Q2 2026 Kaldvik AS Earnings Call
Speaker #1: Good morning, everyone. I'm Vidar Östberg, CEO of Kallvik, and I'm pleased to welcome you to the presentation of our second quarter results for 2026.
Speaker #1: Joining me today is our new CFO, Torren Ragnarsdottir, and together we'll walk you through the key highlights and developments from the past quarter. After the presentation, we'll open the floor for questions, and as before, you're welcome to submit them by email to qa@kallvik.is.
Speaker #1: So, I've included a slide here with the updated management team, with Torren Ragnarsdottir joining Kallvik in July, as CFO. And I would like to say thank you to Hjalti Wipgren, who has been interim CFO for the last months, and that has been working with us for a period.
Speaker #1: I highly appreciate his great work and look forward to continuing the collaboration even though Torren is now stepping in as CFO. And now I'll leave the word to Torren to introduce herself.
Speaker #2: Thanks. Thank you, Vidar. My name is Torren Ragnarsdottir, and as Vidar just mentioned, I started here at Kallvik in July, and I'm really excited to be part of the team.
Speaker #2: I have over 17 years of experience in administration and financial management, most recently with EFTA in Brussels, where I was for 6 years, as the head of finance, and later director of administration for the three duty stations in Brussels, Geneva, and Luxembourg.
Speaker #2: Earlier, I've held senior finance positions in both a private and public sectors, including within the Icelandair Group, where I was the director of finance for Icelandair Ground Services, and a member of Icelandair's FP&A team.
Speaker #2: I hold a business degree from Iceland, and a master's degree in finance and international business from Aarhus Denmark. I will then hand it back to you, Vidar, and return later with the financial update.
Speaker #1: Thank you, Torren. And before we continue, you all know this disclaimer, so let's move on. So we will begin with some key highlights from the last quarter and continue by covering operational updates, financial results, and strategic updates.
Speaker #1: Then we'll look ahead with a brief outlook and summary before wrapping up with the Q&A session. And questions, please send them to qa@kallvik.is. So, we'll start off with the key highlights from this quarter.
Speaker #1: And in the second quarter, we harvested 1,840 tons, with a superior share of 68%, which is up from the 40% we had in Q2 last year.
Speaker #1: Reflecting the improved performance of the 25th generation compared to previous generations. Group operational EBIT in Q2 was negative 3.3 million euros, with an operational EBIT per kilo of negative 1.77 euro.
Speaker #1: Due to the low harvest volume and thus low utilization of our infrastructure, we have had high harvest costs in the quarter. In Q1 2026, we identified a risk of breaching financial covenants, and thus obtained a waiver from our banking partners, combined with a subordinate shareholder loan of 20 million euros from our main shareholder.
Speaker #1: Looking ahead in 2026, we will be harvesting 3,000 tons in Q3 this year, and all from the 25th generation, and we will be maintaining our full-year harvest guidance of 17,000 tons.
Speaker #1: On the strategic side, the new aquaculture bill that was submitted to Parliament in March was not adopted, and I'll bring some more detail on this later in the presentation.
Speaker #1: The new license in Seyðisfjörður is still pending, and I'll provide further update on our strategic review later in the presentation. As already mentioned, the 25th generation is performing well.
Speaker #1: The output of this generation was an important milestone for Kallvik, transferring 8.25 million smolt exceeding our target of 7.5 million smolt. Overall, we see good health, and good recovery after some challenges related to the autumn fish during the coldest part of the season.
Speaker #1: And by end of Q2, cumulative mortality for the 25th generation was 15.7%, compared to 35.6% for the 25th generation, at the same time last year.
Speaker #1: Harvest for this generation was restarted in August and is now ongoing, reaching an average of above 85% superior. Our land operations have been through several upgrades over the last few years, and our focus is now on further optimizing the production.
Speaker #1: The target for 2026 is to release 7.5 million smolt, and by the end of Q2, or end of June, 35% of the outputs had been executed.
Speaker #1: We have seen slightly higher release mortality connected to transport than target in some groups. We are also seeing improved flexibility and reduced risk from combining external-sourced smolt with internal capacity, in line with our new strategy.
Speaker #1: Our smolt stations are still on track with production, and have full focus on improving initiatives focusing on operational excellence and optimizing of production parameters.
Speaker #1: And the first internally produced smolt group, Smoltified, using light regimes, have now been released to sea, showing good performance. Then some information on harvesting and sales.
