R E P O R T F O R
2024THE FIRST QUARTER OF
TABLE OF CONTENTS
- Highlights
- New management
- Project development
- Operational review
10 Financial review
12 Timeline
15 | Statement by the board and CEO |
16 | Report for |
the first quarter of 2024 | |
Gigante Salmon - Group | |
20 | Notes |
24 | Report for |
the first quarter of 2024 | |
Gigante Salmon AS | |
28 | Report for |
the first quarter of 2024 | |
Gigante Salmon Rødøy AS |
The report has been prepared in both Norwegian and English.
In case of any discrepancy between the two versions, the Norwegian version shall prevail.
Photo: Gigante Salmon
Highlights
REPORT FOR THE FIRST QUARTER OF 2024
- Smolt delivery 21 January, production started in production basin nr. 3
- External construction management, including construction manager and HSEQ coordinator, hired
- Production basin 2 under construction and progressing according to plan
- CEO terminated after revision of plan and forecast
- Kjell Lorentsen acting CEO from 19 March
EVENTS AFTER BALANCE SHEET DATE:
- Kjell Lorentsen CEO from 23 April
- Liv Monica Stubholt recommended as new chairperson of the board by the company's nomination committee.
- Increased bank financing from SpareBank 1 Nord-Norge of MNOK 120 secured. The loan commitment is supported by Export Finance Norway (Eksfin).
- Affirmed support from main shareholder, Gigante Havbruk AS, with up to MNOK 130 in a new contemplated private placement to secure financing of increased CAPEX.
- Sparebank 1 Markets engaged to act as financial advisor in connection with the contemplated equity financing. Expected to be completed by end of Q2.
2 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 3 |
New management
Effective from 23 April, acting CEO, Kjell Lorentsen, assumes the role as CEO of Gigante Salmon AS.
Kjell Lorentsen has decades of experience from aquaculture, and is the founder of aquaculture group Gigante Havbruk AS.
Kjell Lorentsen has extensive experience from aquaculture and is the founder of the successful and family-owned fish farming group Gigante Havbruk AS.
Kjell Lorentsen was CEO of the company from its establishment until September 2021 and has been a member of the company's board of director. Lorentsen has through his period as CEO and acting CEO convinced the Board of Directors that he has the experience, the decisiveness, the vision and the ambition to drive the further development of the Company in the best interest of its stakeholders.
-
It is with great enthusiasm, I embrace the position of Chief Executive
Officer at Gigante Salmon AS. Following 2.5 years of dedicated construction, it's truly rewarding to witness the success of our efforts, evidenced by the thriving fish in our facility. I look forward to developing Gigante Salmon into a commercially robust participant in the future of land-based aquaculture industry, says Kjell Lorentsen.
4 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 5 |
Project review
Preparations and planning for phase
- of development are well under way. Most of our internal resources have now been committed to the operating organisation as our focus is now fully on production.
The development organisation's staff-in particular project and construction management, HSEQ and logistics-have been hired. Additional resources will be made available as necessary.
Establishment of technical installations continued throughout Q1. The intake structure for seawater for phase 2 has now been installed on the seabed and the western embankment according to plan. The work included placement of three
sieve boxes and associated risers in preparation for installation of intake pumps. The setup will feed seawater into production basin 2.
Work to improve the rig continued during Q1. The improvements will allow for optimal staffing and adherence to the timeline.
Production basin 2 is being established during phase II. The basin's deep foundations and wall and floor castings have been completed according to schedule. Both of the side walls and the floor have been cast and prepared for surface treat- ment. Surface treatment will start in early Q2.
The technical area for the phase II area is under construction. Work
has progressed to the point where installation of the inlet pipes for basin 2's three circular-flow raceways can begin. This is expected to take place in early Q2.
As soon as the most important concrete work on basin 2 is complete, work on basin 1 will begin. While this is being done, surface treatment in basin 2 will take place, as will work to complete the technical area and installation of the four sieve boxes and risers that will service basin 1.
