also have large unused bank financing facilities.

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3. Operational Performance

The Group's management monitors and allocates resources to the Group's business activities as two operating segments, i.e. Farming and Sales & Processing. In addition, Farming is measured on Farming Mid and Farming West as two divisions. Overhead, related HQ costs, depreciation related to surplus values from acquisitions and intra- segment transactions are reported as Other/Eliminations. See note 5 to the consolidated financial statement for further details.

3.1. Farming

(Figures in brackets refer to Q1 2023, unless specified otherwise.)

Key figures Farming

Consolidated numbers in 1 000 NOK	Q1 2024	Q1 2023	2023
Total operating revenues	366	165	190	040	2 189	016
Operational EBIT	164	174	52	827	554	531
Operational EBIT -%	44.8%	27.8%	25.3%
Harvested volume (tonnes GW)	3	606	1	994	24	531
Operational EBIT per kg salmon		45.5		26.5		22.6

Farming is the Group's largest segment and achieved sales revenues of MNOK 366 of which MNOK 345 is sale of salmon. Increased harvested volume and higher average sales price than in Q1 2023 led to an increase in sales revenue of MNOK 176. Operational EBIT in Q1 2024 amounted to MNOK 164 (MNOK 53). Operational EBIT per kg harvested salmon was NOK 45.5 (NOK 26.5).

During Q1 the Group built biomass in order to reach full MAB utilisation, in a period with low sea temperatures. Harvesting was moderate while biological performance during the quarter was strong. The group ended the quarter with a biomass of 13 457 tonnes of which 7 705 tonnes had an average weight exceeding 4 kg indicating a high harvest volume potential for Q2.

Jelly fish had a negative effect on price achievement in the quarter but no material impact on mortality. Harvesting decision in Måsøval is guided by fish welfare and thus the fish with most ulcers was harvested first. This resulted

in low superior share during Q1. The jelly fish have affected the entire industry resulting in larger price differential between superior grade and production grad this year.

As a consequence of good biological performance fish and a tight cost focus, released from stock cost at a lower level. We see continuing low costs into Q2 harvesting primarily at same sites as Q1.

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3.1.1. Farming Mid

Key figures Farming Mid

Consolidated numbers in 1 000 NOK	Q1 2024	Q1 2023	2023
Total operating revenues	354	743	124	527	1 548	274
Operational EBIT	162	463	37	363	432	454
Operational EBIT%	45.8%		30.0	27.9%
Harvested volume (tonnes GW)	3	468	1	140	16	886
Operational EBIT per kg salmon		46.8		32.8		25.6

Farming Mid is the Group's largest division and achieved sales revenues of MNOK 355 in Q1 2024, of which MNOK 334 is sale of salmon. Farming Mid's average sales price was NOK 6.3/kg higher in comparison with Q1 2023 and harvested volume increased by 2 329 tonnes. Operational EBIT in Q1 2024 was MNOK 162 (MNOK 37). Operational EBIT per kg harvested salmon was NOK 46.8 (NOK 32.8).

3 468 tonnes of salmon (1 140 tonnes) were harvested in Q1 2024. 100% of harvested volume was from generation Spring 2023.

Operationally Q1 was a quarter with strong sea production and a moderate harvesting volume, resulting in building biomass during the quarter.

3.1.2. Farming West

Key figures Farming West

Consolidated numbers in 1 000 NOK	Q1 2024	Q1 2023	2023
Total operating revenues	11 421	65	512	640	724
Operational EBIT	1 711	15	463	122	077
Operational EBIT%	15.0%	23.6%	19.1%
Harvested volume (tonnes GW)	138		854	7	645
Operational EBIT per kg salmon	12.4		18.1		16.0

Farming West achieved sales revenues of MNOK 11 in Q1 2024, all the revenue is related to the sale of salmon. Farming West's average sales price was NOK 5.0/kg higher in comparison with Q1 2023. Compared to Q1 2023 harvested volume decreased by 716 tonnes. Operational EBIT amounted to MNOK 2 (MNOK 15). Operational EBIT per kg harvested salmon was NOK 12.4 (NOK 18.1).

