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Proximar Seafood AS reported its Q2 2025 earnings, highlighting significant revenue growth and strategic advancements in the Japanese market. The company posted a revenue of NOK 38 million, including NOK 13 million from insurance payouts, and a net loss of NOK 94.2 million. Despite the loss, the company emphasized its competitive position as the sole Atlantic salmon producer in Japan. The stock price experienced a slight decline of 0.87% following the earnings release, continuing a challenging period that has seen shares fall 71.8% over the past year. According to InvestingPro analysis, the stock is currently trading near its 52-week low of NOK 0.11, suggesting potential undervaluation based on their proprietary Fair Value model.
Key Takeaways
- Revenue for Q2 2025 reached NOK 38 million, with insurance payouts contributing NOK 13 million.
- The company harvested 321 tonnes of Atlantic salmon, achieving 99% superior grade production.
- Proximar Seafood is the only producer of Atlantic salmon in Japan, offering a significant cost advantage.
- The stock price decreased by 0.87% post-earnings announcement.
- The company plans a comprehensive refinancing strategy, including a NOK 150 million rights issue.
Company Performance
Proximar Seafood’s performance in Q2 2025 marked a notable improvement compared to the same period last year, where no revenue was reported. The company has successfully positioned itself as a key player in the Japanese market by leveraging its local production capabilities. Despite a net loss of NOK 94.2 million, the company remains optimistic about its future prospects, citing robust demand for Atlantic salmon in Japan. InvestingPro data reveals analysts expect significant sales growth of 88.5% this year, though the company’s financial health score remains weak at 0.92. For deeper insights into Proximar’s market position and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Financial Highlights
- Revenue: NOK 38 million in Q2 2025, including NOK 13 million from insurance payouts.
- EBITDA: Minus NOK 55.2 million.
- Adjusted EBITDA: Minus NOK 27.7 million.
- Net Loss: NOK 94.2 million for Q2, NOK 150.4 million for the first half of 2025.
- Total Assets: Approximately NOK 1.5 billion.
Outlook & Guidance
Proximar Seafood’s future guidance includes a gradual increase in harvest weights and a focus on achieving full facility utilization by 2027. The company is in the early planning stages of expanding its second facility and expects to harvest 900,000 fish in 2025 and 1,000,000 in 2026. Additionally, a comprehensive refinancing plan is underway, including a NOK 150 million rights issue and amendments to convertible bonds.
Executive Commentary
Joakim Nielsen, CEO of Proximar Seafood, highlighted the company’s achievements, stating, "We have now reached a significant milestone, just harvesting more than 1,000 tons of Atlantic salmon." He emphasized the company’s cost advantage and focus on operational efficiency: "The fundamentals remain robust with a significant cost advantage."
Risks and Challenges
- Supply Chain Issues: Potential disruptions could impact production and distribution.
- Market Saturation: Increased competition from locally farmed coho salmon may affect market share.
- Macroeconomic Pressures: Fluctuations in exchange rates and economic conditions could impact profitability.
- Operational Challenges: Achieving full facility utilization and managing production costs remain critical.
- Regulatory Risks: Changes in Japanese import regulations could affect market dynamics.
Q&A
During the earnings call, analysts inquired about the expansion of the second facility, which is currently in the early planning stages. Questions also focused on the company’s harvest targets for 2025, with Proximar aiming to harvest 900,000 fish, though the exact weight remains uncertain. Additionally, the company has initiated a business interruption insurance claim process to mitigate potential financial impacts.
Full transcript - Proximar Seafood AS (PROXI) Q2 2025:
Ulkerstad Willemsen, CFO, Proximar Seafood: Hello, and good morning, everyone, and welcome to the presentation of the Second Quarter and First Half twenty twenty five for Proximar Seafood. The presentation will be given by CEO, Joakim Nielsen in Japan and myself, CFO, Ulkerstad Willemsen here in Norway. As usual, we start by addressing the main highlights of the quarter before giving you an update on the sales and marketing. We will then share the status of the production, followed by going through the financial summary and the ongoing refinancing plan. Finally, we will go through the outlook before summing up.
And with that, I’ll hand you over to Joakim.
Joakim Nielsen, CEO, Proximar Seafood: Thank you, Olok, Keshe, and good morning. Proxima continued harvesting on a weekly basis through the quarter, although the volumes were lower than initially planned, reaching a total harvested amount of three twenty one tonnes HOG for the quarter. We continued the impressive results of above 99% superior grade, demonstrating good performance when it comes to fish health and water quality. The average harvest weight was only 2.3 kilograms HOG, which is below our target. But as previously communicated, this follows the restricted feeding regime, which continued through the quarter following the biofilter incidents in the 2024.
