Salmon Evolution ASA (FRA:60E) (Q2 2026) Earnings Call Highlights: Phase 2 Ramp-Up Drives 50% ...

Q & A Highlights

Q: What specific biological and operational milestones do you need to demonstrate over the next 6 to 12 months to be comfortable that Phase 1 and 2 can collectively deliver around 18,000 tonnes HOG? And based on what you're seeing today, do you believe you are on track for this? A: Trond Veibust (CFO): We have a clear plan to reach our mid-'27 run rate production target of about 14,500 tonnes gutted salmon. In Phase 1, reaching our next 12 months target encompasses a quarter-over-quarter improvement of approximately 4% from the run rate we have today. For Phase 2, it's all about maintaining the momentum we have seen since inception of operations about five months ago. Delivering on the production ramp-up is the current main focus and priority of the company, and we are definitely on track to reach the targets we have set for the next 6 to 12 months.

Q: With the improvements you're seeing on the feeding protocols and water quality, do you expect to see average harvest weight of 4 kilos this year? Or is that a milestone for '27? A: Trond Hkon Schaug-Pettersen (CEO): We are aiming to achieve this as soon as possible. We are stocking fish every month now with Phase 2, and harvest weight is a function of the growth we achieve within that window. We saw harvest weight increase from 3.2 to 3.5 kilos. It's not a problem growing large fish; it's about doing it within the allocated time. We are seeing positive things across the system, and 4 kilos gutted plus is definitely the target. We have a very tight weight distribution due to grading, so if we get the average north of 4 kilos, we basically don't have any fish below 3 kilos.

Q: How should investors think about the impact of Phase 2 on fixed cost dilution over the next 12 months? A: Trond Veibust (CFO): With Phase 2 gradually coming online and improving performance in Phase 1, we are beginning to see the scaling effects, although it's not yet reflected in our financial results. Our cost structure contains a high proportion of fixed costs, and with higher volumes, we get a very meaningful fixed cost dilution, which translates into improved unit economics. We have effectively front-loaded much of the cost base required for future growth. With substantial production growth expected over the next 12 months, we will see material fixed cost dilution and significantly improved unit economics in the coming periods.

Q: How many of the tanks in Phase 2 are in operation? And could you give a little flavor on the operational experience so far? A: Trond Hkon Schaug-Pettersen (CEO): We have taken over four tanks in Phase 2, with fish currently in three of them, and we will soon split one of the groups to have fish in all four. We are taking over the last eight tanks over the course of this year and are planning two full-size smolt releases in the fourth quarter, meaning we will stock fish every month going forward. The ramp-up has gone according to plan. The upgrades implemented have had the intended effects, with good water quality, fish adapting well, and the feeding system working. We are very happy with what we have seen so far.

Q: What is your take on the salmon market? A: Trond Hkon Schaug-Pettersen (CEO): We were a little surprised about the market this year and expected it to be stronger. Demand is actually very good with significant growth, but there has been a period of very high supply growth. The good thing about salmon is that it has very limited storage, so low prices and high volume mean you are building market. When volume growth eventually comes down, which is just a matter of time since license capacity has not been increased, we are increasingly confident in the market outlook. After a challenging couple of years, 2027 looks very, very interesting.

Q: On the pre-grower tanks, could postponement of that investment also mean that it will take longer time to ramp up to 18,000 tonnes? A: Trond Hkon Schaug-Pettersen (CEO): The pre-grower tanks are part of the 18,000-tonne capacity. The design is basically completed, and it's about getting started. We haven't made a final investment decision yet, but it's something we are working on. We are now in a phase where the grower tanks will be finished by the end of this year, which will also free up capacity.

Q: Could you comment briefly on the composition of your feed basket compared to an average industry feed basket? A: Trond Hkon Schaug-Pettersen (CEO): We have what I would call a high-performance feed with unique features in terms of technical specifications, and we have prioritized high energy content. We have a very close cooperation with our feed supplier and are monitoring the situation closely regarding increasing feed prices. We have prioritized high marine inclusion in our feed basket.

Q: Phase 2 incorporates a lot of operational experience from Phase 1. Which upgrades do you believe the most in? A: Trond Hkon Schaug-Pettersen (CEO): Water quality has been a core focus in Phase 2, further improving it compared to Phase 1. This is the foundation for taking out the full potential of the fish and maintaining good biological performance. By water quality, we mean particles, gas levels, and the flow of water. This is, in our view, very important.

Q: What is the status of Phase 3? A: Trond Veibust (CFO): Salmon Evolution is laser-focused on delivering Phase 2 and the milestones we've set. That's priority number one, two, and three in the company. When it comes to Phase 3, we have the land, the license, and the electricity we need to realize that project when it's time. But for now, our focus is Phase 2 and delivering on the milestones we've set.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .