Pelagia Holding AS - Financial Report 2Q and 1H 2025

20 Aug 2025 07:00 CEST

Financial Report 2Q and 1H 2025

Revenues for Q2 25 were 2.431 MNOK (Q2 2024: 2.914 MNOK). EBITDA was 53 MNOK in
Q2 25 (Q2 2024: 322 MNOK). Profit before tax was -118 MNOK in Q2 25 (Q2 2025:
155 MNOK). YTD revenues were 6.189 MNOK in 1H 25 (1H 2024: 5.874 MNOK). EBITDA
was 345 MNOK 1H 25 (1H 2024: 594 MNOK). Profit before tax was 1 MNOK in 1H 25
(1H 2024: 196 MNOK).

As expected, earnings are weaker in 2Q compared to last year due to the
significant drop in fish oil prices reported. This is impacting also salmon oil
prices which have a similar reduction. See further details below.

In Q2 25 Pelagia had an increase in raw material volume in the FOOD division
compared to Q2 2024, but YTD the raw material was lower. The main explanation
for the decrease is the lower quotas of Norwegian Spring-Spawning herring and
especially Mackerel compared to 2024.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. The improved earnings for FOOD YTD are more related to margins from the
stock as per YE 2024. The demand seems to be good for most FOOD products in
2025. The FOOD stock values increased significantly in 2024 due to very high
prices, especially for mackerel. The FOOD stock value is expected to be reduced
gradually through 2025 due to lower quotas. These reductions in production could
give challenges for the FOOD division in 2H.

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 US trade tariffs the effect is still uncertain, but we see that
the tariff of 15% is higher than for UK as an example. That could affect the
exports from Norway. 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, so it is probably more challenging for companies located only in
Norway.

The FEED division also has a decrease in raw material volume in Q2 25 vs Q2 24.
This is explained by a reduction of Blue Whiting and Capelin (zero quota).
Coming out of the El Niño situation in the Pacific the last year anchovy fishing
seasons in Peru gave a high production volume. Due to the better production of
oil, also due to higher oil yields in 2024, the market price for fish oil has
weakened significantly. This has impacted also the price of salmon oil. In total
this has weakened the earnings of the FEED division in 1H. Of the Peruvian 2025
quota about 80% was actually landed so less oil than expected will come to the
market in 2H. The current demand for fish meal is high and stocks are limited.

The market demand for the HEALTH division products has remained sound also
during 2025. With the increased catch and improved oil yields in Peru in 2024 we
saw lower raw material prices for oil to the Omega-3 market. With the reduction
in raw material prices, we also see some uncertainty about the price level in
the Omega-3 market. With the 2021/2022 upgrade of the factory in Ålesund the
HEALTH-division should be 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. This effect is lower in 2Q compared in 1Q as this volume of
high-priced stock is reduced.

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 does 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. The effect of the 15% US
trade tariff is yet to be seen.

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. The last outstanding part of this loan was
bought back mid-august.

Pelagia approved a dividend of 200 MNOK in May 2025 to the shareholders.

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 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 had a
material impact on the presented quarterly report.

We declare in good faith that the half-year financial statements for the period
1 January to 30 June 2025 have been prepared in accordance with IAS 34 - Interim
Financial Reporting and that the information in the financial statements gives a
true and fair view of (the company's and) the group's assets, liabilities,
financial position and results as a whole. We also declare, to the best of our
knowledge, that the half-yearly report provides a true and fair view of
significant events in the financial period and their influence on the
half-yearly financial statements, the most important risk and uncertainty
factors the group faces in the next financial period and significant related
party transactions.

For further information see attached the Q2 2025 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:
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653294_Financial Report Pelagia Q2 2025.pdf