This also impacts the average price achievement negatively. We continue to see strong prices achievement for the market size fish around 108 NOx per kilogram for the quarter, but following larger volumes of below market sized fish, the average price achievement was around 75 NOx per kilogram and substantially below our expectations. Since April, Fuji Atlantic salmon is being served at Expo in Osaka by the large Japanese sushi chain, Sushiro, which is great marketing for us. And Proximaro was also invited to Expo to hold a presentation in the June. Through the quarter, we worked with high intensity on the upcoming refinancing of part of our debt.
Unfortunately, the progress was affected by the mortality incident in the May, which impacted the progress and timeline. The negative impact from lower volumes and price achievement was spread short term as several more comprehensive financing plans for the longer term were being explored. And Christian will revert on this topic later in the presentation. Finally, towards the end of the quarter, we could restart the last module following the biofilter repairs, meaning that we, after more than six months of reduced capacity, finally got back on track. The lack of capacity in the grow out is also the reason for the challenges seen in terms of harvest volumes and average harvest weights.
And we should now see improvements as we move forward. We are on track for the longer term considering the number of batches and individuals currently in production, but the reduced feeding in the grow out has naturally impacted the biomass growth negatively also in the second quarter. And the standing biomass was approximately 1,300 tonnes at the June. When it comes to the market situation, the Japanese consumption is robust and we expect to see increased demand in the long term. We have also seen the drop in prices from very high levels last year, positively affecting demand amongst the Japanese consumers.
2025 remains muted in terms of market prices with expected recovery in 2026, which is also reflected in the forward prices. As for the implied import cost to Japan, this remains robust and steady and illustrates well the cost advantage and price protection for Proximar. We see that the import prices remain at levels well above NOK 100 per kilogram. And the numbers here are impacted by contracts, but still present spot present spot level still with present spot levels, we see pricing around 100 NOK per kilogram. As we’ve said on many occasions previously, Proximar is not depending on high salmon prices, but the significant cost advantage by local production in Japan, which is one of the larger established markets with the highest transportation costs associated with it.
Now from the import prices and associated transportation costs, which assess the pricing in the Japanese market for Atlantic salmon, we remain optimistic on the outlook. Having said that, we do expect the global prices to recover from the current levels, which are not sustainable over time and again contribute to higher margins when we look into 2026 and beyond. Unfortunately, the average achieved price for Proxima is below the reference price, but this is due to a large portion of below market size fish, which has been receiving much lower prices as mentioned. This fish has also been competing with the locally farmed coho salmon in Japan, which is a seasonal product and large volumes coming out in May and June. And the co op is also a lower priced fish, which has added to the price pressure of the segment below three kilograms.
When looking at the segment above three kilograms, we continue to receive good prices and price premium compared to imported salmon. We have now reached a significant milestone, just harvesting more than 1,000 tons of Atlantic salmon live weight since starting first harvest in September. This is a great achievement and I’m even more proud to say that we have so far been able to deliver above 99% superior grade, showing high quality and good taste. We know the reason for the lower average harvest weights following a prolonged period of restricted feeding, which impacts both growth and size distribution. As we look forward, we expect this to normalize and contribute to raising our average price achievement.
As said, the prices for market size fish is robust and we’re currently receiving about NOK 100 per kilogram for this fish. Now the average price achievement for second quarter was 75 NOx per kilogram and 85 NOx per kilogram since the start of harvest. But this reflecting the average sizes of 2.3 kilogram for the second quarter and 2.5 kilograms from first harvest. As mentioned, Proximar was invited to hold a presentation at Expo in Osaka, which again adds to the positive interest and attention we receive in the Japanese market. We’ve also been covered in several media channels through the quarter as well as on national TV, and our efforts to build our brand and differentiate our product from imported fish and possible future competitors continues with high dedication.
And we are continuing to also receive interest from outside of Japan, primarily from the Asian region. It’s well known that we’ve had our challenges with the feeding following late equipment installation and biofilter incidents in 2024, all these leading to restricted feeding for a prolonged period of time. I’m therefore very pleased that we are now finally back to full utilization and regular feeding is resuming. The link between growth rates and feeding is practically 100% correlated. And going forward, we therefore expect to gradually increase harvest weights and get back to the original production plan.
At the same time, we need to harvest fish to make space for later batches, and our key priority is to get back to our targets for 2026. The fundamentals are supportive, and we see good fish health, high survival rates, around ninety nine percent when excluding incidents. When it comes to water quality, this remains good and stable, although we’ve had some challenges with temperatures in July and August following the heat wave in Japan. This has nevertheless resolved with additional cooling capacity now in place. So with this in mind, we are therefore confident in getting growth curves back on track and seeing increased harvest ways going forward.
We’ve also initiated a more extensive sampling in July and August, and we’ll continue with this going forward to better monitor growth and performance. And the results are so far show that growth is aligned with feeding levels. Currently, the standing biomass is 1,400 tonnes in the entire facility, and we are continuing now on regular feeding. I will now hand over the presentation to Ulkesdan to go through the financials and outlook.
Ulkerstad Willemsen, CFO, Proximar Seafood: Thank you, Joakim. Let me start by saying that we continue to report on a relatively simple format since we still have modest harvesting. We therefore don’t report any figures per kilo and we haven’t yet separated the cost base into farming and non farming elements. We plan to do so from Q4 this year as the company ramps up production and harvesting. Then looking at the figures, we had sales of about 24,000,000 in the second quarter and insurance payouts from the biofilter repairs of approximately NOK 13,000,000, yielding NOK 38,000,000 in revenue and other income in the quarter.
For the first half of the year, the figure was NOK 68,000,000 compared to NOK 0 for the same period last year. We report an EBITDA in the quarter of minus 55,200,000.0. Adjusting for two special one off items and the fair value calculation, we had an adjusted EBITDA of minus SEK 27,700,000.0 in the quarter. In addition to the one offs, the EBITDA deviation from expectations also relate to lower price achievement and lower harvesting volumes than anticipated. The net financials were negative by SEK 19,700,000.0, and we are then in total reporting a loss of SEK 94,200,000.0 before tax for the quarter and NOK 150,400,000.0 negative for the 2025.
Looking at the balance sheet, we held assets total assets of approximately 1,500,000,000.0, where about 90% were long term fixed assets. The inventory and biological assets have more than doubled since the second quarter last year and stood at SEK 120,000,000 at the June. The equity was just over SEK $223,000,000. At the debt side, almost all of our liabilities are now current. And let’s therefore move over to looking at the ongoing refinancing process.
As announced on July 9, Proximar is currently executing a comprehensive refinancing plan, which will support the liquidity situation while at the same time simplifying and strengthening the company’s balance sheet. The plan includes both new equity as well as amendments and refinancing of the company’s debt capital. We have long explored alternative financing options. However, due to the experienced operational issues, it has not been possible to conclude within the required timeframe. And therefore, this plan currently offers the most viable and concrete solution for refinancing and future positioning.
Looking into the details of the plan, it includes firstly, a fully underwritten 150,000,000 rights issue, securing equal treatment to all shareholders, big and small, with listed tradable rights. Secondly, amendments to the convertible bond where Proximar will offer its bondholders a temporary period to convert bonds to shares at the conversion rate of NOK 1 per conversion share, meaning the same level as in the rights issue and propose an amendment to the bond terms whereby the maturity date of the bonds is extended by fifteen months at 5% interest rate per annum. Thirdly, an extension of the syndicated bank loan in Japan in two stages: first, until the end of the year and second, until the August 2026, following completion of the planned rights issue. The final documentation process is currently ongoing for this. And finally, the other loans maturing in the second half of twenty twenty five will have their maturity dates extended, including the shareholder loan of NOK 104,200,000.0.
We will announce the further details and timetable for the rights issue as well as the proposals made to the holders of the bonds in due course. So let’s then move over to the outlook for the rest of the year and beyond. As mentioned by Joakim, we have now finally restored full capacity in our facility and hence look forward to having the weights and harvesting numbers gradually picking up. This will also drive the financial performance as more of the harvested salmon will be above three kilo hog, yielding premium pricing. While there still is uncertainty related to growth rates and harvest sizes over the coming months, the fish scheduled for harvesting in the second half of this year and in next year remain intact in our facility.
We have about 2,200,000 individuals currently in stock and expect to harvest approximately 900,000 fish this year and 1,000,000 fish in 2026. Since July, more extensive sampling has started to monitor growth and performance. A more detailed guidance for 2025 and 2026 will be provided in conjunction with the prospectus for the rights issue and will be based on the results of this sampling program. Even though we have experienced several operational challenges over the last year, we have at the same time proven the ability to produce premium Atlantic salmon, supported by good system performance. Therefore, the long term outlook remains strong.
And following the coming gradual ramp up, we aim for full utilization of the facility in 2027. I will now hand it back to Joakim for the summary.
Joakim Nielsen, CEO, Proximar Seafood: Thank you, Wolgester. Again, I would like to emphasize the important milestone achievement with above 1,000 tonnes of high quality Atlantic salmon harvested from our facility in Japan. I believe the 99% superior share, low natural mortality and good feedback on taste demonstrates our facility’s ability to produce and deliver. The low harvest weight, which also impacts the price achievement are clearly related to lower feeding through a prolonged period of time. As we’re now finally back to 100% utilization, feeding is resuming according to the production plan, and we expect the growth curves on harvest waste to also get back on track.
The fundamentals remain robust with a significant cost advantage and solid price levels despite weak global market prices for salmon. We’re therefore uniquely positioned as the only producer in the Japanese market. And with the full utilization, we expect to gradually get on track with good earnings and showing good profitability. And with these words, we are concluding our presentation and we’ll open up for questions.
Ulkerstad Willemsen, CFO, Proximar Seafood: Very good. Then we are ready to go through the questions as they have come in. So far, there is one question regarding the future of the company in terms of expansion. Joakim, you can answer this. When do you expect to start building and have financial support for your second facility?
Joakim Nielsen, CEO, Proximar Seafood: Well, as we’ve said before, we are now focusing on getting Stage one up and running smoothly. And as we now proceed, we are also considering some alternative locations, but it’s very early stage planning. And we will proceed as we get more track record and also see more attractive financing options going forward for a second stage expansion.
Ulkerstad Willemsen, CFO, Proximar Seafood: Very good. The second question is about the expectation of harvesting this year. On June 23, you guided a harvest of 3,000 tonnes hog in 2025. What is your updated harvest target for the year?
Joakim Nielsen, CEO, Proximar Seafood: Yes. We have now provided guiding in terms of number of fish. The uncertainty is related to the average harvest weights. We have now initiated a more extensive sampling scheme, and we’ll also get more data points before we can come back with a more specific guiding in terms of volumes expected in conjunction with the prospectus.
Ulkerstad Willemsen, CFO, Proximar Seafood: Very good. Then there is a question about the write down of the receivable that we have in our accounts. So I can what that is regarding, so I can take that. So this is also described in the notes to the to the accounts where we have paid to subcontractors of the company’s contractual counterparty to ensure completion of the facility last year. And now to be prudent then, we have written this down as it is uncertain or not whether we can reclaim that prepayment.
So that is according to the, let’s call it, prudent accounting rules in the IFRS. And more information is given in the in the accounts that we have presented. Okay. One more question also regarding the harvesting. You mentioned that you look to harvest 900,000 fish in 2025.
What is the average harvest weight of the fish in the facility as of today?
Joakim Nielsen, CEO, Proximar Seafood: The average harvest weight, which is until the August 15, is 2.54 kilograms since start of production. And as said, we are now reviewing, taking more extensive sampling of the fish, following the fact that we have been able to increase feeding over the last months. So we’ll get back on more details later on in conjunction with the prospectus.
Ulkerstad Willemsen, CFO, Proximar Seafood: Very good. Then there is one question regarding the insurance. Any updates on insurance payments for the lost production in the first half year? We have several insurance cases ongoing. So I guess this question relates to not claiming repayment for the biofilter incidents that we are also receiving, but more the use of our business interruption insurance since the question is regarding lost production.
And if that is the question, then that is something we have initiated and expect to be able to claim for that. However, that is a long process because it’s not possible to do that in stages. So we need to go through the whole 2025 and sum up what has actually been lost production and what part of that will be covered under our business interruption insurance. It’s a complicated procedure that will take time, but it’s, of course, important for the company to be able to to claim what’s under the policy. So this is something we have initiated, and and we’ll follow-up closely and report in due course when there is something to say about that.
All right. That was the number of questions that have come in. So with that, I think we can conclude this Q and A session and by saying that we will report or give you an update on our production status in early October then following the end of the third quarter. And we will report the third quarter on November 14. So with that, we conclude today and wish you all a good Friday.
Thank you for watching.
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