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Osterwal Seafood reported a robust financial performance in the first quarter of 2025, with a 17% increase in revenue to NOK 9.8 billion. Despite a negative fair value adjustment of biological assets, the company achieved a profit before tax of NOK 1.258 billion, marking a 23% increase compared to the previous year. However, net profit was impacted, resulting in a loss of NOK 195 million. The company, currently trading at an attractive P/E ratio of 7.32 and considered undervalued according to InvestingPro Fair Value metrics, maintained its guidance for salmon production in 2025 and anticipates a price recovery by the end of 2025 and into 2026.
Key Takeaways
- Revenue increased by 17% year-over-year to NOK 9.8 billion.
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to NOK 1.9 billion.
- Salmon production volumes surged by 45%.
- The company expects a recovery in salmon prices by late 2025.
- Strong cash performance with NOK 1.5 billion generated from operating activities.
Company Performance
Osterwal Seafood demonstrated significant growth in Q1 2025, driven by increased salmon production volumes and improved operational efficiencies. The company’s focus on technological advancements and facility improvements contributed to better biological performance, including lower mortality rates and enhanced fish quality. These efforts have positioned Osterwal Seafood favorably in the competitive seafood market, particularly in the salmon segment.
Financial Highlights
- Revenue: NOK 9.8 billion, up 17% from NOK 8.4 billion in the previous year.
- EBITDA: NOK 1.9 billion, an increase from NOK 1.7 billion.
- Profit before tax (excluding biomass adjustment): NOK 1.258 billion, a 23% rise.
- Net profit: NOK -195 million due to a negative fair value adjustment of NOK -1.8 billion.
- Earnings per share (excluding biomass adjustment): NOK 2.70.
Outlook & Guidance
Osterwal Seafood is maintaining its 2025 salmon production guidance, targeting 195,000 tonnes in Norway and a total of 211,000 tonnes including operations in Scotland. The company anticipates a recovery in salmon prices by the end of 2025 and into 2026. However, it expects lower volumes in the Pelagia segment in 2025.
Executive Commentary
CEO Werner emphasized the company’s strong market position and growth prospects: "We are in a situation now where we have a lot of volume. We are building market and looking at expected growth next year." Meanwhile, Britt Katrinen Dreyvenes highlighted the improved biological performance: "We have had a very good biological performance within salmon trough in 2024 and also into 2025."
Risks and Challenges
- Negative fair value adjustments affecting net profit.
- Potential volatility in salmon prices impacting future earnings.
- Dependency on biological performance and environmental factors.
- Challenges in maintaining growth momentum in the Pelagia segment.
- Macroeconomic factors and currency fluctuations affecting financial results.
Full transcript - Austevoll Seafood ASA (AUSS) Q1 2025:
Werner, CEO or Senior Executive, Osterwal Seafood: It’s a pleasure for me to invite you to Osterwal Seafood first quarter presentation. I will briefly take you through the highlights of the quarter. Thereafter, I would go through the different segments in more detail. Our CFO, Brett Katrin Dreyvenus, will take you through the financial figures. And then I will end this session by giving our view on the different markets we are operating within.
So starting up, we have had a quarter with quite good Then I’d like to welcome you all to Osterholm Seafood First Quarter Presentation. I will start this session by giving the highlights of the quarter. I will take you more detail through the different segments we are operating within. Britt Katrinen Dreyvenes, our CFO, will take you through more in detail the financial figures for the quarter. And I will end this session by giving our view on the different markets we are operating within.
So starting up, we have had a quarter with quite good activity, in particular in the pelagic segments. And we have also continued the well performing biological performance in Lerou. So in first quarter, we have revenue of billion and EBITDA of just north of NOK1.9 billion and an EBIT of just north of billion. We have a strong balance sheet, total asset of billion, equity ratio of 55% and then a net interest bearing debt of 7,300,000,000.0. If you also include the 50% share we have in Pelagia, you can see on our EBITDA, we are passing the 2,000,000,000 level, which is one of the best quarter ever for our group.
