Record biology in the Faroes drives lower costs – a strong foundation for sustainable growth

04.11.2025

Presentation:

Financial Report:

The Bakkafrost Group delivered a total operational EBIT of DKK 22 million (DKK 173 million) in Q3 2025.

(Figures in parenthesis refer to the same period last year unless otherwise specified)

The performance in Q3 2025 per region was as follows:

·        Faroe Islands          Revenues of DKK 1,405 million (1,420 million)

                                Operational EBIT of DKK 227 million (310 million)

·        Scotland                     Revenues of DKK 282 million (317 million)

                                Operational EBIT of DKK -205 million (-138 million)

Commenting on the result, CEO Regin Jacobsen said:

“We are not satisfied with the financial results in this quarter, which were impacted by weak market prices and continued high global supply.

However, we are very pleased with the exceptionally strong biological performance in the Faroe Islands. Our farming operations delivered record survival, strong growth, and the best biological results ever achieved in Bakkafrost’s history. Importantly, farming costs in the Faroe Islands continue to decline – down 12% year-on-year in Q2 and down a further 14% in Q3 – reflecting the impact of excellent biology, efficient farming, and disciplined operations.

In Scotland, performance was stable at most farming sites in the early part of the quarter but deteriorated following a disease outbreak at Portree, which had a notable impact on results. At the same time, the Applecross hatchery has made solid progress under its new management team, with operations stabilising and supporting the continued ramp-up of large, high-quality smolt production.

Looking ahead, we expect the market situation to gradually improve as global supply growth slows and demand for high-quality salmon remains firm. This should support higher price levels through the winter and into 2026.

Despite financial headwinds this quarter, the strong biological foundation across the Group positions Bakkafrost well for the future. Our priorities remain unchanged – to strengthen biological control, maintain cost discipline, and deliver sustainable long-term value through operational excellence.”

During Q3 2025, the FOF segment sourced 39,940 tonnes (40,134 tonnes) of raw material. The Operational EBIT margin was 12% (20%), and fish feed sales amounted to 49,087 tonnes (41,513 tonnes).

For the first nine months of 2025, the FOF segment's operational EBIT margin was 13% (20%). During the first nine months of 2025, Havsbrún sourced 309,393 tonnes (267,583 tonnes) of raw material.

In Q3 2025, the Freshwater segments in the Faroe Islands and Scotland transferred a total of 8.4 million (6.8 million) smolts combined:

·        Freshwater FO:                       4.8 million     (4.9 million),

·        Freshwater SCT:                     3.6 million     (1.9 million).

For the first nine months of 2025, the freshwater segments have released a total of 18.5 million (16.0 million) smolts:

·        Freshwater FO:                     13.4 million   (11.0 million),

·        Freshwater SCT:                     5.1 million     (5.0 million).

In Q3 2025, the Freshwater FO segment made an operational EBIT per kg transferred smolt of DKK 40.71 (DKK 40.67), corresponding to NOK 64.34 (NOK 64.11). The Freshwater SCT segment made an operational EBIT per kg transferred smolt of DKK -66.88 (DKK -34.82), corresponding to NOK -105.70 (NOK -54.89). In Q3 2025, the Freshwater SCT segment had incident-based costs of DKK 25 million (DKK 0 million).

The Farming segments achieved lower prices in Q3 2025 than in Q3 2024. The Farming segments had higher volumes in Q3 2025 compared to Q3 2024. In Q3 2025, the Farming SCT segment had incident-based costs of DKK 68 million (DKK 34 million).

The total combined harvest in Q3 2025 of the farming segments in the Faroe Islands and Scotland was 30,678 tonnes gutted weight (27,029 tgw):

·        Farming FO:                      25,392 tgw (21,618 tgw),

Farming SCT:                       5,286 tgw (5,411 tgw).

For the first nine months of 2025, the farming segments harvested a total of 78,932 tonnes gutted weight (70,178):

·        Farming FO:                    60,326 tgw (46,138 tgw),

·        Farming SCT:                  18,606 tgw (24,040 tgw).

