Bakkafrost Aktie

Good morning, and welcome to the presentation of Bakkafrost's results for the second quarter 2026. My name is Hogni Jakobsen. I'm here today with our CEO, Regin Jacobsen. First, a disclaimer, which I will leave for self-study. We will follow the usual agenda today, beginning with an overview of the second quarter before we move into markets and sales and then on to finance, operations and finally, outlook.

So in the second quarter, operational performance improved for Bakkafrost with revenues increasing 16% year-on-year to DKK 1.8 billion and operational EBIT of DKK 273 million compared to DKK 65 million last year. In the Faroes, we harvested more fish than we have ever done before in the quarter, 26,700 tonnes. And in Scotland, it was the opposite. It was less than half, a 55% reduction, 3,100 tonnes harvested. This is a result of the derisking strategy that we have been following while we await the new capacity to be fully utilized with large smolt in Scotland.

At our fishmeal, oil and feed division, feed sales were relatively stable at 37,000 tonnes. Meal sales were 0 as we are preserving inventories to ensure that we are self-sufficient with fish meal for our own feed production. Currently, our stocks will enable us to produce into Q2 next year. Sourcing of marine raw material was lower this quarter, 32% reduction. We sourced 109,000 tonnes. Cash flow from operations were DKK 273 million compared to minus DKK 204 million last year. And finally, in May, we also paid dividends of DKK 3.45 per share.

Group all-inclusive margins improved from DKK 2.82 per kilo to DKK 9.12, supported by the stronger Faroese operation. This took place in the market context with high supply, muted salmon prices and reduced large fish premium. The Faroes delivered DKK 15.38, up from DKK 13.15. Scotland, on the other hand, had a negative margin of minus DKK 44.12, which was impacted significantly by reduced harvest volumes, negatively affecting the dilution of fixed cost.

Moving on to market. According to the latest updates from Kontali, global supply increased 7% in the quarter, ahead of the harvest growth, which was 3%. A significant volume of inventories were released in the quarter, primarily from Chile. European harvest grew 5% and Norway by 3% with lower volumes in April and May, but a very strong growth in June with 15% volume growth, which also continued into July with 10% increase. Some of that volume growth is linked to biomass management within maximum allowed biomass limits. Biology in Norway was good, lower mortality, 2% higher harvest weights and 4% increase on feeding.

The Faroes had a very strong quarter with volume growth of 29%. Weights were up by 5% and feeding also increased by 2%. Americas reduced their harvest around 1%. Chile dropped 4%. There is some increased competition between Coho and Atlantic salmon. So Coho is limiting production capacity for Atlantic salmon. In Canada, there was strong development, especially on the West Coast, but also some accelerated harvest due to biological issues. Feeding in Chile and Canada were both down with 7% in this quarter.

If we look at where the volumes were sold, sold volumes increased 7%. Demand is solid across Europe, U.S. and Greater China with the sold volumes increasing 11%, 4% and 17%, respectively. If we look at the U.S. market, the local supply increased in this quarter with around 30% to around -- or corresponding to around 8,000 tonnes of whole fish equivalents, mainly supplied from Canada and North America. European exports to the U.S. declined almost 10% in this quarter, while Chilean export increased by 5%. Latin America had also strong growth with Brazil growing with 10%.

The spot price in this quarter for superior 4 to 5 kilo was NOK 74.15, broadly stable year-on-year, but 16% lower compared to the first quarter. Prices have increased now from the beginning of the third quarter, which is a bit earlier than usual, and this also has continued into August, supported by strong European demand. The large fish premium has been more or less absent for the past 3 quarters, but we see that, that is also starting to pick up again. With a tight supply ahead of us and the strong demand, we think that the market outlook in general looks constructive.

If we then move on to the P&L. We had stronger revenues and operational EBIT, as mentioned before. Revenues in this quarter, DKK 1.8 billion and DKK 3.5 billion for the first half of this year. Operational EBIT year-on-year increased from DKK 65 million to DKK 273 million and fair value adjustments were minus DKK 406 million versus minus DKK 187 million last year, affecting the profit for the period, which was negative with DKK 161 million. Operational EBIT year-to-date, DKK 816 million, close to the full year of last year. And earnings per share came out at DKK 2.31 in this quarter and DKK 7.46 for the full year -- or year-to-date.

On the balance sheet, we have a strong balance sheet, unchanged equity ratio of 58%. Property, plant and equipment has increased in this quarter by DKK 123 million, amounting to DKK 7.3 billion at the end of the quarter. Inventories have increased by DKK 448 million and account to DKK 1.2billion at the end of the quarter, reflecting increased feed and raw material stocks. Especially fishmeal inventories are high. As I mentioned before, we have security of self-sufficiency into the second quarter of next year. Biological assets were lower in this quarter due to harvest timing, salmon prices and overall biomass management.

Cash flow from operations was DKK 273 million and DKK 727 million for the first half of this year. Operating cash flow covered investments and dividends during the first half of this year. Investments remain focused on capacity, biological resilience and efficiency at a similar cash flow level as in the second quarter last year. And cash at the end of the period was around DKK 327 million. Our net debt has increased during the quarter from DKK 3.8 billion to DKK 4 billion. The increase reflects investments, working capital and dividend payments. Liquidity remains strong, supported by DKK 1.3 billion in undrawn bank facilities. And also, we have an undrawn accordion option. But then I will hand over to our CEO, Regin Jacobsen, to go through the operations and outlook.

Good morning. Let me start with what fundamentally differentiates Bakkafrost. We believe that Bakkafrost has one of the most integrated value chains in the salmon industry from feed, freshwater to farming, harvesting, processing and sales. This gives us in-house expertise and the ability to coordinate decisions across the business. And I think this is especially valuable now with the current feed market where prices have risen sharply and some raw materials are less available.

Through Havsbrún, our sourcing formulation and production expertise supported by a strong inventory position gives us greater flexibility to adapt and secure supply while protecting fish health and product quality. Knowledge is shared across the value chain to improve biological performance, quality and long-term costs. All our farming sites in the Faroe Islands and Scotland have obtained ASC certification. And the second quarter shows both sides. Our strong performance in the Faroe Islands demonstrates the potential of this model, while Scotland requires further improvements. This integrated operational model supports our resilience, adaptability and long-term competitivity.

If you then look to the FOF segment, we see another strong quarter. The feed sales were broadly unchanged year-on-year, 37.4 thousand tonnes. For the first half of the year, feed sales increased approximately 6% to 72.8 thousand tonnes, reflecting the strong biology growth in our operations. All feed sold during the quarter was sold internally. And this illustrates the increased strategic importance of Havsbrún and the farming operations, which continues to grow.

Marine raw materials accounted for 109,000 tonnes, 32% below second quarter last year. And for the first half, we sourced 161,000 tonnes compared to 269,000 last year. Consequently, there were no external fishmeal or oil sold during the quarter. Everything went to internal use and inventory buildup. Despite the lower sourcing, the operational EBIT increased by DKK 30 million to DKK 119 million, and the operational EBIT margin increased from 13% to 20%.

We are, however, seeing a clear increase in the price of marine feed ingredients and therefore, we don't see that our operation is insulated from this inflation. It gives us flexibility in Havsbrún, in sourcing formulation, in inventory management and the timing of production than most other farmers have. So our current fishmeal inventory from sourcing in the first half is expected to support feed production into Q2 '27.

Freshwater, Scotland. The key priority at Applecross remain to control, ramp up the operation. The number of smolt increased in this quarter from 0.9 million last year to 3.9 million this year. For the first half of '26, 4.9 million smolt have been transferred compared with 1.5 million last year. The average transfer weight of all Scottish smolt was 137 grams, while smolt produced at Applecross was 219 grams. The difference reflects the mix between internally produced and externally sourced smolt.

The Applecross operation is now stable. Biosecurity has improved and is strong and both the number of fish in the hatchery and the quarterly production are at their highest level so far. Capacity utilization, however, has still not reached target. We are at around 35% at the moment, expected to reach full production and full stock around second quarter next year. The operational loss was reduced from DKK 72 million last year to DKK 30 million this quarter. The key focus is consistent production, smolt robustness and post-transfer performance.

We remain on track for total Scottish smolt transfer of 10 million this year. Applecross is expected to produce smolt with between 200 and some batches up to 400 grams this year, while the average for all Scottish smolts transferred this year is expected to reach 179 grams. The continued ramp-up at Applecross is fundamental to reduce biological risk in Scotland. Larger and more robust smolt will shorten the marine production cycle and progressively improve both biology and costs.

The overall biological performance in Scotland was stable during the quarter, generally good growth and improved survivability and feed conversion year-on-year. Most sites developed well. However, a specific batch of externally supplied smolt caused biological challenges at Sgian Dubh and Loch Striven. Incident-based costs amounted to DKK 31 million compared with DKK 39 million last year. Although the absolute incident cost was lower, the financial impact per kilo was significant because of the lower volume harvested in this quarter.

Harvest volume dropped 55% to [ 3.1 ] tonnes compared with 7,000 tonnes last year. The lower volume is a consequence of our derisking strategy, while we establish sufficient production of large high-quality smolt. The average weight of harvested fish in Scotland, however, in this quarter was 5.2 kilograms. So the operational EBIT was minus DKK 139 million this year compared with minus DKK 127 million last year.

If you turn to Page 30, I can demonstrate the bridge. If you look at the Scottish numbers, the operational EBIT per kilogram declined from minus DKK 18 to minus DKK 44. Price and sales mix improved by DKK 2.6, but was more than offset by higher ringside costs, mortality impact, fallow costs. We have a lot of sites that are not being used, so fallow costs are important. So with 55% lower volume means that fixed costs, vessel costs and harvesting costs are quite high compared with the volume. Although the incident-based costs were lower in absolute terms, the negative impact per kilo is very high. And then the biological challenges in this Loch Striven smolt batch also play a significant role.

So going back to Page 20. Then we go to -- so the biomass in the sea, as we see on this graph on the bottom of the chart, is developing steady with the red curve going down. So survivability is good at the moment. So hopefully, we can see a more steady development. However, the volume will be low this year, 20,000 tonnes. Next year, we will see a much better volume. And with a better smolt size, we expect that, that will be a change in our operation in Scotland from '27.

So going to freshwater in the Faroe Islands. The Faroes freshwater operation continued to scale and remains the foundation for the future marine growth. We transferred 5.6 million smolt in the second quarter, 4% up from last year. First half of '26 transfers increased by approximately 10% to 9.5 million. The average transfer weight in the quarter was 427 grams compared with 464 last year. However, the average for the full first half increased to 467 from 447 last year. The operational EBIT was broadly stable at DKK 82 million, and the operational EBIT margin remained strong at 30%.

Post-transfer survivability continues to track at a high level and close to the upper end of the historical range. This is an important indication of high-quality smolt and a good focus with our teams. And we remain on track with our guidance of 20 million to be transferred this year. Operations in the new hatchery in Skálavík have been started. We started in June with the first eggs. And we expect to release the first smolt by end of next year, and this increases our smolt capacity in the Faroes from 18 million to 24.4 million smolt of 500 grams. So the focus is large smolt, robust smolt, shorter production cycles at sea, which lower the biological exposure and more efficient utilization of farming sites, which we also now see start to evolve in the Faroes.

So turning to Farming Faroes. The Faroes Farming operation delivered a strong operational quarter. Volume increased by 67% to 26.7 thousand tonnes compared with 16, 000 tonnes last year. The average weight increased 11% to 5.5 kilos. The operational EBIT increased from DKK 4 million last year to DKK 109 million this quarter. The operational EBIT per kilo was NOK 5.96 compared with NOK 0.37 last year. Ringside costs were reduced by approximately 4% from DKK 31.10 to DKK 29.96 per kilo.

The EBIT bridge on Page 30 shows lower ringside cost of DKK 2.66 and price impact of DKK 1.15. Strong biology, higher harvest weights and 67% higher volume provided better throughput and more efficient cost absorption. So that is the bridge from DKK 0.24 to DKK 4.06 in the Faroes. The biomass in the Faroes is around steady at 51.5, but quarterly feeding is increased by 5%. Sea lice are well controlled. Mortality remains low and improved planning of stocking and fallowing periods is contributing to shorter cycles and more efficient farming operation. So, in the first half, we have harvested 51.9 thousand tonnes, which is 54% of the full year guidance of 97,000.