6 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 7 |
Operational review
After a challenging start with smolt release at Rosøya, we have, despite significant fish loss, gained important experience. Operations are being adjusted with new solutions for a more efficient everyday life, and preparations for the fall are well underway, driven by a dedicated and competent team.
The first quarter was extremely exciting and challenging. The reception of smolt at the end of January was in many ways the start of what we consider to be the operational phase out here on the island. Two batches of 640,000 smolt in all were delivered. A number of deaths were recorded immediately after delivery, and the fish-health service was contacted for an inspection of the fish and our facility. The higher-than-expected mortality was also reported to the Norwegian Food Safety Authority. Most of the smolt we received died; some 160,000 survived. The die off was mainly due to problems with the smoltification process in combination with underlying diseases, transport, the timing of the release and temperature.
Regardless of the outcome of the smolt release, operating the facility has provided us with valuable
experience, and we have become aware of a number of issues. All of the issues can be addressed, but they require attention in both the short and long term. The issues mainly relate to sludge, dead fish and cleaning. One immediate solution was to purchase a sludge and dead fish ROV, and we are working on
a permanent solution that will be both simple, manageable and less labour-intensive. Overall, basin 3 and the three operational raceways function as expected. The need to adjust and refine the concept was expected and is manageable.
We currently work two shifts, and we are looking to hire two additional operations technicians in advance of the planned release of smolt this autumn. The recruitment process is proceeding satisfactorily, and there are number of qualified applicants interested in a job on Rosøya island.
In addition to devoting time to addressing sludge, dead fish and cleaning issues, our focus has been on our feeding systems and making necessary adjustments. It has been necessary to supplement the daily ration provided by the feeding system with large amounts of feed by hand and machine from the service fleet. In connection with this we purchased manually operated feeding machines that have been effective.
Otherwise, everything is slowly but surely falling into place, and we believe the facility will live up to its potential. We are thankful to our staff for their significant contribution towards establishing operations. Being able to participate in an operation of this sort at the early stages is extremely rewarding for all those involved, and it is hugely motivational when working towards a common goal.
8 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 9 |
Financial review
RESULT FOR THE FIRST QUARTER OF 2024
Even though the group moved into a phase that entails concurrent operational and development activity in Q1, no sales income is expected before the first harvest, in Q2 2025. The group therefore had no sales income in Q1. Operating costs in Q1 were NOK 533,000, down from NOK 1.343m for the year-ago period. The operating profit for the period was equivalent to the operating costs, NOK -533,000.
Total cash flow for the group in the first quarter was NOK -81.895m. The discrepancy with the operating result is mainly due to investments in connection with the group's development project in Rødøy.
The group's liquid assets were NOK 33.072m on 31 March. In addi- tion, an overdraft of NOK 90m has been granted as working capital. The funds are available, but they have not been drawn on.
On 31 March, long-term debt amounted to 31.8% of total capital. This is an increase from 19.8% in Q4 2023. The increase in the proportion of long-term debt is due to increased investment in the group's development project in Rødøy, which is financed through increased drawing on the group's long-term construction loan. The proportion of long-term debt is expected to increase throughout the development period due to increased drawing on construction loans and leasing frameworks.
Long-term bank financing for Gigante Salmon Rødøy's develop-
ment in the amount of NOK 204m has been granted by Sparebank1 Nord-Norge. Eksfin has issued a guarantee covering 50% of the loan amount. On 31 March, NOK 155.858m in financing remains .
Total investments in Q1 rose to NOK 641.679m, compared with NOK 514.778m in Q4 2023.
The group's financial position is good, and, as of 31 March, the group is able to repay short-term debt using its most liquid funds.
Total capital at the end of Q1 was NOK 746.143m, compared with NOK 322.966m the end of the year-ago period. Equity on 31 March was NOK 481.234m (64.5%), compared with NOK 279.759m (86,6%) at the end of the year-ago period.
On 19 March, Gigante Salmon announced an approximately NOK 350m increase in the nvestment forecast for the construction of the facility at Lille Indre Rosøy in Rødøy council. Since the announcement was made, we have worked to assure the quality of the increased investment forecast and to obtain the necessary financing, and 23 April
the company announced a commitment for a loan of MNOK 120 from SpareBank 1 Nord-Norge. The loan commitment is supported by Export Finance Norway (Eksfin). Further, Gigante Havbruk AS (the company's largest shareholder) has confirmed that it supports an equity financing of the company for a total subscription amount up to MNOK 130.
