Nordic Aqua Partners – Results for the first quarter 2022
Nordic Aqua Partners – Results for the first quarter 2022
- Project on time and on budget – Hatchery completed, fish moved to start feeding in May
- RAS 1 completed, RAS 2 and 3 to be completed in July and September 2022, respectively
- Contract signed with local energy bureau for installation of solar panels on roof of the facility
- Record salmon price development to the Chinese market
- In process of transferring the jurisdiction of incorporation of NOAP from Denmark to Norway
- Capex of 20 MDKK in period Q1 2022, accumulated project capex of 147 MDKK out of a total of 370 MDKK
- Available liquidity of 476 MDKK as of 31.3.2022, including cash and undrawn credit facilities
Stage 1 of the project continues to develop on time and within budget. Since completion of the building containing administration, hatchery, and RAS 1, 2 and 3 (“the small building”) in late 2022, focus has been on installation and commissioning of the RAS process equipment. RAS 1 was completed and commissioned on schedule, and fish was moved into the facility in May to start feeding. Installation of RAS 2 is in process, and installation of RAS 3 is scheduled to start in June.
Commenting on the development, Chairman Ragnar Joensen, said:
“Project execution has been excellent, and we are very satisfied with the progress at the construction site. With the first inlay of eggs and start of first feeding completed, we are gradually evolving from a pure project company to a farming company. The project continues to run according to the original plan.”
The company has signed a contract with a local energy bureau for installation of solar panels on the roof of the facility, which will produce 25% of the required energy for stage 1 at Gaotang Island. The rest of the energy will be sourced from the local 400 GWh solar and wind power facility in Gaotang.
Construction of infrastructure and facilities are carried under a lease agreement with the local authorities. The terms under the lease agreement are fixed for Stage 1 and 2 (8,000 t), which significantly reduces the capex risk to Nordic Aqua Partners.
The company is in the process of transferring the jurisdiction of incorporation of NOAP from Denmark to Norway. The reason for the transfer is to simplify the structure.
Total capital expenditure during for the first quarter was DKK 20 million, mainly related to AKVA Group RAS technology. Capex will increase next quarter as construction accelerates. As per 31 March 2021, accumulated project capex was DKK 112 million.
Outlook
As a local farmer of Atlantic salmon in the Chinese market, Nordic Aqua Partners is focusing on the domestic salmon market and how that is expected to develop. It is the company’s view that a locally produced salmon could achieve a premium pricing on top of the cost advantage, when considering freshness and 24/7 delivery capacity which eliminates importer risk of having to place spot orders ahead of sales being secured.
China customs statistics has official data on import prices of fresh salmon before customs clearance. By adding import taxes and handling costs it is possible to project wholesale prices in China. Market prices for 2022 peaked in April with 185 NOK/kg HOG. That compares to the company’s budgeted EBIT cost/kg of 51 NOK.
At listing in Q4 2020, Nordic Aqua Partners secured equity funding for expansion up to 8,000 tonnes. Since then, site preparations have been completed, and construction of the smolt facility building will be completed in Q2-2022. As land, infrastructure, and buildings, including concrete tanks and filter basins are leased from the local government in China, they are currently responsible for the work being conducted on the site. The first milestone was completed in early March 2022, with inlay of the first eggs. The first frys were moved into RAS 1 and first feed in May, and the second inlay of eggs is scheduled for early June. Production cycle is estimated to two years, which means the company is on time for first harvest in Q1 2024.
By the end of the first quarter 2022, the organization counted 30 employees. The company continues to recruit both foreign and local expertise, management and staff to fill the many positions needed to meet our ambitious expansion and development plans.
The financial expectation for 2022 is that Nordic Aqua’s result will be a loss of MDKK 30-35. The company expect to have a positive result in 2024 after harvest has commenced.
The company has initiated a project to investigate all aspects of a possible accelerated expansion plan to
reach a capacity of 20,000 tonnes by 2027. This process is expected to be concluded by end 2022.
Result presentation
Ragnar Joensen, Chairman Nordic Aqua Partners, Ove Nodland, CEO Nordic Aqua Ningbo and Hjalti Hvítklett, CFO Nordic Aqua Partners, will present the results live by webcast the same day, June 2, 2022 at 10:00 a.m. CEST.
The webcast can be accessed at www.nordicaquapartners.com, or with the following
link: https://attendee.gotowebinar.com/register/4489234930958188304
For further information please contact
Hjalti Hvítklett, CFO Nordic Aqua Partners
+298 221222
About Nordic Aqua Partners
Nordic Aqua Partners is a Nordic land-based salmon farming company, using cutting-edge Nordic technology and expertise to set up the first fully integrated and commercially scaled Recirculating Aquaculture System [RAS] farm for Atlantic salmon located in Ningbo, China. With operations in place, Nordic Aqua Partners will be the first local producer of truly sustainable and fresh salmon to the Chinese market. The current business plan is for an annual production of 20,000 tonnes HOG.
Nordic Aqua Partners A/S is listed at Euronext Growth under the ticker NOAP.
To learn more, please visit www.nordicaquapartners.com
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