The services in the Faroes had a high activity and delivered a strong financial result, increasing to DKK 35 million from DKK 17 million last year and a 15% margin, up from 8% last year. The segment includes fish transport, freshwater treatment, farming support, harvesting, packaging and waste to biogas production. These activities are not only stand-alone services. They are essential enablers for the biological operational performance of our farming operation. Our dual freshwater treatment vessels continue to provide efficient treatment of sea lice and gill-related challenges. As biomass activity increased, utilization of these vessels has also improved.

So going to the Sales & Other segment, VAP. We had a strong quarter. Revenues increased 30% or the volumes increased 30% to 29.9 thousand tonnes. Whole fish are 21% while volumes to VAP in Faroes increased by 71% to 6.6 thousand tonnes. The VAP share of the Faroes volumes increased slightly to 25% compared with 24% last year. Revenues increased 34% to almost DKK 3 billion and operational EBIT increased DKK 17 million to DKK 114 million. Operational EBIT per kilo declined from DKK 6.55 to DKK 5.60. This reflects the higher global availability of superior quality and large salmon, which continued to put pressure on prices on premiums.

Our geographical diversification continued. For Faroese salmon, the share of sales to the North American market increased to 31% share, which is probably the highest. And the share to Asia increased to 15%. The share in Western Europe declined from 52% to 47%. The Scottish sales mix was more concentrated in Europe during this quarter. This reflects also the drop in volume in Scotland in this quarter.

So going to outlook. We see limited supply growth going forward. Global harvest volumes increased in this quarter approximately 3%, while the volume supplied to the market increased by 7%. The difference was mainly related to inventory movements. The supply growth comes on top of the 18% last year. So this is a quarter with a high volume, especially because of the 18% last year. The supply outlook is now more balanced with only 1% growth in global harvest volumes in the second half of '26 versus last year. Especially the Americas harvest volumes are expected to decline by around 10% in the second half of the year, mainly reflecting the development in Chile.

Global supply is expected to remain limited in '27, constrained by biological regulation capacity limitations. Smolt transferred in Norway seems to be going slightly down next year or this year compared with last year. Together with continued demand growth, this should gradually tighten the market balance and provide stronger support for salmon prices. Demand remains strong and broad-based across markets, particularly in Asia and Europe, but we also see a strong demand in the U.S. Lower salmon prices are stimulating consumption, while underlying structural demand continues to grow. Combined with moderate supply growth, this supports a progressive tighter market balance. So with supply growth normalizing and demand remaining strong, the market balance is expected to tighten progressively and support stronger prices going forward.

Our guidance for this year remains on 117,000 tonnes. 97,000 from Faroes and 20,000 from Scotland. We have, in the first half, delivered 61.2 tonnes, corresponding to 52% of this volume. So 48% remains. The Faroes operation at 51.9 tonnes. The remaining Faroes harvest is relatively evenly distributed in the third and fourth quarter, a bit more in the fourth. Scotland harvested 9.3 tonnes in the first half and therefore, a bit more in the second half. At the moment, 6.8 tonnes are planned for fourth quarter. We also maintain the smolt guidance of 20 million in Faroes and 10 million in Scotland.

For '26, we intend to have contracts covering approximately 15% to 25% expected combined harvest volume. This provides some revenue visibility while retaining meaningful exposure to the spot market. We expect lower production volumes for fishmeal and fish oil compared with last year, primarily due to lower availability of raw materials. Feed production is expected around 175 tonnes, which is up from last year. The guidance remains dependent on biological environment and market developments.

Based on the strong Faroese performance, the Applecross ramp-up and the biomass development in Scotland, we currently maintain the volume guidance. Our DKK 5 billion investment program remains unchanged. There are some delays in some of the plans also because of the market development in '26 and '25, which has been a bit weaker than expected. But our target remains at 145,000 tonnes in '28 and 162,000 by 2030. The program includes DKK 2.2 billion investment in Faroes, DKK 1.3 billion in Scotland and DKK 1.6 billion of shared farming services. In the Faroes, the main components remaining are the Skálavík hatcheries and the feed capacity. In Scotland, the investments are covering investments in increased capacity of processing and general farming assets. So for the full period, we remain our guidance on investment. Thank you. That's all. And then we are open for questions.

Stein Aukner from DNB Carnegie. So in terms of the meal inventory you have until Q2 2027, is the volume significantly higher than normal? Or is it because of the changed formulation that you now have a longer runway? And also, what's the status on the fish oil as well?

So we have enough inventories of fishmeal and oil to cover our needs until into the second quarter next year. We have, as you know, been focusing on keeping this volume for ourselves also because of this issue or the question about certification that was also one of the drivers. Now we see also this price development. The volume is high, probably not higher than it has been some other years before at the same time. But at the end of the quarter, we had more or less full inventory. And you saw also in our balance sheet that the value of our fishmeal and oil was significant.

I think it was around 75% of the total number at cost price, of course. But as I mentioned earlier, we see that we are now in a situation which is very dramatic on the cost of raw materials. And therefore, we need to do some changes, and we are coming from a very, very high number. And with our new capacity now coming up available with our expanded new feed line, we have a better ability to mix and flex between raw materials. So we are introducing new raw materials into our feed formulation. So that will give us a better balance in our cost to take costs down.

So that's -- so the strategy now is that we still want to have a very, very high inclusion of marine ingredients in our salmon to cover the needs of our fish and to make sure that we have a product which is originating from Faroe Islands, which is special with Faroese raw materials, but we need to balance raw materials as market prices are very, very different than we ever have seen before. So therefore, our goal is to balance our feed cost going forward with more or less similar feed cost as before.

Okay. So does that mean that your 2027 cost is going to be in line with what we're currently seeing? Is that how I should interpret that?

More or less.

Christian Nordby, Arctic Securities. You've said this quarter and before as well that the externally sourced smolt in Scotland there was the problem. Why do you then stock 1 million more external smolt in Q2 year-on-year?

Good question. So we have, as you said, had big issues with externally delivered smolt. However, there have been good batches in between. But we see much lower regularity. So there is a bigger variation. And apparently, as you see, we are creating losses with this externally sourced smolt. We have reduced the externally sourced smolt compared to our plan. We have taken out batches that we think are not good, but we have maintained batches that we think are good. So we have a high focus on only sourcing good batches.

And there is a combination of volume. As you see in this quarter, for example, we have a positive EBITDA contribution. So it's also about volume. We also need to come back to 40,000 tonnes or 50,000 tonnes. At the moment, we have a plane that is stalling because we are reducing speed too much. So we need to come up in speed. And as Applecross is now coming to full capacity next year, we expect that Applecross and internally delivered smolt should be above 10 million, probably somewhere, hopefully, 12 million smolt, which will cause a good operation. So the combination of good internally large smolt, robust fish and hopefully, better batches of external smolt must contribute to this development. So hopefully, we are better to select the good batches.

And now during Q3, we've seen that Faroe Islands has gotten 0 tariffs to the U.S. Should we expect a lot more sale in that direction in Q3 and onwards?

Yes, we are increasing our sales to the U.S. You see it in the second quarter, and you will also see it going forward that we are increasing our share. This is not just because of the tariffs. This has been our strategy for ourselves that we have had very high focus on sales in the U.S. because in the U.S. is where we have the best presence in the market, best penetration, best branding of our products and therefore, also best margins.

Martin Kaland, ABG Sundal Collier. On the feed price that you talk about, is it possible to just look at how much more you pay for the blue whiting and comment on that? And if that, how much that increases your raw material cost on fishmeal, fish oil because I guess it's lower than the spot prices we see, but is it possible to comment on that?

Well, we are not in the season at the moment. The season for blue whiting catches are normally from December to May, June. So everything that we need now has been produced in the first and second quarter. And then we start a new season in the end of fourth quarter. So you're absolutely right. That's the data point.

And then for Q1 and Q2, how much more was the raw material cost up on fishmeal, fish oil for you?

Yes, that you can see in some statistics. I don't have the number, but I think the main question is what will it be next year? I don't know.

And then if the blue whiting loses its certification, do you have a plan B? What would that look like?

Well, the plan A was to build big inventories, which we have done. So therefore, we have sufficient of certified meal until we are reaching into the second quarter. And then during this phase, we have several options that we will seek for ourselves. No further questions. Thank you very much.

Good morning, and welcome to the presentation of Bakkafrost results for the first quarter, 2026. My name is Hogni Jakobsen, CFO of Bakkafrost. First, I will point your attention to our disclaimer on forward-looking statements. I will leave it for self study. It's included in the published presentation.

This morning, we will follow the usual agenda, beginning with a summary of the quarter before we move on to markets and sales, finances, operations and finally, outlook. So the first quarter was a solid start to the new year for Bakkafrost. Compared to the first quarter last year, our revenue increased by 11% to around NOK 2.1 billion and operational EBIT increased by 8% to NOK 544 million. This was achieved in the market with significantly higher global supply and lower year-on-year prices.

The main operational driver was the Faroe Islands, where harvest volumes increased by 33% to around 25,100 tonnes gutted weight. Scotland was broadly stable in volumes at around 6,200 tonnes. Feed sales also increased by 13% in the quarter, reflecting a strong biological growth in the farming operation. At the same time, fishmeal sales and marine sourcing were lower, around 51,000 tonne of marine raw material were sourced in the quarter.

Cash flow from operations declined to DKK 453 million, down from DKK 590 million the year before. And at the AGM, in end of April, the dividend payment of DKK 3.45 was approved for payment around 21st of May. The group delivered an all-inclusive margin or operational EBIT per kilo of DKK 17.35 per kilo compared to DKK 20.07 in the first quarter last year. Faroe Islands generated DKK 22.76, slightly weaker than last year. Scotland recorded minus DKK 4.58 compared to a positive margin of DKK 11.22 in the same quarter last year.

Now with that, regional margin picture established, we can move on to market and sales, starting with the supply side, how much salmon came onto the market and which regions drove the supply. Global harvest volumes increased by 12% year-on-year, while total sold quantities increased nearly 15%. This was a substantial supply increase, and it came from both Europe and the Americas. Europe grew by 10%, with Norway also up around 10%. Norway had good biology, harvest weights were up 11%, reduced mortality and generally strong growth with feed sales increasing 5% in the quarter.

In the Faroe Islands, we grew almost 20% in Harvest. The fish were large. We had 13% in increased feed sales -- sorry, 19% in increased feed sales, which was driven by strong growth with large smolt. Iceland also showed a particularly strong percentage increase, but from a smaller base. In the Americas, the supply increased 19%, led by Chile, which grew more than 20%. Chile had a flat biomass development through the quarter, though. So it's the growth that has been harvested. Feed sales were slightly down in Chile, minus 4%, and a slight increase in harvest rates. So overall, a strong extra supply coming to the market.

And if we then move on to the sales and see where -- in which regions, which part of the markets that extra volume was absorbed. Demand was broadly stable across. Total sold volumes increased by 14.6%. And as the largest market, Europe and the U.K. grew by 12%. This was slightly above the European supply increase of 10%. The strongest growth was in Asia and Latin America. Greater China increased by impressively 55%, ASEAN by 25% and Latin America by 30%. A large share of the extra supply that came from the Americas went into Asia and Latin America.

The U.S. market was more moderate in growth, 4% increase, partly affected also by a weaker dollar, lower purchasing power for consumers. If you look at the Norwegian sale to the U.S., there was a drop of around 30%. This demand and supply, of course, had impact on salmon prices. Average spot prices in the quarter for superior 4 to 5-kilo fish was NOK 87.95 per kilo, which was 5.2% lower than the same quarter last year, but 7% improved compared to the previous quarter. Higher overall supply affected the prices, and in addition, there was more supply of large fish coming to the market. So the price gap between small and large -- large fish premium, which is -- it's also referred to as [ trinkth ] quite significantly in the quarter.