Speaker #1: In Q2, we harvested 1,840 tons, and all this was from the 25th generation. Reaching a superior share of 68.2%, which is higher than the 40% we had in Q2 last year.
Speaker #1: Still, with such low harvest volume, the cost of harvest is still high due to low utilization of infrastructure. The overall price achievement ended at 592 euro per kilo for the quarter, which is slightly lower than last year, and the main reason for this is that we've harvested at a low average weight, and we had lower contract share than in 2025.
Speaker #1: So that concludes the operational update, and now I'll pass the word to Torren, who will walk you through the financial updates.
Speaker #2: Thank you, Vidar. We begin with the highlights from the second quarter, and here you can also see the year-to-date comparison numbers. Operational EBIT in Q2 was negative by 3.3 million euros, and EBIT per kilo amounted to negative 1.77.
Speaker #2: This is driven by different factors, mainly small average sizes and low harvest volume. Revenues reached approximately 11.3 million euros. The overall price achievement in Q2 ended at 5.92 euros per kilo.
Speaker #1: Still, with such a low harvest volume, the cost of harvest is high due to low utilization of infrastructure. The overall price achievement ended at $5.92 per kilo for the quarter, which is slightly lower than last year. The main reason for this is that we've harvested at a low average weight, and we had a lower contract share than in Q2 2025.
Speaker #2: Now, over to the financial summary. Total assets increased by 8 million euros during the quarter. This was primarily driven by increase in biomass, offset by decrease in receivables and cash.
Speaker #1: So that concludes the operational update, and now I'll pass the word to Torun, who will walk you through the financial updates.
Speaker #2: Total liabilities increased by 16 million in the quarter. Primarily due to increase in subordinated shareholder loan and payables. And finally, the equity ratio was 51% at quarter end, slightly down from the previous quarters.
Speaker #2: Thank you, Vedad. We begin with the highlights from the second quarter, and here you can also see the year-to-date comparison numbers. Operational EBIT in Q2 was negative €3.3 million, and EBIT per kilo amounted to negative €1.77.
Speaker #2: As previously reported, Kallvik obtained a waiver in Q1 from the financial partners for 2026, including a waiver of the EBITDA covenant, reduction in minimum liquidity requirement from 10 million euros to 5 million euros, and increased availability under the revolving facility for 2026.
Speaker #2: This is driven by different factors, mainly small average sizes and low harvest volume. Revenues reached approximately €11.3 million. The overall price achievement in Q2 ended at €5.92 per kilo.
Speaker #2: The minimum liquidity requirement includes cash and undrawn credit facilities. As part of the waiver, the company's largest shareholder provided a subordinated loan of 20 million euros, received in two 10 million tranches at the end of Q1 and in early Q2.
Speaker #2: Now over to the financial summary. Total assets increased by €8 million during the quarter. This was primarily driven by an increase in biomass, offset by a decrease in receivables and cash.
Speaker #2: Total liabilities increased by $16 million in the quarter, primarily due to an increase in subordinated shareholder loans and payables. Finally, the equity ratio was 51% at quarter end, slightly down from previous quarters.
Speaker #2: And here we have an analysis of the net interest bearing debt, which increased by 13 million euros during the quarter. EBITDA was negative by 0.1 million euros, the change in working capital amounted to 7 million euros, primarily due to higher biomass at the end of the quarter.
Speaker #2: As previously reported, Kaldvik obtained waivers in Q1 from the financial partners for 2026, including a waiver of the EBITDA covenant, a reduction in the minimum liquidity requirement from €10 million to €5 million, and increased availability under the revolving facility for 2026.
Speaker #2: Capex investment during the quarter amounted to 0.8 million euros. Financial items amounted to 5 million euros, and production tax amounted to 0.5 million euros.
Speaker #2: And as communicated before, we provide quarterly company updates, while financial reports are issued twice a year, a half-year report, and an annual report. Next company update is the Q3 report, scheduled for November 13, 2026.
Speaker #2: The minimum liquidity requirement includes cash and undrawn credit facilities. As part of the waiver, the company's largest shareholder provided a subordinated loan of €20 million, received in two €10 million tranches at the end of Q1 and in early Q2.
Speaker #2: And for further information about the financials for the first half-year, I refer to the half-year report and the annex of this presentation. And then I will give the word back to you, Vidar.
Speaker #2: And here we have an analysis of the net interest-bearing debt, which increased by €13 million during the quarter. EBITDA was negative by €0.1 million, and the change in working capital amounted to €7 million, primarily due to higher biomass at the end of the quarter.