In Q3 2025, the Farming FO segment made an operational EBIT per kg of DKK -1.13 (DKK -1.31), corresponding to NOK -1.78 (NOK -2.07). The Farming SCT segment made an operational EBIT per kg of DKK -36.09 (DKK -33.14), corresponding to NOK -57.04 (NOK -52.25).

The Services segment made an operational EBIT per kg of DKK 1.25 (DKK 0.70), corresponding to NOK 1.97 (NOK 1.11). The operational EBIT margin for the segment was 15% (8%).

The Sales & Other segment had a revenue of DKK 2,462 million (2,488 million) and an operational EBIT margin of 3% (6%). The operational EBIT per kg was DKK 2.37 (DKK 5.48), corresponding to NOK 3.75 (NOK 8.64).

The performance related to the Faroe Islands and Scotland as a region can be found in the Appendix.

The long-term goal of the Board of Directors is that 30-50% of earnings per share shall be paid out as a dividend. Bakkafrost’s financial position is strong, with a solid balance sheet, a competitive operation, and available credit facilities.

OUTLOOK AND OPERATIONAL PERFORMANCE

Market

Substantially increased supply in Q3 2025

The supply of salmon increased 11.9% in Q3 2025 compared to Q3 2024, incl. inventory movements. Without inventory movements, the supply increase was 12.2%, according to the latest estimate from Kontali Analyse.

Lower salmon prices in Q3 2025

Salmon reference prices (in NOK) for 4-5kg superior salmon were 13.1% lower this quarter compared to Q3 2024. The price reduction was driven by substantial increase in supply from several regions, most dominantly from Norway but also from Chile.

No growth in Q4 2025

In Q4 2025, the global supply is expected to be on the same level as in Q4 2024, excluding inventory movements. In H2 2025, the global supply is expected grow around 6%, compared to Q3 2024. For the full year 2025, the global supply is expected grow around 9%, excluding inventory movements, and in H1 2026 the global supply is expected to on the same level as H1 2025.

Bakkafrost has a strong focus on ensuring a well-balanced flow to the different markets to increase diversification and mitigate market risk. Bakkafrost operates in the main salmon markets, Europe, the USA, and the Far East. Since the beginning of the war in Ukraine, Bakkafrost has stopped all trading with Russia.

Operations

Farming Faroe Islands

The Faroese farming operation continues on a very strong trajectory, underpinned by exceptional biological performance. In Q3 2025, biology reached one of the best positions ever recorded, supported by the consistent delivery of large, high-quality smolt. The strong smolt quality is one of the drivers for the achieved growth rates, record-high feeding volumes, and exceptionally low mortality across sites. Sea lice levels remain well controlled through the continued success of the dual-freshwater treatment strategy. The overall biological performance has also translated into further improvements in the quality of the harvested fish, which continues to set new benchmarks. All these biological achievements — very strong growth, robust fish health, and high smolt quality — combined with increased harvest volumes, shorter cycle times of farming sites and lower smolt and feed costs, have driven further reductions in farming costs.

Freshwater Faroe Islands

The Faroese freshwater operation continues its strong development, driven by consistent improvements in smolt quality, robustness, and production efficiency. Output of large, high-quality smolt remains on an upward trend, supporting sustainable volume growth and long-term biological strength across the value chain. The enhanced robustness of smolt is reflected in exceptionally low accumulated mortality during the first 90 days post transfer — among the lowest levels ever recorded. This confirms the effectiveness of Bakkafrost’s large-smolt strategy and the continued strengthening of biological performance. Capacity utilisation continues to increase, supporting higher production volumes and further cost efficiencies. The average weight of transferred smolt in Q3 2025 was 427g, which is 1% higher than in Q3 2024.

Current hatchery capacity enables annual production of 9,000 tonnes, equivalent to about 18 million smolt of 500g. The new hatchery in Skálavík remains on schedule for completion in late 2026, which will raise total capacity to approximately 24.4 million smolt. Operations are expected to commence in Q2 2026.