If we then move into finance, starting with the profit and loss. Revenues in the quarter increased from around DKK 1.9 billion to DKK 2.140 billion, an increase of DKK 214 million. Operational EBIT increased from DKK 505 million to DKK 544 million. Fair value adjustments were positive with DKK 30 million -- DKK 13 million compared to negative DKK 376 million in the same quarter last year. And profit after tax was DKK 307 million compared to negative DKK 6 million in the same quarter last year. Adjusted EBIT -- adjusted earnings per share was DKK 5.16 per share, and in that respect, this quarter was the strongest since the first quarter of 2024 for Bakkafrost.

On the balance sheet, it remains strong at the end of the quarter. Total assets increased slightly to DKK 19.2 billion, with equity increasing by DKK 305 million to DKK 11.3 billion. Equity ratio improved from 58% to 59%. Property, plant and equipment had a modest increase of DKK 35 million. Biological assets were broadly stable at around DKK 3.4 billion, while inventory increased slightly. Receivables increased by DKK 224 million to around DKK 1 billion.

On the cash flow side, from operations, we had a cash flow of DKK 453 million compared to DKK 590 million in the first quarter of '25. This was a decline of DKK 137 million, but still represents a strong operating cash contributions. Cash flow from investments improved from minus DKK 304 million, to DKK 260 million -- minus DKK 216 million. And financing cash flow also improved significantly from DKK 516 million to minus DKK 167 million, so from minus DKK 516 million to minus DKK 167 million. So together, these movements resulted in a positive net change in cash of DKK 17 million, which left us with DKK 370 million in cash at the end of the period.

This leads us to the development in our net interest-bearing debt, which decreased during the quarter from around DKK 3.9 billion to DKK 3.8 billion, a reduction of DKK 135 million . Liquidity remains strong. Undrawn credit facilities were around DKK 1.6 billion at the end of the quarter. And then we have an accordion option of DKK 150 million in addition to that.

And then I will hand over to Regin to go through the operations and outlook.

Good morning. Bakkafrost has value chain second to none in the international salmon farming environment, full control from feed production, including fishmeal and oil, genetics to sale. The value chain gives Bakkafrost control, flexibility, efficiency, differentiation, best traceability and resilience. When we move to the FOF segment in the first quarter, the most important is that our FOF operation supports the biological growth in our farming operations with healthy salmon. Low marine sourcing in this quarter due to seasonal patterns affected the results.

The feed sold increased 13%, up to 35,421 tonnes. 100% of the feed was sold internally. This is, of course, due to higher biomass and better growth. Marine raw materials sourced was 51,199 tonne, down 53% from last year. External fishmeal sold was only 1,200 tonnes, 67% down from last year. Operational EBIT for the FOF segment was to DKK 84 million, up 29% versus last year. And the margin was 15% versus 13% last year. Feed sales are growing, which is directly linked to record biomass at sea and strong growth.

Margin improvement up to 15%, good cost control and, of course, related to high efficiency and the capacity utilization. Less external fishmeal sales, which is -- means more are used in-house. Raw material sourcing is, of course, the big issue in feed in general. Costs are going up going forward. Raw material prices have come significantly down from '23 when picked but the trends are upwards going forward. However, volumes are increasing, which are improving our efficiency, and we lift our target this year by 10,000 tonnes up to 175,000 tonnes for the full year. And we will continue our focus on the best feed quality and the best feed composition for FCR and fish health.

However, we see better sourcing in April and May. So year-to-date, until today, we have sourced 130,000 tonnes. So a bit better in April and May, but we are still behind last year. The FOF segment remains a key competitive advantage for Bakkafrost being self-supplied with increased flexibility in feed operations, especially with the new factory coming into operation from June. The yearly international Blue Whiting Spawning Stock Survey was conducted in April, a few weeks ago in International Waters and in Faroese Waters by scientific research. This '26 Survey showed 32% biomass increase in stocks, whereof 83% of the whole stock is younger stocks, which supports continued growth in the stock. So could be an early indicator of a healthy biomass at least going forward. We will see what that leads to for next year.

Then moving to fresh water, Scotland. The key priority is steadily controlled ramp-up of Applecross. We are prioritizing biological stability and smolt quality. In this quarter or -- in this quarter, we see 1 million smolt being transferred, 67% up from last year. Average weight all smolt 208 gram, 29% up. Average weight for Applecross was 269 gram. And the operational EBIT was minus DKK 28 million. And this reflects both an issue in operation in the quarter with electricity, causing some technical issues in the quarter related to the new operation, and also increased depreciation because of the size of the investment and only 30% utilization of the new site yet.

We are happy that the volumes from Applecross are increasing quarter-by-quarter, and we see now a clear upward trend. The Applecross biomass is now the highest ever. Right now, 9 million pieces in the biomass. At the peak, we should see 18 million pieces, but also at higher average weight that we see right now. Focus is steady ramp-up, not volume at the moment, but high quality. Applecross is set to produce 200 to 400 grams smolt in 2026, which gives flexibility in the production planning. The negative EBIT is expected to turn positive within the ramp-up phase. We expect improving biological outcome step by step, and we expect an average weight from Applecross about 200 gram during this year.

We see that the share of large smolt is now increasing steadily in Scotland. This is our cornerstone of the derisking strategy in the Scottish farming operation. Large smolt, shorter sea phase cycles, less exposure to the risk. Once at full capacity, this will fundamentally change our risk picture in Scotland. We see now the first batches of smolt coming out within 12 months, which is -- which means lower mortality, better average weights and the better feed conversion rates.

The farming -- sea farming operation in Scotland is improving biologically, good growth, stable condition, lower mortality. And -- but in this quarter, the issues are mainly low prices and low volume, no scale. So that's the big issue. The harvest in this quarter was 6,198 tonne, flat from last year. The average weight is pretty high, 6.4 kilos, however, minus DKK 63 million in EBIT. And this is due to low prices and low scale, half and half on both, I would say. Mortality improved year-on-year, tracking well below recent years. We are happy about the development in biology. It was a good quarter across most sites, strong harvest weights, sea temperatures are normal.

But the big issue was the lower prices and low volumes. We have 2 sites right now where -- they were both stocked in July last year. One of them is now 3.5 kilos in average, will be harvested out in July this year. This was 250 gram smolt from Applecross. Then we have another stock which were stocked at the same time at 90 grams external smolt, now 1.6 kilos. The Applecross stock is 4% losses. The other one is 11.6% losses right now. Both will be harvested at the -- or planned to be harvested at 6 kilo. As said, Applecross stock will be harvested in July this year means that there should be a low risk for those fish. The other one will be harvested from December to February next year, but they were both stocked in July. So that's illustrates a bit the difference with larger smolt.

And we see that with 250 gram, we see that we should be able to harvest the fish within 12 to 14 months. At least in this case, it's 12 months. So we are still positive on the case, but still need to improve that we can deliver. Freshwater in Faroes, better, larger and cheaper in this quarter. This is the engine behind our strong biological performance at sea. In this quarter, we transferred 3.9 million smolt, 22% up, average rate 527 gram, 25% up. Operational EBIT from the segment was DKK 90 million, 61% up. The smolt cost despite larger, 10% down.

We are particularly happy that we are hitting on all 3 dimensions: larger smolt, higher volumes and lower cost. The 90-day post-transfer survivability improved, clear evidence on better smolt quality and robustness, '26 survivability tracking above 21 to 24 range. All hatcheries are performing well. And we are working on reaching our goal for this year on DKK 20 million of internal transfer smolt to our farms in Faroes. We are increasing capacity utilization across all hatcheries in Faroes. This is also the key of low cost, continues focusing on smolt quality, not just about size, but robustness and post transfer performance.

The new Skalavik hatchery is progressing well, planning to start the eggs now in June. And then first, transfer by the end of next year in '27. That will bring our total capacity up to DKK 24.4 million at 500 gram. The trend has been clear. We have gone from 300 gram average in '23, up to 527 gram in this quarter. We see clearly that larger smolt gives much shorter time in sea, less exposure to risk and better cost profile in the sea. This is a structural competitive advantage that will continue to improve. And this is the foundation for us to reach 107,000 tonnes in Faroes in the company this year, also Faroes and Scotland combined. Yes.

So coming to Farming, Faroe Islands. Farming delivered an excellent quarter, significantly reduced costs and a strong biological performance. The investments in fresh water, small quality are clearly paying off at sea. Harvest volumes, 25,139 tonnes, 33% up from last year, average weight 5.8 kilos, 14% up. Operational EBIT, DKK 386 million, up 2%. The margin, 28%, ringside costs, 13% down. And this quarter, we harvested around half of the fish was from Fuglafjørður, where many of you have been, half of the fish, 13,500 out of 25,000. And then around 10% was from A71 that's Funningsfjørður and same from [indiscernible] and Kunoyarnes and 5% from [indiscernible]. So 6 sites harvested in this quarter, all performing well.

So I am very happy to see that costs came down 13% in this quarter, driven by larger smolt, better growth, operational efficiency, ringside cost now down at DKK 26.95 down from DKK 31.15, 1 year ago. Volume growth, 33%, harvested from record high biomass built through '25, very strong growth at sea. The combination of low cost and high volume is, of course, a good combination, and this capacity utilization, that's also really important. And this is also key for our biological discipline and cost discipline, not compromising on fish health for volume.

We will continue to optimize stocking patterns and harvest planning. Further cost improvement expected as small size continues to increase. However, we see a strong foundation for the coming quarters, with 57,000 tonne biomass at sea, feeding volumes up 30%, which indicates continued strong growth ahead. Structural cost advantage from integrated value chain and large smolt is now delivering. And we are well on track in '26 to target our delivery on volume, and that's why we increased our target from 92,000 to 97,000 tonnes for Faroe Islands.

And then services. Services is a lot of different things, transports, farming supports, harvest packaging, biogas, et cetera. We have a solid underlying performance in this segment. But in this quarter, we have a one-off cost, which is taken out of the EBIT. So the EBIT was DKK 41 million ,8% up. One-off was DKK 17 million, which is write-off of delousing equipment, which was made obsolete by dual fresh water treatment. So this works well, and therefore, we have written this old equipment off.

We are happy about the strong development in the quarter. The dual freshwater treatment works really well. And therefore, we don't need the other equipment. The high activity across all services, transport, treatments, harvest, packaging, biogas. Actually, biogas delivered 61% more green energy in this quarter, 3.3 gigawatt hours of electricity and the district heating to the [indiscernible] versus 2.1 gigawatt hours last year. We are working on scaling the service capacity in line with the growing harvest volumes, continued efficiency in the dual fresh water treatment, reducing need for mechanical delousing, waste to biogas product production, circular value from the processing byproducts, and focusing on the service fleet and infrastructure to keep the pace up to our goal of 117,000 tonnes in 2030.

We see a stable good operation, enable strong with in our farms and competitive assets to protect and sustainable growth strategy. So coming to sales and other segment. And this includes our VAP operation. Market conditions improved through the quarter, high volumes have been sold. We are actively diversifying our operations into U.S. and Asia. In this quarter, we sold totally 31,337 tonne gutted weight, 24% up from last year. Head on gutted, 25,432; VAP, 5,905, 34% up. So operational EBIT was DKK 47 million, which is 12% up. NOK 2.37 per kilo, EBIT margin, I would say, pressured from high supply. But we are happy to have been able to sell this volume, especially of very large fish, which was a bit complicated.

We had a lot of impacts of bad weather in the quarter. That impacted our ability to reach our premium markets and our premium prices because we had to replan in many, many weeks in the quarter, that was an issue. Our VAP share is stable, around 23%, maintaining premium positioning. We see strong developments in all markets but challenged by the global supply growth. Increased global supply put pressure on premium prices, especially in some markets. We are working on increase our share to high-value markets, product development, new products, focusing on new markets also, balance the flow across markets to reduce exposure on any single region. The market seems tight looking forward, and that will support stronger prices.