Speaker #1: Thank you, Torren. Then a short status on strategic updates. So the strategic review of our production model has been concluded, and as mentioned in our previous update, some of the main findings are already being implemented.
Speaker #2: Capex investment during the quarter amounted to €0.8 million. Financial items amounted to €5 million, and production tax amounted to €0.5 million.
Speaker #1: The purpose of the review has been to analyze the entire Kallvik value chain, and identify how we can optimize production, utilize license capacity, and make efficient use of our assets, given the specific conditions that we operate under in Iceland.
Speaker #2: As communicated before, we provide quarterly company updates, while financial reports are issued twice a year: a half-year report and an annual report. The next company update is the Q3 report, scheduled for November 13, 2026.
Speaker #1: Key measures will be focused at risk reduction to reduce risk of losses due to disease, optimize the use of our sites, and ensure that we have good quality smolt.
Speaker #2: And for further information about the financials for the first half-year, I refer to the half-year report and the annex of this presentation. I will now give the word back to you, Vedad.
Speaker #1: Our goal is to establish a robust and stable production at 30,000 tons, plus with a mortality below 10% and superior share above 90%. And a core principle of our production strategy will be to have fewer groups with two winters at sea to reduce biological risk, but still utilize the growth season.
Speaker #1: Thank you, Torun. Now, a short status on strategic updates. The strategic review of our production model has been concluded, and as mentioned in our previous update, some of the main findings are already being implemented.
Speaker #1: The purpose of the review has been to analyze the entire Kaldvik value chain and identify how we can optimize production, utilize license capacity, and make efficient use of our assets, given the specific conditions that we operate under in Iceland.
Speaker #1: We will still have sites spanning two winters, but only at locations characterized from experience to be good two-winter production sites. Also, Kallvik has been active in the research ongoing to better understand the infection dynamics of the parasite public opsila set of bronchicola that has been causing increased mortality and reduced superior share in our production.
Speaker #1: Key measures will be focused on risk reduction to reduce the risk of losses due to disease, optimize the use of our sites, and ensure that we have good quality smolt.
Speaker #1: After analysis of our production data and comparing to Norwegian experiences, we now know that by avoiding transfers of small to sea in August and beginning of September, we can reduce the risk of this disease significantly.
Speaker #1: Our goal is to establish a robust and stable production at 30,000 tons, with mortality below 10% and superior share above 90%. The core principle of our production strategy will be to have fewer groups with two winters at sea to reduce biological risk, while still utilizing the growth season.
Speaker #1: Thus, we are now avoiding transfers in this period going forward, and more of our small transfers will be completed by end of July going forward.
Speaker #1: This will also support our one-winter main strategy. Further, we know the importance of having premium smolt and are already seeing the first results from our ongoing initiative to improve smolt quality.
Speaker #1: We will still have sites spanning two winters, but only allocations characterized from experience to be good two-winter production sites. Also, Kaldvik has been active in the research ongoing to better understand the infection dynamics of the parasite, Publocapsula seto-brachicola, that has been causing increased mortality and reduced superior share in our production.
Speaker #1: And also, our hybrid smolt sourcing strategies providing reduced risk and flexibility. So concluding our strategic review, I've included a timeline indicating our ambition now that we believe that we are transitioning into a more robust and stable production model, and we're expecting to gradually see the effect of the measures being implemented.
Speaker #1: After analysis of our production data and comparison to Norwegian experiences, we now know that by avoiding transfers of smolt to sea in August and September, we can significantly reduce the risk of this disease.
Speaker #1: Thus, we are now avoiding transfers in this period going forward, and more of our smolt transfers will be completed by the end of July going forward.
Speaker #1: To reduce risk and also as a result of some regulatory constraints, we have made one adjustment to our previously communicated output plan so that 65% of the 2026 generation will be transferred to sea by end of July, and not 80%.
Speaker #1: This will also support our one-winter main strategy. Further, we know the importance of having premium smolt and are already seeing the first results from our ongoing initiative to improve smolt quality.
Speaker #1: However, we have good capacity to maintain that fish in land, and it will keep growing until transfer in the period mid-September and October. So we are still in accordance with the main measure in our plans, including the adjusted output strategy, and avoiding the transfers in the high-risk period for public opsila.
Speaker #1: And also, our hybrid smolt sourcing strategies provide reduced risk and flexibility. So, concluding our strategic review, I have included a timeline indicating our ambition now that we believe we are transitioning into a more robust and stable production model, and we expect to gradually see the effect of the measures being implemented.