And the difference from last year is that well, I would say mainly is that Leri is delivering an EBT of million better and it’s mainly explained by, I would say, better biological performance. The slaughter volume is up with approximately 1,000 tonnes of pelagic fish on our own quotas, mainly in Chile and in Peru. We are aiming to receive approximately 1,900,000 tonnes of pelagic fish on our factories With Leer half is called Leer in over sea foot, we are aiming to produce and catch approximately 80,000 tonnes of white fish. And hopefully, we are also reaching the aim to be very close to 220,000 tonnes of slaughter volumes in 2025. Starting up, going through the different segments.
Peru are in the middle of the first season in 2025. The biomass detected on the research is one of the highest we have had lately. We have to go back to 2013 before we had a higher biomass than we are seeing this season and back to 2018 to have a higher quota than what we have seen this season. I would say normally first quarter is, I would say, a low catching quarter. But I would say we are doing considerably better in this quarter versus the same quarter last year where we were in the tail of the El Nino.
We have had a good activity in the salt where we have received approximately 66,000 tonnes. We have also ended the second season with approximately 36,000 tonnes in the Center North. And also you can see that the mackerel fishing has been better this quarter versus same quarter last year. But I would say it’s a seasonable low quarter. So it’s more interesting to talk about the second season and of course, another second quarter and the performance so far in the first season.
So quarter was 3,000,000 tons. That means that in our case, we are catching we are supposed to catch 210,000 tons with our 7% quota. So far, it’s caught around 1,200,000 tons of the total 3,000,000 tons in Peru, and we have caught close or just passed 90,000 tons. Obviously, yield on both fishmeal and fish oil is normal, 23.5% fishmeal yield, approximately just sort of 3% on fish oil yield. So the start has been good and we have quite good activity around all our three factories in the Center North, Coisko, Shanghai and Pisco.
In Chile also, record high catches in first quarter, ’50 ’5 thousand tonnes versus 47,000 tonnes same quarter last year, which were also a very good quarter. So high production to frozen products. And we came into the year with a quite high stock, so there’s also a bit pressure on margins. Also the Sardine Fishing recovery, so we have purchased, I would say, normal level around 27,000 tonnes in first quarter. So far this year, it’s around 36,000 tonnes.
And also, if you look at the Jack Mack, well, we are now surpassing 64,000 tonnes. So temporarily now the vessels we are having is lying idle waiting for transferring of the quota for the high seas vessels normally catching outside 200 miles. Still unclear how the distribution of the quota will be divided between vessel and the industry vessel. Best estimate today is that it’s going to be 70% to the industry, down from 90% and up from 10% to 30% for the coastal vessels. And we don’t know if this is going to be valid this year or if it’s going to be delayed until next year.
So I would say how it looks today is that quota we had last year will be the same for 2025, around 64,000 tonnes. This is what we have been guiding on, but it’s a potential upside of increasing our own quota to 81,000 tonnes if the decision is being delayed for 2026. North Atlantic quotas down at approximately 500,000 tonnes, and this is the basis for the raw material intake for Pelagia. So we are also expecting lower volumes both for human consumption of feed and food segments in Pelagia. So starting up, looking at Pelagia, had a quite good start of the season in fishmeal and fish oil, mainly based on blue whiting, but also trimmings from pelagic whitefish and salmon, and a volume of 332,000 tonnes in first quarter, down from 380,000 tonnes same quarter last year, and we are estimating volumes 50,000 tonnes in 2025 down from 2024.
When it comes to the Food segments, we have had catches on herring and catches on Atlantic macro, which we have produced in our field factories. And it’s been executed in a quite good manner and delivered a better result first quarter this year versus the same quarter last year. So all in all, looking at Pelagia, I would say that result is more or less in line And revenue of 3,700,000,000.0, EBITDA NOK 20,000,000 above first quarter last year, just below 300,000,000 and EBIT of NOK 175,000,000. Now we are coming to the Salman, and it’s quite pleasant for us to see that the measures we have done on both genetics, raw and smolt and also how we are operating in the sea has improved our biological performance. So despite spot prices is down with 90 per kilo, we are delivering, I would say, considerably better in Lere compared with the same quarter last year, NOK260 million on EBIT.
Lere half is lower quota, we’ll come back to that, but also compensated on higher prices. And we are delivering quite good in our WAP sales and distribution better than last year, which also was a very good quarter. So volume wise, 38,000 tonnes, it’s up at approximately 45%, is divided with 7,000 tonnes in Lere Rova, 16 Thousand tonnes in Lere Met and 15,000 tonnes in Le Re Chotol. EBIT per kilo all inclusive NOK23.5 per kilo, down from NOK25 per kilo. But as I said, on much lower spot prices.
EBIT per kilo divided by the different geographical areas is approximately NOK 30 per kilo in the North, NOK32 per kilo in the Mid and also NOK18 per kilo in Levei Chut also. All in all, we are improving our performance, lower mortality, better growth, higher slaughtering volume and also better quality on our salmon slaughtered. Maintaining our guiding on twenty twenty five volumes, 195,000 tonnes in Norway and expecting with our 50% share of Scottish to reach a level of 211,000 tonnes in 2025. When it comes to the whitefish, I would say we are delivering if you look at our inventory, we had first quarter more or less on the same level as we did last year in the first quarter of twenty twenty four, but also based on a lower share of the cod quota, which is the of the white fish sector. So half of the codfish is quarter to quarter, leaving the remaining quota on the same level as it was in 2024.
So you can see it’s a drop of 32 of cold quarter in 2025 and Hadacrontha is down by 2%. Sales quota is also down, but it’s been compensated by crude prices, which has been 35% higher in this quarter, had a quota 60% higher in this quarter and safe quota. Sate prices has been approximately 100% up versus same quarter last year. Then I will give the floor to Britt.
Britt Katrinen Dreyvenes, CFO, Osterwal Seafood: Thank you, Werner. We start by summing up the raw material intake. And as you can see, there has been an increase in the volumes in South America, and that is mainly because there has been a very good fishing going on in the Southern zone of Peru, but also a good start of the year for the fishing activity in Chile. In the North Atlantic, there is some decrease in the raw material intake, and that is subject to the decreasing quotas in that region. There has been a very good biological performance within salmon trough in 2024 and also into 2025, and we have higher slaughtered volumes in first quarter this year compared with same quarter last year.
Arne has taken you through the highlights, so I will not repeat. But this graph gives a very good picture of where our where the increase in revenue and earnings are coming from. And as you can see, Lera Sifu Group contributes the majority of that with the Ustral Group as two. Looking at first quarter, revenue of almost 9,800,000,000.0, up 17% from NOK 8,400,000,000.0, EBITDA adjusted of just above NOK 1,900,000,000.0, up from almost SEK 1,700,000,000.0. And we have some increase in our depreciation, and you have probably seen that we have had an investment program going on, especially within Leroy in new technology and also improvement in small quality and the facilities within white fish.
Looking at the line income from associates, and that is NOK 35,000,000 this quarter, down from NOK 62,000,000. On has already been through Pelagia in the beginning of the presentation, and they have had some increase in their earnings in the quarter. Looking at Scottish Sea Farm, they have had a decrease in their earnings in the quarter, and that is because of the substantially lower price achievement first quarter this year compared to the same quarter last year. The slaughtered volumes are up, and they have also had a very good biological performance. This gives us an EBIT, including income from associate, of a little bit above SEK 1,400,000,000.0, up 17% from NOK 1,200,000,000.0 same quarter last year.
I have to mention this fair value adjustment related to biological asset this quarter because it’s quite substantial and it’s negative. It’s minus 1,800,000,000.0. In same quarter last year, it was positive with NOK 62,000,000. So this gives a negative operating profit in the quarter of minus $464,000,000. Looking into profit before tax.