I'm coming to the outlook. The supply picture seemed more tight, more limited growth expected. Now when we look forward, the biomass is tight, as Regin mentioned, around the globe. And after a period with elevated supply, the market is tightening up. Low supply expected the remaining part of the year. We have around 14% supply growth behind us in a market where we expect around 2% for the full year. So the -- as we see on this graph, the last half of the -- H2 '26 is flat or 0 growth, in Americas, actually negative. So there will be tighter supply in front of us.

In the first quarter, we saw 680,000 tonne supply coming up from 590,000 to last year. So that was a big volume increase in the first quarter in a year where it should be relatively flat. So it will be very low going forward. And for Bakkafrost, we see our clear growth trajectory, 117,000 tonne harvest target for this year versus 107,000 last year, well on track after a strong Q1 delivery. Faroe Islands lifted up to 97,000 from 92,000 and Scotland remains on 20,000, where we have delivered 31,000 in the first quarter. The quarterly profile relatively even in the Faroes between 23,000 and 25,000 per quarter. Scotland lower in the second quarter, but then -- in the third quarter and then ramp up in the fourth quarter.

Fresh water plan in '26 remains at DKK 30 million, Faroes DKK, 20 million and Scotland DKK 10 million, which is 15% up from last year when it was DKK 26 million. And that supports also a continued growth and biomass built up. And this is not only in the numbers, it's also the average weight of the smolt because they will be larger, meaning that the cycle will be shorter. On contracts, we intend to contract between 15% and 25% of expected harvest volume. But in general, the contracts are shorter than they used to be.

Fishmeal, oil and feed, we expect lower production volumes of fishmeal, oil and feed in '26. We expect feed production up to 175,000 tonnes up from 165,000, which was our previous target. So we lift our target 10,000 tonnes. And this is all based on internal consumption. And the long-term targets from our CMD in June last year remains intact, CapEx around DKK 5 billion for the period '26 to '30. Harvest target in 2030 of 162,000 tonnes, And so this year, 117,000 and investment of around DKK 5 billion in this period to reach our target in 2030. So we will focus on our disciplined execution, growing at pace, biology and market support, and we will, of course, focus very much on cost discipline and especially now when we see the feed cost going up on our ability to balance our feed operation and that balance will improve with our new feed plant coming into operation now in June.

So that was everything from this presentation, and we are open to take some questions if there are any.

Alex Aukner from DNB Carnegie. So just on Scotland, you seem fairly content with the biological performance and you say costs will be lower at scale. So how much lower at scale? And what is your definition of at scale?

So at the moment, we have an operation in Scotland, which is -- we have made some improvements, but we have not scaled the whole operation down to 20,000 tonnes. So we have an operation that in many areas are built for 40,000, but are producing 20,000. So when you compare the cost difference between Faroes and Scotland, you see maybe this quarter, it was really high, but over a longer picture, maybe DKK 20 in difference. I believe that there will be some difference also in the future, but maybe 3/4 of that should be eliminated when we are producing at scale. So half of that will be improved with lower cost and half of it will be improved with better biology in Scotland.

There are many examples if you go through the breakdown of costs. But for example, a lot of fixed costs means today that per kilo, they are 4x higher than, for example, in Faroe Islands or 5x higher than Faroe Islands because we have a lot of assets that we need, but the volumes does not reflect them at the moment.

That's very clear. One other question on the raw material price, which you say will mitigate some of the good cost positions. When will the higher raw materials hit your P&L?

On the feed?

No, on the guidance, you basically say that going forward, higher raw material prices will impact costs.

Yes. High raw material prices on the feed. Yes. So we have a cycle of around 12 months in the sea now where maybe the latter 6 months will -- is -- so what we harvest in the first quarter this year is a result of the feed that we used over the last 12 months in the sea. And that means that if the feed prices are going to increase in the second half of '26, that will especially impact early '27, late '26, but especially '27. We will, of course, need to see what we can do to mitigate some of the increase, but there will be an increase of feed cost as it stands at the moment, especially marine ingredients have increased significantly lately.

Henrik Knutsen, Pareto Securities. You mentioned 6 sites in the Faroes being harvested and doing well. Can you say something about the sites you plan to harvest from in Q2?

So first quarter was very, very low in cost. And these are average sites, I would say, -- maybe Fuglafjørður, which had 50% of the cost in this quarter was good, but there were no bad sites. There are no bad sites. But we will see when we go forward, as Alex asked about that, especially at the end of this year, we expect that cost will come up. We also expect that during this year, the cost will be higher than in the first quarter. I think the first quarter was lower than we will see going forward in '26 in the next quarters. There will be a few krones higher costs going forward, a few krones.

And also, you mentioned Freshwater Scotland breaking even when you ramp up, when do you see that inflection point?

We had some extra costs in this quarter. We should not see that in the future or at least much lower. And then as we gradually, during '26 will come from 30% capacity utilization maybe up to maybe 80% at the end of the year. I would say that we should expect later in '26 to see positive margins from freshwater.

Christian Nordby, Arctic Securities. You say you're today at 9 million smolts in Applecross and you should peak around 18 million. When do you expect that to hit?

So I believe that full biomass at Applecross will be around second quarter '27.

Martin Kaland, ABG Sundal Collier. Could you mention how much feed prices have increased or based on the current raw material prices that you now see?

Well, in the second quarter, they increased slightly from the first quarter, but the marine ingredients have increased significantly now because of the low quotas in Peru. So that's in front of us. So we have not seen yet a very, very big increase in feed prices.

And how could that also impact your feed operations, feed segments, for example. Do you have inventories of fishmeal, fish oil at lower raw material costs that will be sold to the farming segment so that you expect increased margins in the feed operations, although lower in the farming segment? .

Yes. Of course, in our FOF segment, the way we calculate is that we do our internal pricing at market from the fishmeal and oil to the feed. So the feed -- so there will be a margin on the internal meal and oil segment into the FOF, but that's within the FOF segment. But in between there, there is a margin, but that goes out on the eliminations. But we have an internal inventory, which reflects much of the use that we have in '26, which means that there will be an internal margin in the FOF segment if prices go up.

But that goes on the eliminations, and that means that balance sheet is not affected by that, most of the year. Then at some later point, there will be an increase if raw materials are going more up.

And does that mean that the EBIT margin you now have in the FOF segment is what we expect also for the coming quarters?

That's a difficult one. I believe that there is a risk that the margins can come down, especially if the raw material situation is challenged, which looks to be the case this year. So there is a risk that it could be a lower margin.

Very good. Thank you very much.

2025 webcast here from Oslo. My name is Hogni Jakobsen, CFO of Bakkafrost. First, I'll ask you to pay attention to our disclaimer regarding forward-looking statements, which is included in the published presentation. This morning, we will follow the usual agenda, starting with a summary of the quarter before we move into markets and sales, financials, operations and outlook. And there are a number of appendices also included in the presentation.

So in the fourth quarter, Bakkafrost had revenues in excess of DKK 1.8 billion and an operational EBIT of DKK 295 million. Harvest in the Faroes increased 40% to 23,300 tonnes approximately. And in Scotland, we increased harvest with 19% to 4,600 tonnes. Our FOF division, fishmeal feed and oil in the Faroes increased the sale of fishmeal -- sorry, fish feed with 22% to around 47,000 tonnes. And fishmeal sales were up with 51% to around 2,400 tonnes. Sourcing of marine raw material slightly down from same quarter last year and came out at around 40,000 tonnes.

Cash flow from operations were positive with DKK 447 million compared to DKK 68 million last year. And all segments were positive on EBIT, except for the Scottish Farming and Freshwater segment. The Board of Directors proposed to the AGM a dividend payment of DKK 3.45 per share. In this quarter, the all-inclusive margins for the group as a whole were DKK 10.59 per kilo. In the Faroes, the margin was DKK 16.81 per kilo. And in Scotland, we had a negative margin of DKK 21.11.

If we move on to markets and sale, and beginning with the price development. In Q4, the average spot price for superior 4 to 5-kilo fish was NOK 82.23 per kilo. This was a year-to-year increase of 1.8% and a quarterly -- quarter-to-quarter increase of 29%. The price recovery were primarily happened in the second half of the quarter. However, price differentiation by size continued to compress as the market was more supplied with large fish. So the 6 to 7 kilo premium compared to 4 to 5 kilo was only 2% and small fish 2 to 3 kilo still traded at a discount of around 10% compared to 4 to 5 kilo fish.

If we look at the global markets, according to the latest update from Kontali, global sold volumes increased 8% year-on-year, reflecting continued growth in overall salmon consumption. Consumption in the EU and U.K. was broadly unchanged and below the European supply increase of around 2%. So an indicator of a well-supplied market with limited demand growth in the quarter. The U.S. remains one of the strongest demand market with a consumption increase of 13% in this quarter. Growth was supported by higher supply from the Americas, while tariffs continue to influence consumer prices.

A large share of the incremental supply in the quarter was absorbed by Asia and Latin America, and particularly, China continued to show strong demand for salmon in this quarter. So overall, demand growth remained intact globally, but growth was concentrated outside of Europe, underlining the importance of market diversification.

Global harvest increased 9% in this quarter year-on-year, primarily driven by improved biology, but also larger smolt starting to play a role in the supply. There was limited contribution from Europe and a strong rebound in the Americas. Norwegian harvest was broadly stable in Q4 after a strong growth earlier this year. Harvest weights increased 6% in Norway to 4.22. Larger smolts, warmer seawater, improved biology have contributed to increased biomass turnover. And mortality continues to improve and downgrades are trending down in Norway, and it reached around 12% in 2025, which is the same level as in '22.

The Faroe Islands delivered a clear step-up when it comes to harvest volume, a 62% increase compared to same quarter last year. Again, large smolt is a significant contributor to this development, giving a higher turnover on the biomass. Smolt weights were above 500 gram in the Faroes, harvest weights around 5.5 kilo and sea lice were well under control in the Faroes and mortality low.

Chile rebounded strongly after week 24. The harvest was up 27% in the quarter. If we look only at December, it was 36% up, supported by higher feeding, good biology and improved harvest weights and low mortality as well. Canada, U.S. increased harvest mainly due to incident-driven harvest and normal variation and also following weaker years in the past. When it comes to growth measured in feeding, the one in this quarter with a 32% increase in feed volumes, followed by Iceland with a 20% increase and Chile comes in third with a 15% increase. Feed sales in Norway increased 6%.

Then moving on to financials and starting with the group P&L. Revenue increased from DKK 1.470 billion this quarter to DKK 1.847 billion and operational EBIT increased from DKK 280 million to DKK 295 million. Fair value adjustments, DKK 570 million and revenue tax in this quarter amounted to DKK 52 million in negative. Profit after tax, DKK 591 million.

If we look at operational EBIT for the full year, it came out with DKK 888 million. And adjusted earnings per share in this quarter were DKK 2.6 and -- sorry, DKK 6.9 for the full year. And as mentioned before, the Board of Directors proposes that we follow our dividend policy, which is that 30% to 50% of adjusted earnings per share is paid out as dividends. We have a track record of being at 50%, and that's the same that is being followed this time. So DKK 3.45 per share as dividends.

On the balance sheet, since the year-end '24, we have increased our property, plant and equipment by DKK 403 million to DKK 7.1 billion. Fair value of the biological assets at the end of the quarter amounted to DKK 3.4 billion. Inventories have increased to DKK 790 million and receivables have also increased to DKK 824 million. Cash and cash equivalents were DKK 300 million, and the equity ratio was 58%. Another change in this quarter, which you might have noticed is that long-term leasing debt has increased from DKK 234 million to DKK 798 million. These are due to renewed leasing contracts on vessels in Scotland.

Moving on to cash flow from operations. Cash flow were positive with DKK 448 million and negative from investments with DKK 282 million. Cash flow from financing was also negative with DKK 152 million, and we had a net change of cash of positive DKK 13 million. And during the quarter, we have decreased our net interest-bearing debt to just short of DKK 3.9 billion. The fourth quarter is a quarter in the Faroes where taxes -- corporate taxes are due. This has also affected the development on net interest-bearing debt in this quarter with DKK 188 million. And at the end of the quarter, we had undrawn credit facilities of around DKK 1.5 billion.