Speaker #1: And as you're aware, Kallvik has 43,800 tons of license volume, with another 10,000 tons pending in Seyðisfjörður. So we have taken this strategic step to ensure a more robust production model, and to adapt to our environment, and to ensure a sustainable growth.
Speaker #1: To reduce risk, and also as a result of some regulatory constraints, we have made one adjustment to our previously communicated output plan, so that 65% of the 2026 generation will be transferred to sea by the end of July, and not 80%.
Speaker #1: So we consider 2027 to be a transitioning year where we will harvest above 20,000 tons, in 2028 we are targeting to reach our milestone one with 30,000 tons harvest, and stabilize the production.
Speaker #1: However, we have good capacity to maintain that in land, and it will keep growing until transfer in the period mid-September and October. So we are still in accordance with the main measure in our plans, including the adjusted output strategy and avoiding the transfers in the high-risk period for public opsila.
Speaker #1: Our long-term goal will be to reach less than 10% mortality, and above 90% superior, and eventually using more of our license volume, approaching 45,000 tons production.
Speaker #1: And as you're aware, Kaldvik has 43,800 tons of licensed volume, with another 10,000 tons pending in Seyðisfjörður. So we have taken a strategic step to ensure a more robust production model, to adapt to our environment, and to ensure sustainable growth.
Speaker #1: Hereafter, referred to as milestone two. So that concludes the strategic review, and on other strategic items, we have included a short update on the new aquaculture bill.
Speaker #1: And as you're aware, the new aquaculture bill was submitted to Parliament in March 2026, but it was not adopted before the end of the latest parliamentary session before summer.
Speaker #1: So, we consider 2027 to be a transitioning year, where we will harvest above 20,000 tons. In 2028, we are targeting to reach our Milestone 1 with a 30,000-ton harvest and stabilize the production.
Speaker #1: Thus, there have been no change to the current regulatory and taxation framework. And the licenses in Seyðisfjörður is still pending. Then a bit what to expect going forward.
Speaker #1: Our long-term goal will be to reach less than 10% mortality and above 90% superior, and eventually use more of our license volume, approaching 45,000 tons of production.
Speaker #1: As you are aware, the market situation for salmon is still volatile and hard to predict, and in view of the total market situation, we have chosen to enter fixed-price contracts for Q3 and Q4 of above 35% of our production at prices that we believe are favorable, aiming to provide revenue predictability and downside protection.
Speaker #1: Hereafter, referred to as Milestone 2. So that concludes the strategic review. On other strategic items, we have included a short update on the new aquaculture bill.
Speaker #1: And as you're aware, the new aquaculture bill was submitted to Parliament in March 2026, but it was not adopted before the end of the latest parliamentary session before summer.
Speaker #1: However, we do share a positive market view where we believe that demand is increasing, and believe that we will see higher prices in the two next quarters than in the same period in 2021.
Speaker #1: Thus, there have been no changes to the current regulatory and taxation framework. And the license list in Seyðisfjörður is still pending. Then, the bit on what to expect going forward.
Speaker #1: So for Q3 2026, we expect to harvest approximately 3,500 tons, and for Q4, we expect 5,200 tons. Thus, we maintain the full-year guidance for 2026 of approximately 17,000 tons.
Speaker #1: As you are aware, the market situation was, sadly, still volatile and hard to predict. In view of the total market situation, we have chosen to enter fixed price contracts for Q3 and Q4 for above 35% of our production at prices that we believe are favorable, aiming to provide revenue predictability and downside protection.
Speaker #1: The current production year to date is in accordance to plan, and all harvest for the rest of this year will be from the 2025 generation.
Speaker #1: And again, the 2025 generation is with good health, and the first harvest in Q3 has been executed with high superior share. So to summarize, our production is currently in accordance to plan, and the 2025 generation is performing well, with good health, and with high superior share in the first harvest in Q3.
Speaker #1: However, we do share a positive market view, where we believe that demand is increasing and believe that we will see higher prices in the next two quarters than in the same period in 2021.
Speaker #1: So, for Q3 2026, we expect to harvest approximately 3,500 tons, and for Q4, we expect 5,200 tons. Thus, we maintain the full-year guidance for 2026 of approximately 17,000 tons.
Speaker #1: In Q2, we harvested 1,840 tons, and the first half-year ended at 8,281 tons of harvest. Earlier this year, we saw a risk of breaching our financial covenants and obtained a waiver from our financial partners and the subordinate loan from our main shareholder.