138 tonnes of salmon (854 tonnes) were harvested in Q1 2024. 100% of the harvest was from 2023 generations. The fish was harvested early in the quarter from the same site as in Q4 2023 and was thus harvested due to fish health considerations. Harvesting on low average weight impact cost and price achievement. The remaining fish at the site have experienced stable fish health situation and good appetite.

Operationally Q1 was a quarter with strong sea production, combined with low harvesting volume which resulted in building biomass during the quarter also for Farming West.

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3.2. Sales & Processing

Key figures

Consolidated numbers in 1 000 NOK	Q1 2024	Q1 2023	2023
Total operating revenues	401 223	229 363	2 377	349
Operational EBIT *)	-23 979	843	11	839
Operational EBIT%	-6.0%	0.4%		0.5%

*) Including a one-off effect in Q1 2024 due to a loss of MNOK 15 regarding a sale of the harvesting facility Western Seaproducts

The Sales & Processing segment achieved sales revenues of MNOK 401 in Q1 2024, vs. MNOK 229 in Q1 2023.

The Group realised a loss of MNOK 15 due to the sale of the harvesting facility Western Seaproducts AS in Vartdal. Handling the special circumstances in the subsidiary Pure Norwegian Seafood generated extraordinary costs to recall sold products, legal assistance and internal investigations in the quarter. In total this led to a negative operational EBIT for the segment of MNOK 24.0 in Q1 2024.

Spot exposure in the quarter was high - in line with the Group's strategy.

Sales Volume (tonnes GW)

7 788	7 989
7 103

3 611

2 270

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

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4. Outlook

4.1. Farming Outlook

Full year Harvest volume is estimated at 27.000- 28.000 GWT for the Group, this figure includes an estimated 5-10% of the total volume harvested on the Frøya Laks co-location agreement. Around 75-80% of the annual harvest volume is expected to be harvested in region mid.

In Q2 the Group expect to harvest 7.500 - 8.000 GWT, this figure includes harvesting on the Frøya Laks co-location agreement. Around 75% of the volume is expected to be harvested in region mid.

Cost is expected to rise marginally from a very low level in Q1.

Harvest Volume (tonnes GW)

Fully utilized Måsøval has a potential to produce around 29.000 GWT on the current license portfolio. In addition, the Exhibition license have a potential of 5-600 GWT and the co-location agreement with Frøya Laks adds a volume of 4000 GWT when fully utilized.

Harvest Volume 1 000 GWT

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4.2. Price (NASDAQ)

The average salmon price for superior grade salmon is expected to rise in Q2 2024 compared to Q2 2023. During the quarter fish pool prices for the remaining quarter in 2024 have risen. Fish Pool prices for Q2 2024 are currently trading at NOK 122 and the average price for 2024 is NOK 100.

NASDAQ average price (NOK/kg)

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5. Other Matters

5.1. Lawsuit Against the State

Måsøval AS filed a lawsuit against the State, claiming compensation of MNOK 29.8 for the losses the company incurred after the facility Kattholmen was misdiagnosed with PD SAV3 in August 2019. The case went to trial in November 2023.

On 23 December 2023, a judgement was rendered in the case, which was served to the parties on 29 December 2023. The court's conclusion is that the State, represented by the Ministry of Trade, Industry, and Fisheries, is ordered to pay Måsøval MNOK 12.8 in compensation for loss of earnings and incurred expenses as a result of the misdiagnosis, plus accrued interest and delay interest. Costs incurred from the trial have been booked, while no compensation have been accrued as income because of the verdict.

The State appealed the verdict on 2 February 2024 and Måsøval submitted an independent appeal in the case 5 February 2024. The case will go before the Court of Appeal in June 2024.

5.2. Demerger and Triangular Merger Process

A condition for completion of the Internal Reorganization is that the Company receives a binding advance tax ruling ("BFU") from the tax authorities confirming that the Internal Reorganization can be completed with tax continuity. The Company has received a BFU where the tax authorities conclude that the outlined deduction of assets acquired in 2023 means that the Internal Reorganization cannot be carried out with tax continuity. The deduction has limited value for the Company, and therefore the Company has requested a new binding advance ruling from

the tax authorities. Subject to such confirmation from the tax authorities, the Internal Reorganization will then be implemented.

5.3. Complaint Regarding Exhibition License Accepted

Måsøval Lisens AS, a wholly-owned subsidiary of Måsøval AS, filed a complaint on 2 March 2020 to the Ministry of Trade, Industry and Fisheries, against the Directorate of Fisheries rejection on 11 February 2020, of their application for an exhibition license. On 23 February 2024, the Ministry has informed Måsøval Lisens AS that the complaint has been accepted and that a permission can be given for an exhibition license of 780 tonnes MAB for a period of 10 years from the issuance of the permit document. The Directorate of Fisheries will supplement the Ministry's decision by formulating appropriate conditions in light of the Ministry's assessments and conclusions. It will take time before an exhibition license can potentially be applied, and there will be uncertainty regarding whether it can be used depending on the final conditions from the Fisheries Directorate and other sector authorities, and whether Måsøval Lisens AS can fulfil those.

5.4. Western Seaproducts AS

Western Seaproducts AS, a fully owned subsidiary of the group, was sold to Ode ASA in February. A seller credit was issued to the buyer with a maturity of 5 years. The buyer has committed not to harvest any salmon at the processing plant.

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6. Events after the balance sheet day

6.1. New harvesting facility

In January Mowi ASA accepted the bid from Måsøval AS to acquire the harvesting facility at Ulvan in Hitra Municipality. The process is now finalized and Måsøval has signed the final contract and has taken over the harvesting facility in May. Måsøval's intention with the acquisition is to continue the harvesting operations and develop the facility to increase the harvesting capacity within the Group. Planned start up is end of 3rd quarter 2024.

6.2 Increased wellboat capacity

The Group entered into a time charter agreement with Njord Kya AS for the wellboat "MS Njord Kya" which is currently under construction and is expected to be operational by the end of 2024. Term of the charter party is for 3 years with options of 2 x 2 years.

Måsøval is thus increasing the wellboat capacity within the group to meet the company's production targets, as well as to ensure that the best solutions are available in respect of fish welfare and quality.

Måsøval looks forward to putting the new wellboat into operation. The vessel ensures additional capacity and with new technical features that are important for Måsøval such as combination sealice treatments with freshwater and Thermolicer continuously and without bottlenecks, in addition with sorting that can be done efficiently and gently in a vacuum.

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7. Consolidated Financial Statements

7.1. Income statement

(All amounts in NOK 1000)	Note	Q1 2024	Q1 2023	2023
Operating revenues - sale of salmon	3,6	383 057	208	745	2279	560
Other operating income	3,6	19 199	28	519	120	788
Total operating revenues		402 256	237	264	2400	348
Cost of goods sold		72 738	38	119	1165	918
Salaries and other personnel costs		68 967	61	317	242	882
Depreciation and amortisation expense	7	49 461	47	610	194	773
Other operating expenses	6	90 533	54	356	325	346
Total operating expenses		281 699	201	401	1 928	918
Operational EBIT		120 557	35	863	471	429
Write-down		-		-	-43 955
Production tax	8	-3 372	-2 233	-18 824
Profit sharing with co-location partners		-11 764	-2 760	-24 627
Net fair value adjustment - Biological asset	5	-6 745	-43 113	-91 281
EBIT		98 676	-12 244	292	743
Financial income		3 851	3	909	25	543
Financial expenses		48 097	31	257	154	046
Net finance income and expense		-44 246	-27 348	-128 503
Profit before income tax		54 430	-39 592	164	240
Tax expense	8	24 454	-8 369	297	636
Net profit for the period		29 977	-31 223	-133 396
Attributable to
Equity holders of the parent company		33 994	-31 267	-135 901
Non-controlling interests		-4 017		44	2	505
Total allocations		29 977	-31 223	-133 396
Earnings per share (basic and diluted)*		0.32		0.02		1.45

* Earnings per share excludes Net fair value adjustment - biological assets

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