Then before handing over to our CEO, Regin Jacobsen, I would like to highlight 2 recent ESG achievements that we are particularly proud of. Both of them are based on independent global assessments. First, we have achieved A List status with the CDP in their forest rating and being rated with an A with CDP, places us amongst the top 4% of companies globally assessed by CDP. So it reflects strong transparency and a leadership in this area.

And secondly, we have also entered the Corporate Knights Global 100 Most sustainable Companies. Bakkafrost was ranked #2 in food and beverage manufacturing and #83 globally across all industries. So together, these recognitions confirm that our sustainability efforts are delivering results and that Bakkafrost is performing at high standards comparing also to global peers.

And then it's over to Regin Jacobsen to go through the operations.

Thank you very much. Before going into the quarterly numbers, I would like briefly to reiterate the scale of our operations and what fundamentally differentiates Bakkafrost with the global salmon farming industry. Bakkafrost's fully integrated value chain provides control, flexibility, efficiency and resilience across the entire operation. Our activities span from fishmeal and fish oil production through feed, smolt, biogas farming, farming service vessels, harvesting, processing, packaging and sales and distribution.

The core message is that we convert low-value raw materials into high-value, healthy protein at scale, delivering millions of nutritious meals to the global protein market. Our mission is to produce healthy, high-quality seafood products by leveraging our competitive advantage across the whole value chain. This is reflected in our key figures.

In 2025, we had 1,635 full-time employees, revenues of approximately DKK 7 billion and an operating EBIT of around DKK 900 million. A significant share of our employees work in remote locations and small local communities, where stable employment contributes to maintaining local activity and long-term settlement across both Faroe Islands and Scotland. Our market capitalization is approximately NOK 30 billion, and we expect to harvest around 112,000 tonnes in 2026. We achieved a feed conversion ratio of 1.10 in the Faroe Islands and 100% of our production in the Faroes and 97% in Scotland is now ASC certified. We have set clear climate targets aiming to reduce Scope 1, 2 and 3 emissions by 50% by 2030 and to be net zero by 2050.

Then the segments. The FOF segment in this quarter had strong feed sales, which support our strong biological growth. In the FOF segment, we saw in the fourth quarter feed sales increased to 47,000 tonnes, an increase of 22% compared with the same period last year. At the same time, the sourcing of raw materials decreased 5% to 40,000 tonnes. And the operational EBIT in the FOF segment grew 11% to DKK 73 million, although the operational margin decreased slightly. We also note that the downward trend in the raw materials cost has stopped, especially for the marine ingredients, which are trending slightly up as the graph shows in the bottom left.

Moving to the Faroese freshwater operations, which have a strong and stable operation, continuously improving quality and survivability. The Freshwater segment has been quite strong over the year and also in the fourth quarter. Investments in increasing capacity, together with strong procedures have provided us with larger smolt, higher volumes and also better performance. This has led to stronger biological growth and better long-term prospects in the farming operation. We continue this development to increase our smolt production.

In the fourth quarter, we transferred 5.3 million at 485 gram and for the full year, 18.7 million smolt with an average weight of 453 gram. In '26, we expect to increase this to 20 million smolt. The improvement in the operation are reflected in more robust smolt, which we can clearly see in the first 90-day post-transfer mortality and larger smolt. The operational EBIT in the freshwater segment for the fourth quarter was DKK 102 million, and the operational margin was 37%.

Moving to Freshwater Scotland. In the fourth quarter, we transferred 2.2 million smolt whereof -- versus 1 million last year, but internal transfer from own hatchery was 1 million versus 0.7 million last year. The average weight of internal transfer smolt was 173 gram versus 167 last year. The margin was minus DKK 4 million versus DKK 28 million last year -- minus DKK 28 million last year. The negative result is primarily driven by a combination of low capacity utilization and some losses. I think in this quarter, the average utilization was around 3 kilo per cubic meter, and we aim for 12. So we are still quite low.

In Scotland, the main focus is to achieve a steady ramp-up of the production. The red line right in the bottom shows this ramp-up is progressing, and this will continue through the whole 2026, and we expect to be at full biomass in the first quarter in '27. This means that gradually, we will see lower cost per kilo produced smolt during the next 15 months. At the Applecross hatchery, the operation are moving -- are more stable now. Biosecurity has been improved, and the focus now is to ramp up the operation. We plan to transfer 10 million smolt in '26 in Scotland with Applecross set to produce batches of 200 to 250 gram and some batches between 350 and 400 grams. So that will be a combination. The average weight for all smolt released in '26 is expected to be 179 gram in Scotland. Although the operational EBIT in the fourth quarter was negative, we see clear progress compared to the same period last year.

The farming operation in the Faroe Islands was quite good in the quarter and also in the year. There were very good biological performance, but low prices on salmon. The ring-side costs have dropped 8% in the quarter. And the biggest driver actually in the quarter versus last year was actually the smolt cost, which had 70% of the reduced -- of the reduction.

As the smolt utilization in the Faroes has been increased, the cost is coming down. But this is also driving a better survivability, which is also a driver for reduced cost. The survivability in this quarter was 98.4% versus 97.9% last year. This means that the mortality is 22% lower in this quarter compared with last year. So in the Faroe Islands, which are the lowest mortality in the world, Bakkafrost has the lowest mortality in 2024 -- 2025 and also in the fourth quarter. This drives all costs down. And as said, a combination of lower smolt cost and low mortality cost.

Higher growth is also a driver. The temperature in this quarter was 0.7 degrees warmer than last year and gives better growth. And in this quarter, as Hogni mentioned, the growth was 34% higher than in the same period last year and the feed volumes increased 49%. And that corresponds to 12,000 tonnes of fish.

Size of harvested fish in this quarter was also really good. 5.6 kilos versus 5.3 last year, so 300 gram up. So strong growth in the fourth quarter -- and this led to better performance, better operational EBIT driven by higher volumes and good cost control. The total harvest volume is 23,300 tonnes, and the EBIT from the Faroese Farming segment was DKK 171 million with a margin of 15%.

Moving to Scotland. In Scotland, the biological performance has improved with the exception of the Portree farming site, which had an impact of the case in the third quarter, which also impacted into the fourth quarter. If you exclude Portree from the fourth quarter, the average harvest weight was 5.9 kilo in Scotland. But when we include the 900 tonnes of 2.3 kilo fish that was harvested from Portree, the average comes down to 4.3 kilo.

Growth and performance has actually improved in Scotland versus the marine operation. The exceptional mortality was booked at DKK 55 million, which mainly came from Portree. And this, combined with low prices and low capacity utilization means that the Scottish Farming segment had a minus on the operational farming EBIT of DKK 110 million. Larger and healthier smolt will gradually reduce the marine cycle down to 14, 15 months versus 20 months at the moment. Therefore, 2026 to 2027 will mark a transition towards a more robust and healthier biomass buildup.

Like in the freshwater, also in the marine, we are now starting the building up of biomass in Scotland. And with all freshwater facilities now operating disease-free, the same standards and procedures are being systematically implemented across marine operations. We have to start with the eggs and then eventually end up with the largest fish being disease-free. Therefore, we have very high focus on early pathogen detection, proactive risk mitigation, high biosecurity standards and visible leadership. In the appendix, I think it was on Page 31, there is a graph showing the importance of the scale where we compare Faroe Islands and Scotland. Highly robust and fish together with the scale will transform the Scottish operation in the future.

So going to the Service segment. In the Service segment, we see that the conversion of vessels for transfer of smolt has a significant importance for our operations. This is the first stage of the operation, and it's really important for a good start in the life for the smolt. This segment includes fish transport, treatments, farming support, harvesting, packaging as well as biogas. And talking about biogas in '25, we actually produced 16.4 megawatt hours of electricity to support the Faroes electric grid. This was 3% of the total electricity production in the Faroe Islands.

However, a part of it goes to electricity and a part of it goes to district heating, but it is not to be negligible. It is a good support. So Forka supplies around 50% to the electrical grid and the rest of district heating. The conversion of Martin and Bakkanes completed in the third quarter '24 and third quarter '25, are now in steady improvement and increasing smolt survivability. The operational EBIT in the Service segment in the fourth quarter was DKK 31 million with an operational margin of 13%.

In the sales and marketing, a strong Bakkafrost brand and large salmon, together with good market differentiation helps us in challenging markets despite that it has been more challenging to get the premiums that we normally get. An increased supply of superior quality salmon from Norway and larger and more availability of large fish in general in '25 has put pressure on margins and premiums. The operational EBIT for the Sales & Other was DKK 77 million in the fourth quarter, 36% down from last year.

The large and important markets are EU, U.S. and Asia, especially China. All these markets have underlying strong demand. However, there are different structural impacts ongoing, shifting volumes between markets. Asia seem to have exceptionally high growth momentum and seem to continue this exceptional growth rate that we have seen now for 2 years continuously opening new factories and setting up new logistic systems to source more salmon. So this will continue and the growth will continue as it seems.

The tariffs on imported salmon to the U.S., together with unpredictability about what might come seem to have impacted trade flows negatively, especially to the U.S. However, the underlying market demand is definitely very strong. And for Bakkafrost, we see a strong demand also in the U.S. for our products. So we expect that our growth in the U.S. will continue. And for Bakkafrost, as we grow, the growth must be absorbed through geographic, product and channel diversification to protect pricing and margins.

So coming to outlook. The higher supply in the first half of '26 seems to drop to no growth in the second half of the year according to Kontali's last updates. Estimates have been adjusted slightly upwards over the last 3 months as we see the difference between the dotted line and the red line on the graphs here. Higher temperatures and better biology have increased volumes. The global supply is very much set by Norway and Chile, which combined supply 79% of all the salmon into the market.

The numbers of transferred smolt in Norway has been more or less flat the last 3 years, around 423 million fish. And in Chile, a small increase of 3% from DKK 175 million to DKK 180 million. Therefore, the increase in the global supply is mainly driven by improved productivity, which in general is positive for the industry. Reputation is good or improving when biology and biosecurity is improving. So this is a good development.

Strong supply from the Faroe Islands and Scotland and Ireland have obviously contributed to the higher growth. Despite Faroe Islands are small in the universe, we have contributed to the global supply, increasing production 29% in '25, up to 116,000 tonnes from 90,000 gutted weight. Norway continued in January with strong supply growth of 20% this January compared with last year. And the Faroe Islands in January this year also increased 22% from 9,000 to 11,000. So global supply growth in coming months is expected to come down if we should maintain the 5%, 6% growth in the first half, where we already have 20% in January. So overall, we anticipate moving from an oversupply into a more tight market from the second quarter of '26 and also into '27. The graph shows the expected harvest volumes in Europe and Americas.

For Bakkafrost, we continue our growth trajectory. In '26, we plan to harvest 112,000 tonnes with 92,000 from Faroe Island and 20,000 in Scotland. The harvest will be distributed fairly even across the quarters. Smolt transfers are planned at 30 million for the full year, contract share around 15% to 20%. The FOF segment expects around 165,000 tonnes. Fishmeal and oil more likely to drop a bit because of lower quotas on pelagic fish in North Atlantic. And we continue our development from our Capital Market Day, where we plan to invest DKK 5 billion over the next 5 years.

And the objective is to increase our operation up to 162,000 tonnes by 2030 from the 112,000 this year. And key projects in this development is our new feed factory, which will be starting operation in June, now in June. And the new hatchery in -- both in Applecross, which is now finalized. And then in Skalavik in Faroes, which is starting with eggs now in the second quarter. And new processing capacity, both in Faroese and in Scotland. This growth is around 9.6% over the period from '26 to 2030. The strategy is clear: reduce the risk, increase productivity and drive organic growth. So Bakkafrost remains firmly on track with a robust operation, clear strategy and investment needed to secure sustainable growth and long-term value creation.

Thank you very much. And now we are open for questions if there are any.

Alex Aukner, DNB Carnegie. Just a comment on the cost side. We've seen very good production growth during Q4. You have significantly higher standing biomass. So maybe 2 comments. One, what should we expect on the cost level going forward? And also in terms of the harvest volume guidance, you keep it unchanged, but given the -- was it 34% higher standing biomass in the Faroes? It seems you have quite a bit of headroom on the harvest volumes.