Speaker #1: The current production year-to-date is in accordance with plan, and the harvest for the rest of this year will be from the 2025 generation.
Speaker #1: And again, the 2025 generation is in good health, and the first harvest in Q3 has been executed with a high superior share. So, to summarize, our production is currently in accordance with plan, and the 2025 generation is performing well—with good health and a high superior share in the first harvest in Q3.
Speaker #1: We have now completed the strategic review with the strategic goal to stabilize our production at plus 30,000 tons, with a mortality below 10% superior share, and above 90% sorry, mortality below 10% and superior above 90%.
Speaker #1: Implementation of the new strategy is ongoing, the licenses in Seyðisfjörður is still pending, and the new aquaculture bill was not adopted before the summer.
Speaker #1: In Q2, we harvested 1,840 tons, and the first half-year ended at 8,281 tons of harvest. Earlier this year, we saw a risk of breaching our financial covenants and obtained a waiver from our financial partners, as well as the subordinate loan from our main shareholder.
Speaker #1: We still see a volatile market, but with some more optimism than before. But we do have a contract share of 37% for the next two quarters.
Speaker #1: We are maintaining the full harvest guiding for 2026 at 17,000 tons, and plan to harvest 3,500 tons in Q3. So we will conclude our presentation here, and we will now open for questions.
Speaker #1: We have now completed the strategic review, with the strategic goal to stabilize our production at over 30,000 tons, with mortality below 10% and superior share above 90%. Sorry, mortality below 10% and superior above 90%.
Speaker #1: And as mentioned previously, please send the questions to QA@kallvik.is.
Speaker #1: Implementation of the new strategy is ongoing. The license in Seyðisfjörður is still pending, and the new aquaculture bill was not adopted before the summer.
Speaker #1: We still see a volatile market, but with somewhat more optimism than before. We do have a contract share of 37% for the next two quarters.
Speaker #1: We are maintaining the full harvest guiding for 2026 at 17,000 tons and plan to harvest 3,500 tons in Q3. So, we will conclude our presentation here, and we will now open for questions.
Speaker #1: And as mentioned previously, please send the questions to qa@kaldvik.is.
Speaker #2: So we have received three questions so far, so the first one is, when are you planning on harvesting 45,000 tons?
Speaker #1: Yes. We will not be guiding the timing for the 45,000 tons, but it is our long-term target to reach 45,000 tons. As you're aware, we have 43,300, and the 43,800 tons license volume, and awaiting another 10,000, and we will be aiming to utilize our license volume in the long run.
Speaker #2: And part of your license portfolio is for sterile fish. When are you planning on utilizing that volume?
Speaker #2: So, we have received three questions so far. The first one is: When are you planning on harvesting 45,000 tons?
Speaker #1: We already have a small production of sterile fish in our land sites, this is a test production to see how the sterile fish is performing in our environment, and to get some experience with the sterile fish.
Speaker #1: Yes. We will not be guiding the timing for the 45,000 tons, but it is our long-term target to reach 45,000 tons. As you're aware, we have 43,300 in the 43,800 tons license volume and are awaiting another 10,000. We will be aiming to utilize our licensed volume in the long run.
Speaker #1: We are planning to release that in Stöðvarfjörður in spring 2027, and yeah, we'll be interested to see.
Speaker #2: And part of your license portfolio is for sterile fish. When are you planning on utilizing that volume?
Speaker #2: You start harvesting at high superior rates. Are you expecting it to decline over the harvesting of the generation, or are you expecting a difference in trend?
Speaker #1: We already have a small production of sterile fish at our land sites. This is a test production to see how the sterile fish are performing in our environment and to gain some experience with the sterile fish.
Speaker #1: Yeah, we have seen a decline over the years, in the season, but we do believe now with the 2025 generation, it's looking with good health and temperatures are good, so we are optimistic that we will see good superior share going forward.
Speaker #1: We are planning to release that in Stöðvarfjörður in spring 2027. And yeah, we'll be interested to see.
Speaker #2: You started harvesting at high, superior rates. Are you expecting those rates to decline over the course of the generation's harvest, or are you expecting a different trend?
Speaker #1: No further questions?
Speaker #1: Yeah, we have seen a decline over the years in the season, but we do believe now, with the 2025 generation, it's looking in good health and temperatures are good, so we are optimistic that we will see good superior share going forward.
Speaker #2: No?
Speaker #1: No further questions?
Speaker #2: No?
