Pelagia Holding AS - Financial Report Q3 2022

15 Nov 2022 07:00 CET

Pelagia Holding AS - Financial Report Q3 2022

Revenues for Q3 22 were 2.994 MNOK (Q3 2021: 2.898 MNOK). EBITDA was 597 MNOK in
Q3 22 (Q3 2021: 455 MNOK). Profit before tax was 450 MNOK in Q3 22 (Q3 2021: 348
MNOK). YTD revenues were 7.483 MNOK as per Q3 22 (Q3 2021: 6.980 MNOK). EBITDA
were 1.043 MNOK YTD 22 (YTD 2021: 668 MNOK). Profit before tax was 635 MNOK in
YTD 22 (YTD 2021: 410 MNOK). Q3 2021 figures included a one-off gain of 139 MNOK
related to the purchase of Hordafor.

In Q3 22 Pelagia had some increase in raw material volume in the FOOD division
compared to Q3 2021. Overall, a small reduction of raw material is expected for
2022 due to lower quota of Norwegian Spring Spawning Herring and Mackerel. There
is still no fishing agreement between UK and Norway in place after Brexit. The
Norwegian fishing fleet do not have the usual access to fish Mackerel in the UK
fishing zone neither in 2022. As in 2021, the autumn season started earlier than
normal while the fish resource was available in the Norwegian fishing zone.
Normally, this will also reduce the quality of the raw material and lower the
price to the fishing fleet.

Pelagia generates revenue worldwide and, for the FOOD division in particular,
Eastern Europe remains an important market. The current war in Ukraine increases
the risk related to the operations in the FOOD division somewhat. Further, due
to the world economy challenges in 2022 it seems to be an increasing challenge
in several countries to have access to f.ex USD for international payments.

For the FEED division the increase in the Capelin quota has only partly
compensated for the reduction in Blue whiting and Sandeel raw material, but
higher market share increases the volume in Q3 vs Q321. A significant increase
in the quota for blue whiting is expected in 2023. The margins for the FEED
division has increased during 2022 due to the increasing prices of fish meal and
fish oil.

The market demand for the HEALTH division products has remained solid also
through Q3 2022. In 2H 2021, the HEALTH division completed a major milestone in
its project to increase overall production capacity. We expect the effects of
this increase will be seen gradually through 2022 and 2023. Challenges with
logistics, in particular, associated with the US market, remain a risk factor. A
significant price increase for the raw material in the Health division could
negatively affect margins going forward, but due to the factory upgrade the
Health division should be well prepared to compete in the market.

The majority of the long-term bank financing of Pelagia is due in December 2022.
From 31 of December 2021 this financing has therefore been classified as
short-term. Pelagia completed a new 5-year bank financing agreement 10 November
2022.

The Group's ability to utilise its production capacities depends on the supply
of raw materials in the North Atlantic and thus the size of the global quotas
that are distributed between the countries which have a share of these fish
resources. The prospects for the fisheries on which the group bases its
operations in total remain stable going forward. The long-term goal of Pelagia
is to favour the sustainable management of the main fish stocks. At the moment
Pelagia do not see a significant climate risk that should affect the fisheries
and the related value of its assets. Still, long-term it could be a risk that
the fisheries in the North Atlantic are impacted by climate changes.

As for many other companies, the Covid-19 situation has presented challenges for
Pelagia. The employees of Pelagia have made a great effort to maintain normal
operations in all our locations. Pelagia, as a producer of food, health related
ingredients and raw materials to fish and animal feed production, has so far not
experienced a significant change in the demand for its products. In common with
many others in the industry, we have experienced higher costs related to energy
and also associated with our international freight and logistics. These costs
challenges seem to remain through 2022.

No events have occurred after the balance sheet date that have material impact
on the presented quarterly report.

For further information see attached the Q3 2022 Financial Report.

For any questions, please contact:
CEO Egil Magne Haugstad emh@pelagia.com
CFO Rolf Andersen ran@pelagia.com

See www.pelagia.com for further information about the company.

This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act

More information:
Access the news on Oslo Bors NewsWeb site

575719_Financial Report Pelagia Holding AS Q3 2022.pdf