Yes. So on the cost, as we saw on the graph, it looks like feed costs are mainly flat or maybe a bit up, raw materials at least on the marine ingredients. But what draw, as I said, in the fourth quarter, the cost, 70% of the driver was from smolt. And I think that will continue. And especially in Scotland, when you compare the cost in Scotland with Faroe Islands, you see that we have not started -- the cost per kilo for smolt in Scotland is more than in Faroe Islands at the moment, despite that they are still very small. So when Applecross is running at full capacity, we should have that similar cost in Scotland as in Faroes. So I think it is fair to expect that cost in '26 should not go up, maybe slightly down despite that feed are slightly up.

That's my take at the moment. On the harvest volumes, yes, we had 62,000 tonnes in the Faroe Islands 1st of January compared with 47,000 last year. So we have a very good biomass, healthy biomass. And that is -- that gives us a very good and strong starting point for the year. And we are harvesting very large fish at the moment, 6.5 kilos. So that's also strong. But it's very early in the year. And normally, we are not changing our targets quarter-by-quarter. So we are confident with the volumes.

Christian Nordby, Arctic Securities. Last year, you had DKK 8 million extraordinary mortality in Scotland in Q1. Is that something we should look for in Q1 this year as well? Or anything substantially different as you see it today?

A very good question, Christian. There are -- in Scotland, in the farming, as I said, we are now working to aim for a similar biosecurity and veterinary scheme as in the Faroes, where every fjord is kind of in its own. So they are not mixed with other on the veterinary. So -- and that was my focus on the biosecurity and the focus going forward.

Until now, there has been a lot of diseases. And as we now move disease-free fish into the water, we need to start with the smallest fish first. We still have some batches of larger fish, which are a bit exposed or have a bit weaker biology. So that's why I think that there will be a few months with some extraordinary mortality. Whether or not it will be lower or was it DKK 8 million or -- yes, Danish krone, yes. I think it could be a similar number. I don't have a specific number. But it will not be 0.

Yes. And a follow-up, another question on Asia. You said -- and we've seen Asia has had very strong growth, but you had lower share of your exports to Asia in Q4. Why is that?

Yes. Our total volume has increased significantly. So we have also grown in Asia. We have grown in Asia. We have grown in the U.S. We have grown everywhere. I think it was not very much down. It was maybe slightly down. We are stronger there. But Asia has been very competitive. Volumes in Asia have close to doubled last year. And Asia seems to drive a huge demand at the moment. I think also year-to-date in '26, it has -- I don't know the specific numbers, but it has close to doubled also in '26 compared with '25 year-to-date.

Last week was a record week and this week will also be a record week to Asia, but prices are more -- have been more muted compared to other markets. We have a few customers, and we want to maintain our market share also in Asia, also for -- to protect the diversification in the market. But it's a really, really interesting development in Asia with new factories and new channels opening up all the time.

So this is very positive, especially with the disruptions that we see in global markets and especially in the U.S. It looks like to me like some of the Norwegian are pulling out. It's a strong word to say pulling out, but at least reducing their exposure in the U.S., maybe to take the risk down. And I don't think that is because of the demand. I think -- it looks to me like some are leaving or at least reducing.

Martin Kaland, ABG Sundal Collier. It looks like your margins in the FOF segment is slightly down compared to last quarter. Is this driven by lower external feed sales -- sorry, fishmeal, fish oil sales? And should this be the level to expect going forward? Or could there be other impacts for this quarter that also could be relevant in the next quarter and '26?

Yes. We have been in a period with higher external sales, which is now coming lower, especially when we talk about meal and oil. With lower intake volumes now, we will probably have a lower external sales of fishmeal and oil, and that will have a negative impact on the margin. So I think that's fair to expect that it will be lower forward.

Compared to the level now in Q4 or...

No. Compared with the average that we have had over the last 2 years. Something to add, Hogni?

Yes. But on the other hand, you will have increasing feed sales going forward.

Increasing feed sales, that's correct.

Henrik Knutsen, Pareto Securities. It seems you also updated your feed production guidance from the Q3 to the Q4 report, increasing from 155,000 to 165,000. What's the main driver for this?

We did 165,000 last year, right? Yes. So producing -- so harvesting more fish, larger biomass at the beginning of the year and probably also larger at the end of the year, it's difficult to see how you can use less feed. So less than last year is difficult to explain.

But then again, if you're entering the year with 34% higher biomass in the Faroes and you're guiding for 10% growth and you're also increasing the feed production, how does this add up?

Yes, it could end a bit higher, but 165,000 is what we could agree on.

Wilhelm Dahl Roe, Danske Bank. Just a question on -- of course, you had relatively lower tariffs than other regions. But going into sort of more contract negotiation times, do you see any impact except for end customers having a higher cost into the U.S. How those tariffs impact contract negotiations?

I don't see that impact so far. It is -- we have hardly seen any pushback on -- since the tariffs. It might also be related to the fact that salmon prices have generally been lower since the tariffs were implemented. I think it has a negative impact on the industry and between -- because of there are differences.

So there is a speculation of moving probably between sources with different levels of tariffs. But it does not look to me as the market is impacted and the prices are impacted. As said, the prices were much higher before, and they are -- including the tariffs, they are lower than they were 2 years ago. So we see a strong demand. We see a lot of demand also from new channels, new customers. So it looks like there is an underlying strong demand in the market in the U.S.

Okay. So thank you very much.

Live webcast here from Oslo. My name is Hogni Jakobsen, CFO of Bakkafrost. And I'm joined by Regin Jacobsen, which will take over the presentation in a while.

So the agenda this morning, we will come to it, but after paying a short notice to the -- our disclaimer on forward-looking statements, you can read it entirely. It's included in the published version of the presentation.

So the agenda is the usual agenda. First, a summary of the quarter, then we look into markets and sales, moving on to finance, operations and then finally, outlook.

So an overview of the third quarter for Bakkafrost. Our revenues in this quarter were DKK 1.7 billion. We had a group operational EBIT of DKK 22 million. The harvest in the Faroes was up by 17.5% to 25.4 kilotonnes. In Scotland, we were on a similar level as in the same quarter last year, 5,300 tonnes. Fishmeal, oil and feed division at Havsbrun feeding -- the feed sales were up 18% to around 49,000 tonnes. We sold no fish oil and fishmeal sale was down by 45% to around 5,100 tonnes. Sourcing of marine raw material was on the same level as last year, around 40,000 tonnes.

Cash flow from operations were positive with DKK 245 million compared to DKK 575 million last year. And we have positive EBIT in the Fishmeal, Oil & Feed segment, the Freshwater segment in the Faroes, Services and Sales and Other.

Then, if we look at margins on a high level and regional level, and these are all-inclusive margins by the way. The margin for the group was DKK 0.72 per kilo compared to DKK 6.38 in the same quarter last year. In the Faroes, the margins were DKK 8.93 per kilo compared to DKK 14.35 per kilo in last year. In Scotland, margins were negative with DKK 38.72 per kilo.

And then moving on to markets and sales, and beginning with the price development. The salmon prices in this quarter were affected by a large increase in the overall supply. Average prices for 4 to 5 kilo superior salmon dropped to NOK 63.73, which is 13% lower than the same quarter last year, 15% lower than in the previous quarter or corresponding to a drop from the previous quarter of around NOK 11 per kilo. Since late August, prices have been trending upwards again, and we expect stronger salmon prices as we look ahead into coming quarters where the supply is expected to reduce.

In this quarter, we also saw that the price premium for large fish is starting to increase again after having dropped quite sharply from the peak in the fourth quarter last year.

According to the latest update from Kontali, global sales increased 12% in the quarter compared to last year and actually increased to all markets except for the Middle East. The European market had an increase of 4%, which was lower than the other markets. And like in previous quarters, this is significantly below the European harvest, which means that a larger share of the European harvest has been exported to other markets.

Sales to the U.S. increased 13%. Kontali estimates that 10% -- there was a 10% increase in the supply from Europe. Chilean export to Russia increased quite significantly. There might be some inventory buildup in that market as well. And strong growth in sales to China and to Japan, and also to the ASEAN countries. And the same goes for Latin America, which grew 12%.

If we look at the harvest in the quarter, it increased by 12.2%, slightly more than the increased sold volumes. So again, some inventory buildup. All producing origin increased their supply, except for U.K., Ireland and the U.S. Europe as a whole increased by 12%, mainly driven by Norway, which was up 15%. Supply from Norway was especially strong in July and in August. Norway had a high incoming biomass to the quarter after a strong second quarter, generally good biology, high seawater temperatures, but we saw also some accelerated harvest in the quarter, partly driven by sea lice pressure.

In September, the strong growth in Norway eased off. We saw -- we also see that the overall feed sale, which was very high in the beginning of the quarter dropped quite significantly. And the biomass at the end of the quarter in Norway is also lower than last year.

In Scotland, harvest dropped with 5%. However, feed sales were up with 4% to 5%. Average weights increased slightly 2.5% to 4.5 kilo. In Bakkafrost case, we increased 13% on our average weights to 4.8 kilo. Biomass is low at the end of the quarter in Scotland. So we expect that there will be lower volumes coming from Scotland in the fourth quarter.

In the Faroes, harvest increased 3%. This was driven by Bakkafrost with a 17.5% volume increase from Bakkafrost alone. Very strong biology for Bakkafrost it has been the strongest quarter ever recorded when it comes to biology. Average weights for the Faroes as a whole, 5.38 kilo and Bakkafrost was a bit lower on average weight in this quarter, which Regin will present in more details.

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Biomass as well significantly increased, 31% increase for growth for the Faroes as a whole.

If we cross the Atlantic to the Americas, and the Americas increased supply with 14%, and this was mainly driven by Chile. Chile was 13% up on harvest volumes. And for Chile, it came mainly from August and onwards. Very strong feed sales, 20% up, average weights also increasing 3%. U.S. and Canada also had strong increases in July and August, but a significant drop in September.

Then moving on to finances and starting with the P&L. Our revenues in this quarter decreased, as mentioned before, DKK 1.686 billion to be exact. Operational EBIT of DKK 22 million, which was lower than the DKK 173 million in the same quarter last year. We have fair value adjustments of DKK 122 million and paid DKK 18 million in revenue taxes compared to DKK 8 million in the year before. And profit after tax was positive with DKK 77 million. Adjusted earnings per share in this quarter was 0.

And if we move on to the balance sheet since year-end '24, our PPE has increased with DKK 327 million to around DKK 7.1 billion by the end of this quarter. Fair value of the biological assets at the end of the quarter were DKK 2.7 billion. Inventories increased during the quarter with DKK 217 million to DKK 888 million. This is mainly driven by the activities in our Fishmeal Oil and Feed division. Receivables increased with DKK 145 million to DKK 286 million. And cash equivalents -- sorry, equity ratio dropped to 57%.

And moving on to cash flow, DKK 245 million positive cash flow from operations. We invested -- spent DKK 311 million on investments, and we had a positive cash flow from financing of DKK 147 million. Net cash -- net change in cash during the quarter was DKK 81 million. During the quarter, our net interest-bearing debt has increased to DKK 4 billion. The main driver are the investments -- net investments of DKK 311 million. And at the end of the quarter, we had undrawn credit facilities of around DKK 1.4 billion.

And with those words, I will hand it over to our CEO, Regin Jacobsen.

Good morning, everyone. Thank you. So I will start with the value chain, which is our pride in Bakkafrost. The power of our fully integrated value chain is what defines us. And in Bakkafrost, we produce salmon from raw material to healthy premium salmon, which are enjoyed by our customers around the world. In '25, we produce around 3.5 million meals per day. And that will increase over the next 4, 5 years to 5.6 million of healthy salmon -- 5.6 million meals of healthy salmon per day.

And we control every step from feed to food, securing quality, efficiency and biological resilience through the system. The integration is not just about efficiency. It's also very much about knowledge, control and responsibility, ensuring that every step and every stage supports the next. Our value chain transforms low-value marine proteins to high-value sustainable nutrition efficiency responsibly and with full traceability. This is what creates high value, and this is what will make the difference for Bakkafrost and our competitive advantage also in the future.