The company raised MNOK 100 more than the at the time identified capital need in its private placement completed in October 2023. Thus, with the MNOK 100 from the private placement in October 2023, debt financing of MNOK 120 from SpareBank 1 Nord-Norge and a contemplated equity financing with an indication of interest from Gigante Havbruk AS to invest MNOK 130, Gigante Salmon AS has a structured plan to cover the approximately MNOK 350 cost increase for the construction work in Rødøy.
The company's board of directors has engaged Sparebank 1 Markets to act as financial advisor in connection with the contemplated equity finan- cing. Together with the company, Sparebank 1 Markets expects to initiate discussions with key shareholders and investors and that an equity financing will be feasible to complete in second quarter of 2024.
A complete income statement, balance sheet, cash-flow statement and notes follow.
10 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 11 |
Updated timeline
2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
CONSTRUCTION PHASE
PROJECT EXECUTION PHASE
Q3-23 GROUNDWORK COMPLETE
Q1-24GROW-OUT BASIN COMPLETED
Q4-24 ENTIRE PRODUCTION PLANT COMPLETED
TEST PRODUCTION - 0,15 MILL SMOLT*
HARVEST
550
TONNES
HOG
PRODUCTION PHASE 1
FULL PRODUCTION
STARTUP PRODUCTION - 1.1 MILL SMOLT
HARVEST 5,000
TONNES HOG
STARTUP PRODUCTION - 2.2 MILL SMOLT
HARVEST
9,500 TONNES HOG
FULL PRODUCTION - 3.3 MILL SMOLT
HARVEST
16,000 TONNES HOG
FULL PRODUCTION
- 3.3 MILL SMOLT
*The company has an agreement with Grytåga Settefisk | AS on crediting for smolt that die in a given period after production | ||
startup. Test production of about 0.15 mill smolt is the amount of smolt the company is financially responsible for. | |||
12 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 13 |
Statement by the board and CEO
The board of directors and the CEO hereby declare that the consolidated accounts for the period 1 January-31 March 2024 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway, and provide a correct picture of the company's assets, liabilities, financial status and income and expenses as a whole. We further declare that the Q1 update includes an accurate summary of the company's most
important activities up to the presentation of the results.
Bodø
22.04.24
Eirik Sørgård | Kjell Lorentsen |
Chairman of the board | CEO |
Kristin Ingebrigtsen | Liv Monica Stubholt |
Member of the board | Member of the board |
14 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 15 |
Report for the first quarter of 2024
GIGANTE SALMON AS - GROUP
Income statement | ||||
(Amount in kNOK) | Group | |||
Income statement | Note | Q1 2024 | Q1 2023 | 2023 |
Other income | - | 140 | 60 | |
Total income | - | 140 | 60 | |
Employee benefits expense | 219 | 427 | 746 | |
Depreciation and amortisation expenses | 1 | 25 | 25 | 100 |
Other operating expenses | 289 | 891 | 2 538 | |
Total operating expenses | 533 | 1 343 | 3 384 | |
Net income | -533 | -1 203 | -3 324 | |
Interest income | 862 | 1 288 | 5 570 | |
Other finance income | - | - | 27 | |
Interest expenses | - | - | 24 | |
Other financial expense | - | - | 46 | |
Stock exchange fees | 673 | - | 1 207 | |
Net finances | 189 | 1 288 | 4 319 | |
Profit before income tax | -344 | 85 | 995 | |
Income tax expense | -62 | 30 | 267 | |
Net profit or loss for the period | 2 | -282 | 55 | 728 |
To minority interests | ||||
To majority interests | -282 | 55 | 728 | |
Disposal | ||||