Farming Scotland

The overall biological performance in the Scotland was good during Q3 2025, with low mortality and good growth at most marine sites through July and August. However, in September, conditions changed significantly following a disease outbreak at the Portree farming site caused by Pasteurella bacteria. This resulted in a sharp increase in exceptional mortality at the site, and some harvests were advanced to mitigate further biological risks. Despite this incident, the overall performance across the Scottish operation remained stable. Bakkafrost maintains its 2025 harvest guidance of 22,000  tonnes, supported by strong results from other farming areas. However, the increased mortality at Portree is expected to have a negative impact on Scottish harvest volumes in 2026. During 2025 and into 2026, the biomass at sea will gradually change character, transitioning to be based on large and high-quality smolt. This strategic shift is expected to enhance overall fish health and growth rates, leading to a more robust and sustainable aquaculture environment.

Freshwater Scotland

The Scottish freshwater operation continues its ramp-up, with Applecross firmly established as the core of Bakkafrost’s large-smolt strategy in Scotland, having the capacity to produce 3,500 tonnes of high-quality large smolt. The smolt affected by the furunculosis incident in Q2 are now out of Applecross, and production has since normalised with stable and improving biological performance. Under the leadership of the Faroese Group Freshwater management team, the production plan for Applecross has been revised to enhance utilisation and biological efficiency. In contrast to the previously announced 200g smolt, Applecross will also produce larger smolt. Hence, the individual batches will be ranging from 200g to 400g. This adjustment allows for greater flexibility in production planning, better utilisation of capacity, and improved biological outcomes. Applecross has also transitioned to operate as a stand-alone facility, no longer receiving inputs from external hatcheries. This marks a significant step in improving biosecurity and ensuring consistent smolt quality.

Services

The smolt transfer system from Applecross has undergone a major upgrade, with the FSV Bakkanes rebuilt to handle smolt transfers, now operating similarly to its highly successful rebuild of the sister vessel Martin in the Faroe Islands. The upgraded system represents a major step forward in ensuring safe and efficient smolt transfers, reducing stress and mortality, and strengthening operational reliability across the Scottish farming sites. Together, these initiatives represent a significant advancement in the Scottish freshwater platform, ensuring it supports a robust, efficient, and sustainable farming operation going forward.

In Q3 2025, the average weight of transferred smolt from Applecross in Scotland was 229, which is 161% higher than in Q3 2024. The average smolt weight for all Bakkafrost’s smolt release in Scotland in the quarter was 155g, which is 80% higher than in Q3 2024.

Smolt transfer

Bakkafrost’s expected smolt transfer in 2026 in the Faroe Islands is around 20.0 million smolts with an average weight of around 440g. In Scotland, the smolt transfer in 2026 is expected to be around 10.0 million smolt with an average weight of 179g. This includes internally produced smolt as well as externally sourced. The number and average weight of smolts transferred are key elements of predicting Bakkafrost’s future production.

Bakkafrost expects to harvest a total of around 104,000 tonnes gutted weight in 2025. 82,000 tonnes are expected to be harvested in the Faroe Island and 22,000 tonnes in Scotland.

In 2026, Bakkafrost expects to harvest around 92,000 tonnes gutted weight in the Faroe Islands and around 20,000 tonnes in Scotland, giving at total of around 112,000 tonnes gutted weight. The quarterly harvest profile is outlined in in the table below. Biological, environmental and market conditions can affect the expected harvest profile.

 Expected harvest profile in 2026 as a % of total harvest pr. region:

The estimates for harvest volumes and smolt transfers in both geographies are dependent on biological development.

Sales & VAP (Value added products)

Bakkafrost's highly flexible value chain includes state-of-the-art VAP processing capacity, which enables the company to adapt effectively to rapidly changing market situations.

As a result of changes in the Faroese revenue tax, Bakkafrost has adjusted the strategy for contracted VAP (Value-Added Products) to reduce contract exposure.