When we look into the third quarter, the FOF segment have stable operations and improving cost base with the volumes that we produce. The FOF segment delivered a solid operational performance with higher feed production, but reduced external sales of fishmeal. Marine raw material sourcing was unchanged compared to last year around 40,000 tonnes. The feed sales, however, increased 18% year-on-year, up to 49,000 tonnes, driven by strong demand of our own salmon feeding both in Faroes and in Scotland. External sales of fishmeal was down 45% compared to last year as inventories continue to be built up ahead of '26 when raw material availability is expected to tighten following the 41% reduction of the blue whiting quotas for next year.

The operational EBIT was DKK 91 million compared with DKK 147 million last year, 38% down, corresponding to a margin of 12% versus 20% last year. The fishmeal prices remained firm through the quarter, supported by limited global supply. Fish oil prices have stabilized after a prolonged decline from record levels earlier in '24. Vegetable ingredients continue a slight upward trend, but overall input costs decreased, improving cost balance for feed and farming in H2.

The planned expansion of the capacity at Havsbrun remains on schedule and will be finalized within the next 6 months. The new silos and process lines will increase flexibility in raw material sourcing and enable also more efficient feed logistics across both geographies. The FOF segment remains a cornerstone of Bakkafrost's integrated model, ensuring nutritional quality, cost control and supply stability across the value chain.

The Freshwater segment is strong. In the Faroe Islands, it is stable and continuously improving quality and survivability for the marine operation. The Faroes freshwater operations maintained strong biological performance and stable financial results in the third quarter. The smolt production continues to operate at high levels following expansion in Glyvradal, Norðtoftir, Viðareiði with all sites now in steady operation. A total of 4.8 million were transferred during the quarter versus 4.9 million last year. The average weight was 427 gram, up from 423 last year.

Year-to-date, 13.4 million smolt have been transferred versus 11 million last year. The average weight and robustness of the smolt continue to improve, reducing biological risk and strengthening the fish welfare at sea.

The operational EBIT was DKK 83 million versus DKK 84 million last year, corresponding to a 36% margin. The post transfer survivability remains at 97% to 98% during the first 90 days at sea, which are among the best levels in the industry.

In parallel, of course, the feeding in hatcheries have increased significantly, which we can see on the graph below. It's utilization of the new hatcheries, which have been increased significantly over the last quarters. And that's also the driver of the reduced cost in this segment. The full year stocking plan remains 18.5 million and is expected to go up to 20 million next year. The capacity utilization and biological efficiency continues to strengthen with clear cost benefit from larger and more robust smolt.

The Faroes Freshwater division continues to deliver consistent high-quality smolt with strong survivability, providing the biological foundation for long-term sustainable growth across Bakkafrost.

Coming to Freshwater Scotland. In the third quarter, the transfer number were 3.6 million versus 1.9 million last year. The internal transfer from own hatcheries was 2.7 million versus 1.2 million last year. The average weight of the internal transfer smolt was 229 gram versus 88 gram last year. The margin was, however, minus DKK 38 million versus minus DKK 6 million last year. The negative result is primarily driven by losses from the disease in Q2, where fish were culled to clear up the impacted batches. This also affected the third quarter.

Following the organizational change in August in the Freshwater division, Bakkafrost has reviewed all operational procedures and technical systems and implemented a plan for safe and stable production. This includes revised production strategy, optimizing capacity use and biological performance. Applecross is therefore now a fully closed production, where only eggs are brought in and all water is cleared and disinfected and recycled. This ensures a high level of biosecurity and full cost control -- full control of water quality, enabling the production of robust large smolt of a higher quality. Since August, the production has been stable without major challenges. And under the new plan, Applecross will produce 200 to 400-gram fish in the future. So we will have a more flexible approach to the production plan in order to optimize the production facility.

Experience from the Faroe Islands confirms that this is the key foundation for achieving a strong biology in the marine operation. Cost per smolt also at Applecross will come down significantly over the next 12 months, which will, of course, also benefit the financial performance of the Freshwater division in Scotland.

This year, the target is to stock around 7 million alone in Scotland. And next year, we lift that to 10 million. After several challenging years, Bakkafrost Scotland is now in a phase where we feel that in the Freshwater, we are more in control, and we shift to -- from stabilization to sustainable growth. The Scottish business will continue to replicate the integrated Faroes model with the full value chain control, strong biosecurity and sustainable growth. The long-term goal is to build a resilient competitive Scottish salmon operation capable of producing premium large fish with high biological stability and profitability, fully aligned with Bakkafrost's mission to produce the best salmon in the world sustainably and responsibly. The focus is on biological risk management through the large production mirroring the proven model in the Faroes.

The Applecross hatchery is now scaling up to produce healthy, robust smolt about 200 gram. This shift will shorten the marine cycle, strengthening the fish health and reduce the mortality with clear improvement expected from '26.

Coming to the farming operation in the Faroe Islands. Exceptional biological performance, record efficiency but low market prices. The Faroes farming operation continued to deliver outstanding biological results in the third quarter, marking the best performance ever recorded in Bakkafrost.

The total harvest reached 25,400 tonnes, 17% up quarter-on-quarter and 33% higher year-to-date compared to '24, reflecting strong growth and high biomass in the water. The average weight of harvested fish was 5.2 kilos versus 5.3 kilos, slightly lower but solid. Biological excellence was driving the efficiency. Ring costs reduced 14% in the quarter -- year-on-year -- 14% year-on-year, reflecting improved site efficiency, high survivability and strong feeding performance. Quarterly feeding increased 32% versus last year with new all-time feeding records set in October. Biomass growth is up 33% year-on-year, showing the cumulative impact of larger, more robust smolt and stable seed temperature throughout the summer.

The operational EBIT landed at minus DKK 29 million as the benefit from lower cost and strong biology was offset by the lower salmon prices during the quarter. The EBIT was NOK 178 versus minus NOK 207 last year, confirming solid biology performance despite the market headwinds. The biological situation in Faroes remain among the best in the global salmon industry, characterized by record high survivability, highest in more than 10 years, strong growth rates and feeding efficiency and excellent fish welfare.

In Scotland, the farming operation is -- volume is down 2% to 5,300 tonnes versus 5,400 tonnes last year. The average weight was 4.8 kilos versus 4.2 kilos last year, so 600 gram up. The operational EBIT was minus DKK 191 million versus minus DKK 179 million last year. The negative result was impacted by mortality cost, DKK 70 million and also driven by lower volume and significantly lower market price. The Portree disease impact was the main driver for the huge deviation.

During September, Portree experienced elevated mortality in smolt, driven by the Pasteurella disease, which was confirmed through screening. We had to take all fish out. Site is empty. It was emptied within around 4 weeks. This Pasteurella is a huge -- driving a huge mortality. So we decided to harvest everything as soon as possible. The fish was only 2.6 kilo at a time, about 1 million fish. So we lost, of course, a lot of volume and had to harvest the fish at a low weight.

Performance on this site was expected to be good. But as we harvest the fish at a low size, they will not give any value. The risk of disease in aquaculture is one of the industry most critical biological challenges. Fish are exposed to a complex mix of pathogen, environmental stress and handling factors that can quickly escalate if not managed properly. Effective biosecurity, robust smolt and early detection are essential to minimize the disease risk. Bakkafrost works continuously to improve our procedures and systems for fish health and biosecurity. The experience and methods developed in the Faroe Islands serve as an important model for our operation in Scotland. The Portree outbreak reduces the harvest, but larger smolt and improved freshwater performance point out a recovery for our operations from '26. We are constantly gaining new insight both in Faroes and in Scotland, which used to strengthen our practices and to ensure better biology results over time.

And for Portree, I can say that these batches were impacted already in freshwater. They were large and they were performing good in the first 6 months, but they were impacted. The input mortality was 19% within the first 90 days. Even so they performed good, they did not have the capability to handle the stress events that they were going through, and they caught this Pasteurella virus, which is -- we don't see this in our farms normally, and this can give a lot of disease, and that's what we have seen in Portree.

So in order to prevent this, it's really important for us to have this robust smolt to have fish which has not been exposed to stress levels during the freshwater phase. That is the key for avoiding these kinds of issues. So the strategy remains the same for our operations in Scotland to reduce the risk for this kind of events.

Coming to the Services segment. The fleet performance continues to drive biological success in our farming operation. Operating EBIT doubled to DKK 38 million versus DKK 19 million last year, corresponding to NOK 2 and a margin of 15%.

The integrated vessel operations cornerstone of biological control is driven by the freshwater treatment, Bakkafrost in Faroes has been pivotal in improving biological stability in the Faroes, together with Martin and Bakkanes, which are now fully integrated into smolt transport in Faroes and Scotland. The 2 FSVs are dedicated to smolt transfer, ensuring nearly 98% survivability.

Increased vessel utilization across treatment, smolt transfer and harvesting. Record low smolt transfer mortality is the best ever recorded. The segment also includes other farming service vessels to ensure highest quality of farming operation. The service fleet led by Bakkafrost continues to underpin Bakkafrost biological excellence, operational efficiency and sustainability -- sustainable growth in the Faroes and Scotland. And controlling these vessels for us is also key to drive the operational updates and also, in some cases, also deliver new technology, for example, the freshwater treatment, which was started in Bakkafrost.

So coming to Sales and Other, operating as one Bakkafrost continued to deliver solid results with strong volume growth and high-quality product supply across both regions. The total volumes from harvest were 14% up year-on-year to 30,678 tonnes, distributed to 15% higher HOG sales and 7% in the volumes transferred to VAP.

The EBIT declined to DKK 73 million as higher volumes were offset on spot market at low prices and stronger supply of superior fish in the market generally. The EBIT per kilo were NOK 375 compared with NOK 864 last year, reflecting high global supply and tighter price achievement.

Western Europe remains the largest market, but North America continues to see strong demand and increased its share to 24% from Faroes and 14% from Scotland. Asia continues to grow, now accounting for 15% from Faroes and 18% of Scottish sales, driven by the rising demand in China.

All-in-all, I think the one company approach commercial platform is strong and continue to strengthen our global reach and brand presence for Bakkafrost. But the lower premium in this quarter is driven by our high exposure in the spot sales, which also was from our side, driven by the change in taxation in the Faroes where we feel it's necessary for us to be more in spot sales than we used to be.

The outlook for Bakkafrost and for the industry as general, I think can be described as tightening supply and an improving market balance. The global supply slowly shows that the supply is coming down in Norway and Chile with reduced harvest following a strong first half in '25 and also a strong first half of the third quarter. The market balance is expected to improve into the fourth quarter and early '26 as global supply growth continues to moderate.

Norway have declined -- we see declined volumes from Norway through this quarter due to biological challenges and MAB restrictions and fewer fish in the sea. Supply growth in '25 is now estimated to be below 4% and expected to flatten in '26.

Faroe Islands remain above last year, supported by record biological performance and falling production costs. Full year harvest guidance for Faroe Islands is expected to be around 110,000 tonnes, all-time high, reflecting stable operations and continued high survival for the industry in general.

In Scotland, volumes are expected to increase gradually as new generation of large, high-quality smolt enters marine sites. For Europe, overall, the strong growth phase is behind us. Europe harvests are expected to be flat, slightly up, maybe 2% in the second half this year and close to 0 in '26, supporting a tighter supply-demand balance. Chilean harvest increased in the third quarter after a weak '24, but growth will normalize towards '26. North America remains stable with regular seasonal patterns.

Overall, '25 supply is up, but growth has slowed sharply in the second half of the year. And looking ahead at '26, global growth is projected at around 2%, indicating a more balanced market and potential price support in the new year.

If we look at Bakkafrost and our own numbers, our routes in the Faroes are strong, and they continue to drive steady growth across the group. Faroes' volumes are revised up to 82,000 this year, which brings us up to 104,000 combined versus 97,000 previously. For '26, the harvest plan is 112,000, 92,000 from Faroes and 20,000 from Scotland.

