Pelagia Holding AS - Quarterly Report Q4 2024 and preliminary figures 2024

28 Feb 2025 07:00 CET

Pelagia Holding AS - Quarterly Report Q4 2024 and preliminary figures 2024

Revenues for Q4 24 were 4.965 MNOK (Q4 2023: 4.207 MNOK). EBITDA was 293 MNOK in
Q4 24 (434 2024: 443 MNOK). Profit before tax was 41 MNOK in Q4 24 (Q4 2023: 272
MNOK). YTD revenues were 15.038 MNOK as per Q4 24 (YTD Q4 2023: 13.001 MNOK).
EBITDA were 1.402 MNOK as per Q4 24 (YTD Q4 2023: 1.725 MNOK). Profit before tax
was 564 MNOK as per Q4 24 (YTD Q4 2023: 1.027 MNOK).

In Q4 24 Pelagia had a decrease in raw material volume in the FOOD division
compared to Q4 2023. The main explanation for the decrease was a better
availability of Mackerel in the Norwegian fishing zone during Q3. Less mackerel
was therefore caught in Q4 in the UK fishing zone by the Norwegian fishing
fleet. For Mackerel this was therefore mostly a timing issue. The reduction was
partly also explained by lower quota for Norwegian Spring spawning Herring. The
demand seems to be good for most FOOD products into 2025. The FOOD stock values
have increased significantly in 2024 due to very high prices especially for
mackerel. The FOOD stock value will be reduced gradually through 2025. The
mackerel quota in the North Atlantic will be reduced about 22% from 2024 to 2025
and there will be a zero quota for Capelin. These reductions will give
challenges for the FOOD division in 2025.

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. As per today
Pelagia has no material assets related to Ukraine recorded in the balance sheet.
In relation to the current turmoil on possible trade tariffs there are currently
no indications of further tariffs on the products of Pelagia, but the inherent
risk is increasing. Following the landing obligations introduced in UK/Scotland
a part of the raw material historically landed in Norway by UK/Scottish vessels
now partly must be landed in Scotland. In 2025, the obligation to deliver in
Scotland increases from 40 to 55%. This increases the competition between the
Norwegian bidders for raw material. Pelagia is present with factories in both
markets.

The FEED division has a small decrease in raw material volume in Q4 24 vs Q4 23.
This is explained by less collection of dead fish from the salmon aquaculture
industry. Coming out of the El Niño situation in the Pacific the last anchovy
fishing seasons in Peru gave a more normalised production volume. Due to the
better production of oil, market prices for fish oil have weakened somewhat but
we expect the price to stabilise in 2025. The current demand for fish meal is
high and stocks are limited. We expect the FEED working capital value to
normalise during 2025 due to the lower prices.

The market demand for the HEALTH division products has remained sound also
during 2024. With the increased catch and improved oil yields in Peru this last
season we see lower raw material prices for oil to the Omega-3 market. With the
reduction in prices, we also see some uncertainty about price level in the
Omega-3 market. With the 2021/2022 upgrade of the factory in Ålesund the
HEALTH-division should well prepared for the competition in the Omega-3 market.
Further, the factory is also being prepared to produce oil-products based on
North-Atlantic raw material which will broaden the market for the facility. With
more raw material being available from Peru the stock value has increased
significantly vs last year. A reduction is expected gradually until Q3 when new
oil will be available from Peru. Margins are negatively affected for a period as
raw materials purchased in the period with limited supply and high prices are
consumed. Margins should improve from Q2 2025.

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 long-term. Still, short-term there can be
variations in quotas and the available raw material. The long-term goal of
Pelagia is to favor 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.

In common with many other companies, Pelagia can also be impacted by changes in
trade tariffs and other trading obstacles following the more uncertain economic
and geopolitical environment developing into 2025.

In January 2025 Pelagia issued a new unsecured 5,5-year 1000 MNOK bond. The bond
had a coupon of 3m NIBOR + 2.75% p.a. The main objective was to refinance the
900 MNOK bond loan due in Dec 2025. Pelagia bought back bonds with a value of
about 561,6 MNOK and the remaining bonds held by investors has a value of about
338,4 MNOK.

In October, the group lost a court case in the District Court related to the
delivery of wastes and by-products from production in the HEALTH division. Due
to the development of the product portfolio, a smaller volume has been sold
under contract to the buyer of by-products. Due to the reduction in the
delivered volume under the contract, the company has been sentenced to pay the
customer a compensation of NOK 53 million including costs and interest. Pelagia
strongly disagrees with the verdict, which will be appealed. Pelagia will
normally take full provisions for potential losses, but due to, in our opinion,
several fact-based errors in this verdict our provisions do not cover the cost
of the temporary verdict.

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

For further information see attached 4Q 2024 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

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640057_Financial Report Pelagia Q4 2024.pdf