For 2026, Bakkafrost intends to sign contracts covering around 15-20% of the expected harvest volumes in the Faroe Islands and Scotland combined.

FOF (Fishmeal, oil and feed)

The outlook of fishmeal and fish oil production is dependent on the availability of raw materials.

The ICES 2026 recommendation for blue whiting is 851 thousand tonnes, which represents a 41.2% decrease from the recommendation for 2025.

In 2026 Bakkafrost expects lower production volumes of fishmeal and fish oil as in 2025.

Bakkafrost expects the feed production at Havsbrún to be around 155,000 tonnes in 2026. Close to all of this will be sold internally to Bakkafrost’s Faroese and Scottish Farming segments.

Investments

On the Capital Markets Day on 17-18 June 2025, Bakkafrost announced a 5.0bn DKK investment plan for 2026-2030. The main purpose is to improve efficiency, reduce biological risk and enable continued sustainable growth in the Faroe Islands and Scotland.

The investments in the Faroe Islands will increase the annual smolt production capacity to 24.4 million smolt of 500g. The feed production capacity and flexibility are also increased to further improve R&D capabilities and meet the growing demand for feed as harvest volumes increase in the Faroe Islands and Scotland. Also, investments in new farming sites and new farming technology are included, as well as investments to improve harvest capacity and flexibility with Live Fish Holding Tanks.

In Scotland, planned investments include site expansions and optimisation as well as building a new harvest and processing facility to accommodate the growing harvest volume.

As a shared service to the Group, the investment plan includes building 2 new dual-freshwater treatment vessels in the FSV segment.

2026-2030 Investment programme per category (DKK 1,000)

Incorporated into the investment plan is also 245mDKK earmarked to energy transition, spread across the value chain.

With the investment plan, Bakkafrost expects to sustainably grow the total annual harvest volumes to 162,000 tonnes in 2030.

Since the announcement of the 2026-2030 investment plan on the CMD in 2025, Bakkafrost has decided to let some of the investments planned for 2025 rollover into 2026 due to the weak market outlook for 2025. Consequently, the timing of other investments in the announced 2026-2030 plan have been adjusted.

Updated 2026-2030 5.0bn DKK Investment programme vs. historical investments (DKK 1,000)

Financial

The global salmon product market's long-term balance is likely to favour Bakkafrost. Bakkafrost has a long value chain and a cost-efficient production of high-quality salmon products and will likely maintain financial flexibility going forward.

In March 2022, Bakkafrost secured a 700 mEUR sustainability-linked credit facility (expandable by 150 mEUR) with a 5-year term and 2-year extension options which have been executed. This facility, along with Bakkafrost's strong equity ratio, bolsters the Group's financial strength for organic growth and cost reduction in Scotland, while also facilitating M&A and future organic growth opportunities, and upholding an unchanged dividend policy.

Please find the Company’s Q3 2025 report and the Q3 2025 presentation enclosed.

Contacts:

·        Regin Jacobsen, CEO of P/F Bakkafrost: +298 235001 (mobile)

·        Høgni Dahl Jakobsen, CFO of P/F Bakkafrost: +298 235060 (mobile)

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

About Bakkafrost:

Bakkafrost is the largest salmon farmer in the Faroe Islands and the second-largest salmon farmer in Scotland. The Group is fully integrated from feed production to smolt, farming, VAP and sales. The Group has production of fishmeal, fish oil and salmon feed in the Faroe Islands and primary and secondary processing in the Faroe Islands, Scotland and Denmark. The Group operates sea farming and broodstock operations in both the Faroe Islands and Scotland. The Group has built a biogas plant in the Faroe Islands. The headquarter is located in the Faroe Islands, and the Group has sales and administration offices in Edinburgh (Scotland), Boulogne-Sur-Mer (France), New Jersey (US) and Munkebo (DK). The Bakkafrost Group has 1,686 employees (full-time equivalents).

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