The breakdown in '26 between the quarters are in the report, but I can mention them. In Faroes, in the first quarter next year, it's 24%. Second quarter is 24%, third is 25% and the fourth is 28%. So these numbers on this graph is for '25. But in the report, you can see 26%. And in Scotland next year, the breakdown is 30% in the first quarter, 14% in the second, 18% in the third and 38% in the fourth. But you can see those numbers in the report. So in '25, as I said, 18.5 million to be transferred to Marine and 7 million in Scotland. So 25.5% all-in-all, which is around 10% up from last year. And next year, 20 million in Faroes and 10 million in Scotland, which is then 30 million, which is another increase from this year.

So we continue the growth in Bakkafrost, and we have high focus on cost reduction. We have high cost -- high focus on the operation in Scotland. And I think that we are getting there. We are getting there.

The raw material outlook is for the feed -- for the FOF segment on the Fishmeal & Oil is a bit challenged next year. The quotas for blue whiting is down 41% to 851,000 tonnes. With the new expansion of Havsbrun, we have very good flexibility. We can manage any recipe. So we won't have a problem to produce feed. Of course, it will -- it might be a challenging with external sales of fishmeal, which can drop slightly. But we will manage.

On the contracts, we say around 15% to 20%. We are open to negotiate contracts, but we need contracts also, of course, to reflect the expected prices also. So therefore, we have to wait a bit.

So we are getting to the last slide here. Just to repeat that our target for Bakkafrost is to grow to 162,000 tonnes by 2030. So we remain focused on growth still. We are also very focused on cost reduction. As mentioned earlier, our costs are down in Faroes around NOK 4 this quarter compared with last year, DKK 4 from DKK 34 -- actually DKK 5 from DKK 34 to DKK 29. And in Scotland, they are down DKK 2 from around DKK 50 to DKK 48. So this remains a key focus for us to get cost prices down.

As volumes is increasing, utilization of assets are improving and that helps significantly, and that will be the main driver for Scotland over the next 2 years. We also have a lot of projects, which includes the feed capacity, which will be finalized within the next 6 months, larger smolt capacity in Faroes and Scotland. Now Applecross is about to be finished. Now it's about scaling up.

In Scotland and Faroes, we still have Skalavik, which will be starting operation already in the second quarter next year, then we will have the first eggs in. It will be a gradual buildup then over the next 2 years in Skalavik.

So we remain firmly on track with robust operations, a clear strategy and investments needed to secure sustainable growth and long-term value creation. Challenging quarters test us, but they also make us better. Calm seas never made a skilled sailor. And Bakkafrost is ready for the journey ahead.

Thank you very much. If there are any questions, then now is the time.

Christian Nordby, Arctic Securities. Can you comment on how much extraordinary mortality you have in Scotland Freshwater and farming in Scotland so far in Q4?

So far in Q4. In Freshwater, there shouldn't be any. In Marine, there will be some mortality. In Scotland, what you account for as extraordinary is everything which is above 4%. And there will be some. I don't -- do you have a number on that, Hogni?

Not in --

October?

No.

No, probably. But --

In Marine --

Yes.

If we look at Q3, 71% of the mortality was Portree.

71% of the mortality in --

Of the cost.

In Q3 was from Portree?

Yes.

And Portree was harvested out in the second or third week, I

think, in October. So there is some mortality. I think the number in the fourth quarter was 3.7 million pounds so far in the fourth quarter, 3.7.

And so based on that, you expect positive EBIT from Freshwater Scotland in Q4?

No, because the capacity utilization is really a driver. We have built a mega structure there, which will be really, really good. It will be really, really good when it is in full operation. But just as in Faroes, the utilization of the costs is -- it takes time. You need a full production before you have a big operation but produce a low production. But as we scale this up over the next 12 months, we will see cost to come down. The cost price in the Faroe Islands to produce one smolt of 500 gram is less than the cost in Scotland to produce a smolt of 80 gram. And we will match that in Scotland, but it will take us probably 2 years before we will match that. But at the moment, we are far off.

And in your sales and market segment, if you compare this quarter to Q2, you have quite similar EBIT, but the spot prices were much lower. So I would have assumed that you would have had a bigger contract gain in Q3 than you had in Q2. But is it big -- is it price premiums that hurt the sales and market segment? Or was it -- why is the EBIT not higher?

In the third quarter?

Yes.

I think that one of the big drivers there is that Bakkafrost has a much lower contract share than what is reported in fish pool. When you look at fish pool or sea salmon or whatever you call it now, it's a certain inclusion of contracted fish. And as Bakkafrost has a much lower contract share, our average price is lower. We used to have around 30% to 40% in contracts. Now we are at 15% to 20%. And that means that our variation in EBIT follows more closely to the spot price. So we are -- when we look at our sales in the market, we are gaining good prices. But compared to the average sale of companies, which have a higher contract share, we lose in quarters where spot price goes through the -- to the bottom.

And last question, do you expect farming cost in the Faroes to be stable next quarter to this quarter?

Yes. I think they will keep -- be stable. There has been a push down in cost price. And feed prices is expected to go slightly up maybe next year, but there's still a push down because of the lag effect. And this driver applies for all the different cost items because it's driven by a good biology, a very low mortality and a good feed efficiency and generally a good efficiency in the operation. Of course, feed costs account for the biggest deviation of the 5, feed is around 1 of the difference. So the other 4 are other items.

[ Lisa Darba] from DNB. Could you elaborate a little bit more on your investments this year? Is it on the operational side or production lines or?

Investments this year, yes. So the big projects include the feed facility where we expand -- we more than double our feed capacity so that we can produce -- we are really stretched at the moment. We are producing everything. So in order to match our growth in farming next year, we are expanding the feed capacity. But we are also expanding our flexibility in the feed operation. So that's a big part of this year or -- and then it's the hatchery in Skalavik, which is this year, and that will also go next year. That investment is quite large, around DKK 1 billion, and it goes maybe over probably 3 years. So that's quite big.

What else? In Scotland, of course, Applecross is about to be finished now. So this year, that's quite a lot. Then we have some farming investments both in Scotland and Faroes to support the increased operation. We are looking at a bit more exposed sites in Faroes. We have within our licenses -- within our around 15 licenses, we have 24 sites, but we can set up some new sites. So in our project, over the next 5 years, we have 5 sites that we have identified that we can create new sites, but within the existing licenses. So that's the way we are growing our farming capacity in the Faroes at the moment. But also in Scotland, we also identified new sites, where we can go more exposed. So this is also already part of the investments this year.

Is there anything else, Hogni? Or should we --

That's the big thing.

That's a big thing. So, yes, I think that's the big thing.

Henrik Knutsen, Pareto Securities. Just following up on your comment on new sites in Scotland. How easy is it for you to get approval for just moving to less shallow waters?

Not easy, but it takes time. But we think that we have a good dialogue with authorities, but there's a lot of work that needs to be done, and it takes plenty of time. But at the moment, we don't have -- we have enough space. But in some areas, we would like to move a bit further out because some of the areas are probably not the best for the future.

On the FOF segment, less quota for next year, less production, but you're probably selling more internally. How do you envision the overall margin or the overall EBIT contribution from the FOF segment in 2026 compared to 2025?

Yes. So feed, as you said, feed will continue to increase. And when it comes to fishmeal and the intake of fish or raw material, that will, of course, have a negative effect. It's a bit difficult to give specific guidance. At the moment, we can only say that the quota looks to go down. But there is also -- there are also other aspects in this, which are a bit difficult to comment. But I can say that normally, the blue whiting catch is not all supplied to Faroes. A part of the catch are landed in other countries. And as the quotas comes down, that's, of course, an opportunity for us to try to get our share of that. But I guess the prices will also go up. So therefore, for us, to have this new plant -- feed plant, where we will increase our flexibility with raw materials, where we can basically do everything, is also important. Having the flexibility is really important also to be able to mitigate potential higher raw material costs in the future so that we potentially can use all opportunities.

And also for the farming cost in the Faroes, you mentioned stable into Q4, but looking ahead into 2026, have you reached a stable level? Or is it more to come?

Yes. Giving guidance on costs in '26 is stretching it a bit. But at the moment, it looks stable. At the moment, it looks stable. We will, of course, see how feed costs will develop. But I'm pretty sure that other costs at the moment are quite safe.

One more question -- 2 more questions, okay?

Yes, go ahead.

Wilhelm from Danske Bank. With the change in strategy in smolt in Scotland with 200 to 400 grams, the expected average weight for 2026 isn't that high. Of course, I would expect quite a share of external smolts. Just wondering if you can comment on how long you will be reliant on external smolts currently and sort of how that share has changed with the new strategy?

Yes. That's a good question. It's difficult to answer. Of course, we hope that our ability to manage our operation will improve because of -- the track record so far has not been too good. But with the new management in place and now the building process finished, we are quite sure that we will be better in the future than in the past. So therefore, we have made this new strategy where we have a more flexible approach because with the systems now installed in Applecross, there is a better flexibility or better possibility to produce a part of the fish to 400 gram and a part of the fish to 200 gram. That said, that means also that in order to reach the number, we will be a bit reliant to having some external smolts for a bit longer. So how big part, maybe 20%. That could be a number, but it's a bit -- there is probably some variation in that number. But that's maybe what we are looking at the moment.

And that's for '26, right?

Yes, for '26.

[ Magnus Togjosen with Profound ]. I'd like to talk a little bit about the Pasteurella event. So I understand that it's mainly the smolt that is the problem and that there was some weakness with the smolt. Can you please try to explain what was wrong with the smolt and how are you going to solve it? And then also if you made any consideration about if the bacteria could spread to other sites? And finally, if you -- in addition, if you have any quarantine for the site, so it will be out of business for a while. And then some comments about if there are any specific things that increase the risk for this bacteria event, if there is any special things you've noticed that makes -- if it could be some with home checks or if it's something with the temperature or -- so yes, please.

Yes, this is a good question. We -- past this event, we have checked now all our sites in Scotland. So we have checked fish in all our sites. We have checked that fish in all sites for Pasteurella and confirmed that this was a one-site event. And we have also checked the sites where our treatment vessels have gone after Portree to see if we have spread the disease to other sites and other sites have been confirmed no detection, no detection. So that means that the measures we have had in place with cleaning and disinfection of vessels, both treatment vessels and service vessels have been working. So that's good. As I have understood, this disease or this bacterial virus is a virus which are -- is not normal and have not been seen very often. And -- but it can cause big mortalities.

Why did we get this disease? I don't know. Our veterinarians say that if you have a very strong fish group, then might be this should not have caused this big mortality. But if you have a weaker fish group, so a weaker and a stronger, what does that mean? Well, we have seen in Faroes also that a robust smolt handles things much better. And when we look at our history in Faroes, we saw that, for example, when we talk about water quality, for example, in the hatcheries, for example, just temperature is really important. Being able to control the temperature through the whole operation from egg to transfer is really important. In Scotland, even in Applecross, we have not had that control to a full extent yet or at least for that fish group. Now we are controlling the temperature. We are controlling the temperature in Applecross now. But this fish was transferred in December, January last year, and the control on temperature was not optimal, not optimal. It was much better than it used to be, but not optimal.

And then we know that we had also some diseases in Applecross. And this fish had also gone through some of these issues. So there have been some issues. And we saw that when this fish was transferred, the mortality in the first 90 days was 19%, which is an indicator that this -- despite that this fish performed really well in the first 6 months. And from January to August, they grew to 2.6 kilos, and we were expecting to harvest them in January -- next coming January at more than 5 kilos. That was our expectations, which we have talked about. But they caught this disease and the mortality increased really, really rapidly. So we decided just to harvest everything in order to not to lose too many.

So that is somehow the explanation that -- and we had -- I can add that we had a freshwater treatment in July, which the fish handled good. Then we had a new in August and then started some mortality. And then we had a new in the beginning of September, so 3 treatments. And when you have these treatments, there will be some -- maybe some scratch in the skin or maybe some fish have some gill issues. And these are open doors for bacterias in the sea. And if you have a weaker fish, then they can catch a disease. If you have a strong fish, which have a good immune system, they maybe have would handle it much differently. So that's the best answer I can give you at the moment. Thank you.

Thank you very much for today and thank you for coming.