And if we take it before the fair value adjustment, it’s 1,258,000,000.000, up 23% from SEK 1,000,000,000 in first quarter last year. However, due to the negative biomass adjustment, we have a profit before tax, which is negative, minus $610,000,000. And the net profit is also negative, minus SEK 195,000,000. And this gives close to zero earnings per share. But earnings per share, excluding the biomass adjustment, is NOK 2 point 7 0.
I would recommend that you go into the webcast of Leroy to have some further information of their first quarter, but we can sum up here. The revenue was close to SEK 8,000,000,000, up from SEK 7,100,000,000.0. The increase in revenue was 12%, and that is that reflects the higher slaughtered volumes of salmon and trot in the quarter, but also higher sales volume within the WAP sales and distribution segment. Within wild catch, there has been reduced catch volumes because of the reduced quotas, but there has been a very positive price achievement in the quarter, which has, to some extent, compensated the lower quotas. EBITDA adjusted came in just below SEK 1,500,000,000.0, up from SEK 1,200,000,000.0 same quarter last year.
And the EBIT was SEK 1,049,000,000.000, up from SEK $843,000,000 Looking at the Austral group, as normal, there is a lower activity in first quarter. However, we are very glad to see that this year, it has been a good activity in the Southern zone of Peru. And the plant in South in Ilo has bought over close to 67,000 tonnes of raw material in first quarter this year, and they had zero raw material in the same period last year. The sales volumes for fish meal, fish oil and also frozen and fresh products are substantially up compared to same quarter last year. However, the price achievements are down.
For fish meal, the prices are down close to 24% and for fish oil, 69%. That said, it was a very low volume of fish oil sold in first quarter last year. The revenue in first quarter was a little bit above NOK 1,100,000,000.0, up from NOK $570,000,000 in first quarter last year. EBITDA of 187,000,000 and EBIT of SEK 126,000,000, up from SEK 57,000,000 in first quarter in ’20 ’20 ’4. Food Corp.
Has also had a very good start of the year. They have got almost 55,000 tonnes of their own quota of horse mackerel. In addition, they have purchased sardine and anchovy, a little bit over 27,000 tonnes. Also here, we have had increased sales volume of finished products. And the same pattern, prices are down.
Fish meal down by 21% and frozen down by 9%. And we have also seen some pressure on the prices for frozen in the start of second quarter. Revenue of $425,000,000, EBITDA of SEK 130,000,000 and an EBIT of SEK 150,000,000, approximately in line with last year when the EBIT was $108,000,000 Looking into the small salmon farmer on the Western Coast called Kobbeviko Furuhollmann Obtredt. They have slaughtered substantially lower volume in first quarter this year compared with last year, 1,900 tonnes, down from 3,200 tonnes. They sell all their fish in the spot market, and the spot prices are down with NOK 19 per kilo year on year.
We have also seen an increase in cost. So their EBIT per kilo is NOK 27 in first quarter this year, down from NOK 33 same quarter last year. Brundenbirkland, the operation there now are the two fishing vessels fishing for snow crab. Last year, they also had the two pelagic fishing vessels. Those two vessels were sold in June in 2024.
The two vessels fishing snow crab has caught and produced six thirty five tonnes finished products in the quarter. Last year, they produced eight twenty five tonnes in first quarter. Of this production of six thirty five tonnes, they have sold five eighty five tonnes, and the prices has almost doubled compared with first quarter last year. So this is giving very good earnings for the company. The revenue was SEK 159,000,000, EBITDA SEK 66,000,000 and the EBIT, 62,000,000.
And last year, the earnings and revenue, then it was the two pelagic vessels that contributed to the majority of the figures. But that said, they have finalized the quotas now in April. So the vessel those two vessels will have no further activity for the remaining part of 2025. Looking at our total assets. By the March, it was 53,000,000,000, almost at the same level as by end March in 2024, but down from December 2024.
