The krill harvesting season inAntarctica starts each year in December and lasts for around ten months.Aker BioMarine's vessels will soon return to shore for scheduled upgrades and maintenance ahead of the new 2022 season. Harvesting has been slow in 2021 due to low krill availability in sub-area 48.3, and challenging ice conditions in August and September in sub-area 48.2. Year-to-date offshore production volume is 38500 MT before fourth quarter harvesting, which is less than two-thirds of the company's original ambition for the full year. The number of fishing days this season is 18% below the lowest of the comparable figures from the last eight years, and 23% lower than average (Antarctic Sea andSaga Sea only) as a large number of days is spent searching for krill. The company also notes that the total biomass inAntarctica is sound with a recent study showing a 17% increase over the last 20 years. "The 2021 harvesting season has been disappointing, and the significantly lower volumes impact our sales and earnings. As our vessels now sail to undergo maintenance and upgrades, I'm looking forward to next season starting in the fourth quarter", CEOMatts Johansen commented. The low offshore production volumes this season impacts the company's financials for 2021 in three ways: o Harvesting in the third quarter has been lower than anticipated and is expected to negatively impact the company's earnings this year. The low volumes result in a higher cost per ton of produced krill, which has a significant impact on margins. o The lower harvesting volumes, combined with a high fixed cost base, will result in an impairment of Qrill Aqua inventory to the Net Realizable Value (NRV) as inventories are measured at the lower of cost and NRV (estimated selling price). The final impairment is dependent upon the full-year harvesting volumes. o Lower harvesting volumes will result in reduced product availability for Qrill Aqua towards the end of the year, and hence, impact sales in 2021. As reported in July, the sales volume for Superba this year is lower than last year. The main reason for this is a large drop in sales toSouth Korea and slower-than-projected sales in the US non-mass market. Even if Superba sales in the second half of 2021 is estimated to be higher than in the first half, the sales growth in the above-mentioned markets are lower than previously estimated.Aker BioMarine has over the last months implemented sales improvement initiatives. Still, annual sales are expected to be lower than the previous estimate. With the update above, the company revises its outlook for 2021. Both the lower harvesting and Superba sales are likely to further impact 2021 financial performance negatively with approximately two-thirds related to lower harvesting and one-third related to Superba sales.Aker BioMarine expects offshore krill production volumes in 2021 to be around 40,000-45,000 MT, depending on fourth quarter catch. Revenue is expected to come in somewhat below last year's level and with an adjusted EBITDA margin of 15%-17%. The company will host a Capital Market Update for investors and analysts in late November or early December. This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act. Thisstock exchange announcement was published byLars Jacobsen , General Legal Counsel atAker BioMarine ASA , onSeptember 9, 2021 at10:20 CET . AboutAker BioMarine Aker BioMarine is a biotech innovator and Antarctic krill-harvesting company, dedicated to improving human and planetary health. Listed onOslo Stock Exchange , the company develops krill-based ingredients for pharmaceutical, nutraceutical (Superba®), aquaculture (QRILL®Aqua), and animal feed applications (QRILL®Pet), including INVITM, a highly concentrated protein isolate, and LYSOVETATM, a targeted transporter of EPA and DHA from krill.Aker BioMarine's fully transparent value chain stretches from sustainable krill harvesting in pristine Antarctic waters through itsMontevideo logistics hub,Houston production plant, and to customers around the world. The company's strong focus on sustainability inspired the launch of AION byAker BioMarine , a circularity company dedicated to helping companies to recycle and reuse waste. For further information, go to www.akerbiomarine.com.
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