Nordic Aqua Partners – Result for second half year 2021
- Project on time and on budget – Hatchery completed
- Inlay of first eggs in hatchery completed in Q1 2022 [March 9th, 2022]
- Installation of AKVA Group RAS technology started in December 2021 and is progressing as planned
- Market for Atlantic salmon in China continues to grow
- Strong salmon price development in the Chinese market
- Capex of 94 MDKK in period H2 2021 and 112 MDKK for 2021 out of total 370 MDKK
- Available liquidity of 499 MDKK as of 31.12.2021, including cash and undrawn credit facilities
With the groundworks and site preparations completed in the first half year, focus during the second half has been completion of the facility for the hatchery facility and RAS 1, 2 and 3 - “the small building”, which will also accommodate administration and other support functions. Despite some challenges following a typhoon in August, the hatchery was completed largely according to plan, and the first of inlays of eggs took place in March 2022.
Commenting on the development, Chairman Ragnar Joensen, said:
“It is exciting to see the quick pace of development of our facilities, with the hatchery and parts of our administration facilities now in place. The first inlay off eggs is a major milestone for Nordic Aqua Partners, now entering the operational phase of our farming operations. Indeed, we still have some way to go with constructions, but together with our competent and resourceful partners, I am confident that we will deliver according to plan.”
“The small building” is expected to be completed within Q2-2022. Construction of the facility housing RAS 4/5/6/7 and 8, as well as purging and processing plant proceeds as per plan, with expected completion of the facility during Q4-2022, and completion of all RAS equipment during Q3-2023. The plan for production expansion is split in three stages, with the ongoing Stage 1 reaching an annual capacity of 4,000 tonnes in Q1-2024, while Stage 2 and 3 are expected to bring total annual capacity to 20,000 tonnes by 2027.
The local authorities are responsible for the construction of infrastructure and facilities through the lease agreement. Nordic Aqua Partners is very satisfied with the dedicated support shown by local authorities, which have delivered on time and with a committed interest in ensuring steady progress. The lease agreement significantly reduces the capex risk to Nordic Aqua Partners, as any possible cost overruns on construction of facilities, infrastructure and facilities is with the landlord.
Throughout the planning phase, Nordic Aqua Partners has continued to work with their RAS supplier, AKVA Group to optimize the design, which now allow for expansion up to 20,000 tonnes annual production on existing land, up from previously 16,000 tonnes.
The lease agreement is for the initial 8,000 tonnes capacity, however, a Letter of Intent to expand the annual capacity to reach 20,000 tonnes on similar terms and principles is in the process of being discussed with the local government. -
Total capital expenditure during the second half of the year was DKK 94 million, mainly related to AKVA Group RAS technology. Capex will gradually increase as construction accelerates. As per 31 December 2021, accumulated capex spent was DKK 112 million. Available cash at year end was DKK 499 million.
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 for Stage 1 and Stage 2 has started. As land, infrastructure, and buildings are leased from the local government, 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 of total four inlays scheduled for 2022. Production cycle is estimated to two years, which means the company is on time for first harvest in Q1 2024.
By the end of 2021, the organization counts 20 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 company has initiated a project to investigate all aspects of a possible accelerated expansion plan to reach a capacity of 20,000 tons by 2027. This process is expected to be concluded by end 2022.
As a local farmer of Atlantic salmon to the Chinese market, Nordic Aqua Partners is focusing on the domestic salmon market and how that is expected to develop. The company will be able to offer sustainable and locally farmed fresh salmon on a 24/7 flexible delivery plan, with full traceability from egg to fully grown salmon, thus guaranteeing quality, food safety and freshness. 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.
Nordic Aqua Partners presented its second half year 2021 results by webcast on Monday March 21, 2022, at 10:00 a.m. CET. Ragnar Joensen, Chairman Nordic Aqua Partners, Hjalti Hvítklett, CFO Nordic Aqua Partners and Ove Nodland, CEO Nordic Aqua Ningbo will be presenting the company. The presentation will be in English.
The presentation can be accessed at www.nordicaquapartners.com, or with the following link: https://register.gotowebinar.com/register/680551939583202571
For further information please contact
Hjalti Hvítklett, CFO Nordic Aqua Partners