Transferred from/to equity | -282 | 55 | 728 | |
Cash flow statement | |||
(Amount in kNOK) | Group | ||
Cash flow from operations | Q1 2024 | Q1 2023 | 2023 |
Profit before income taxes | -343 | 85 | 995 |
Depreciation | 25 | 25 | 100 |
Change in inventory | -2 852 | - | - |
Change in trade debtors | - | -331 | 350 |
Change in trade creditors | -1 080 | 143 | 1 347 |
Change in other provisions | -9 186 | 16 224 | 3 853 |
Net cash flow from operations | -13 436 | 16 146 | 6 645 |
Cash flow from investments | |||
Proceeds from sale of fixed assets | 23 953 | - | - |
Purchase of fixed assets | -114 847 | -67 964 | -403 793 |
Repayment of short term loans | -2 987 | -1 066 | - |
Purchase of shares and investments in other companies | - | - | -100 |
Net cash flow from investments | -93 881 | -69 030 | -403 893 |
Cash flow from financing | |||
Proceeds from long term loans | 120 631 | 542 | 433 867 |
Repayment on loans | -95 209 | - | -303 432 |
Proceeds from issuance of equity | - | - | 199 683 |
Net cash flow from financing | 25 422 | 542 | 330 118 |
Net change in cash and cash equivalents | -81 895 | -52 342 | -67 130 |
Cash and cash equivalents at the beginning of the period | 114 967 | 182 097 | 182 097 |
Cash and cash equivalents at the end of the period | 33 072 | 129 755 | 114 967 |
Which exists of: | 33 072 | 129 755 | 114 967 |
Cash and bank deposits | |||
16 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 17 |
Balance sheet
(Amount in kNOK)
Group | ||||
Assets | Note | Q1 2024 | Q1 2023 | 2023 |
Deferred tax asset | 7 275 | 6 048 | 7 213 | |
Total intangible assets | 7 275 | 6 048 | 7 213 | |
Land, buildings and other property | 530 962 | 165 567 | 514 079 | |
Ships | 664 | 753 | 686 | |
Right of use asset | 110 043 | - | - | |
Fixtures/fittings, tools, office machinery and equipment | 10 | 21 | 13 | |
Total tangible assets | 1 | 641 679 | 166 341 | 514 778 |
Investments in shares | 100 | - | 100 | |
Total financial fixed assets | 100 | - | 100 | |
Total fixed assets | 649 054 | 172 389 | 522 091 | |
Inventory | 2 852 | - | - | |
Trade receivables | 31 412 | 175 | - | |
Other receivables | 29 753 | 20 647 | 20 595 | |
Total receivables | 61 165 | 20 822 | 20 595 | |
Cash and bank deposits | 33 072 | 129 755 | 114 967 | |
Total current assets | 97 089 | 150 577 | 135 562 | |
Total assets | 746 143 | 322 966 | 657 653 | |
Balance sheet
(Amount in kNOK)
Group | ||||
Equity and liabilities | Note | Q1 2024 | Q1 2023 | 2023 |
Share capital | 3 | 134 174 | 105 556 | 134 174 |
Share premium | 338 200 | 165 734 | 338 200 | |
Total paid-in equity | 2 | 472 374 | 271 290 | 472 374 |
Other equity | 8 860 | 8 469 | 9 141 | |
Total retained earnings | 2 | 8 860 | 8 469 | 9 141 |
Minority interests | - | - | - | |
Total equity | 2 | 481 234 | 279 759 | 481 515 |
Building loan | 155 858 | 542 | 130 436 | |
Lease liabilities | 81 408 | - | - | |
Total other non-current liabilities | 237 266 | 542 | 130 436 | |
Trade creditors | 18 631 | 25 069 | 33 720 | |
Public duties payable | 639 | 260 | 766 | |
Other short-term liabilities | 8 373 | 17 334 | 11 216 | |
Total current liabilities | 27 643 | 42 663 | 45 702 | |
Total liabilities | 264 909 | 43 205 | 176 138 | |
Total equity and liabilities | 746 143 | 322 966 | 657 653 | |
18 | 1. QUARTERLY REPORT OF 2024 | GIGANTE SALMON | 19 |
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Gigante Salmon AS published this content on 23 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 April 2024 05:33:08 UTC.