And just to comment one of the line, we have talked about this fair value adjustment related to biomass, and you can see that is substantially down compared with the end of twenty twenty four. We have a strong balance sheet, an equity ratio of 55%. The net interest bearing debt by end March is 7,300,000,000.0. There has been a very good cash performance in first quarter. The cash from operating activities was a little bit above NOK 1,500,000,000.0, up from close to NOK 600,000,000 in same quarter last year.
Some increase in the net investment in CapEx. And as I’ve mentioned already, we have a program going on in Ljere for some additional CapEx in addition to the normal maintenance CapEx. So cash from investing activities, minus SEK $533,000,000, up from minus SEK $4.84 same quarter last year. Looking into financing activity. We have paid down quite a lot on the short term credits.
So cash from financing is minus SEK 1,500,000,000.0, and that gives us an end position with cash in the quarter of SEK 5,200,000,000.0.
Werner, CEO or Senior Executive, Osterwal Seafood: Then we’ll end this session by giving our view on the different markets we are operating within. And starting with the fishmeal market. So by the end of week 17, you can see that total increase from the largest producers of fishmeal in the world is up with 5.4%, but it’s mainly driven by the increase from Peru with an increase of 20. You see prices has been, I would say, high quality fishmeal just north of $1,600 per tonne. And there is a $240 per tonne discount on lower quality fishmeal.
And again, looking at the main market China, stock situation at the moment is up 13 versus same period last year, just north of 300,000 tons. But the offtake is quite good, just below 27,000 tonnes a week at the moment. And you can see that the prices in China is higher than the Peruvian prices, stimulating to the increased trade. When it comes to fish oil, you also see that the fish oil production is up approximately 17% versus the same period last year and it’s mainly driven again by Peru, which is up with 54%. It’s been quite good seasons, both in terms of volumes and yields, the latest three seasons, including the one we are having now.
So you can see also it has an impact on prices. For feed purposes now in Peru, it’s traded around $2,600 per tonne with a premium of approximately 708 hundred dollars per tonne into the omega-three grade. When it comes to the Atlantic salmon supply, we finally have had a very good year, and we are expecting an increase of 6.4% globally. And I could see Norway is up by 6.7%. And I would say that the growth all over Norway has been very good in the first four to five months.
So if the growth is going to be in total 6.7%, we are expecting that the next coming months to the end of the year is going to be more or less in line with how it was in 2024. We are in a situation now where we have a lot of volume. We are building market and looking at expected growth next year. We also feel we are in a good position also for prices to recover by the end of twenty twenty five and also into 2026. Prices considerably lower this season versus last season same year both first quarter and so far into the second quarter.
And main reason for that is again has been much higher slaughter volume and also the quality of the fish we have been slaughtering in Norway has been considerably better than same period last year. Markets are good, consuming on the lower prices. EU Six Percent, other markets driven by China up 5% and U. S. Markets still important for the consumption of salmon up also six percent.
So in the end, we are happy with the performance in the first quarter when it comes to the salmon activity. We are also seeing so far positive development into second quarter. And again, we have the highest net production in sea in the first quarter, reduced modality, declined cost and also have a higher superior share. So all in all, in terms of biological performance, we also are expecting a good development into the second quarter. The reduction in whitefish quota has been compensated, I would say, so far with higher prices for the main species, which is a bit better than what we expected in the beginning of the year.
South America, First season is well on its way, 3,000,000 tons. So far, point 2,000,000 tons is caught. In our case, we have caught just over 40% of our expected quota. And it’s also going to be exciting in the next month to see the development, how the fish is going to be distributed between coastal and industry vessel in Chile and from when it will have an effect. Pelagia delivering once again a good quarter, expecting a bit lower volumes also going forward.
But second quarter is normally a seasonable low production quarter, and we are making our sales ready for the UMAC assumption. Fishing is going to start up with approximately within third quarter. So that was, what we were, thinking to say, and thank you for listening, and have a good day.
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