Andfjord Salmon continues to build at Kvalnes, but increased construction costs have meant that the company has this week had to raise NOK 400 million (£29m) in fresh equity.Photo taken from PowerPoint presentation/Endre Johansen
Andfjord Salmon raises an extra £29m to meet rising construction costs
Building work is on schedule for the Norwegian company, which means it is sticking to plans to stock smolts in September. But the price of the project has gone up, and the company has made a private placement to secure more capital.
Although all ongoing work streams at Andfjord Salmon's site at Kvalnes on the island of Andøya, Norway, are on schedule, updated calculations show that the final construction costs will exceed the original estimates, the company reports in connection with its Q1 reporting.
Ad
"In dialogue with main contractor Hæhre, the total investment budget (capex) for current and future construction phases has been adjusted upwards by NOK 500 million, of which NOK 400 million is related to ongoing construction work.
The cost increases are mainly due to concrete production, additional mobilisation of personnel and equipment, design adjustments, and challenging weather conditions.
The additional capex is distributed as follows: ~40% for Phase 1, ~45% for Phases 2A and 2B, and ~15% for future Phases 4 and 5.
The company says it has chosen to advance certain investments to maintain progress in development and achieve future efficiency gains.
When the plant at Kvalnes is fully developed, it is expected to produce 48,100 tonnes.
The harbour and quay areas are built with rock blasted from the salmon pools.Photo: Andfjord Salmon
The total average capex is now estimated at NOK 115 per kilogram.
Issue completed
To finance part of the updated capex budget for the Kvalnes facility, Andfjord Salmon has today secured an equity injection of NOK 400 million through an issue of 10,869,565 new shares to selected existing shareholders, including Portugal-headquartered food producer and retailer Jerónimo Martins Agro-Alimentar SA, the company's largest shareholder. The subscription price per share has been set at NOK 36.80.
The issue was carried out as a private placement decided by the board of directors pursuant to authorisation granted at the company's annual general meeting on April 29, 2025.
"The board has considered the structure for raising capital in light of relevant obligations and guidelines for equal treatment, and considers it to be in the common interest of the company and its shareholders to secure capital in an efficient manner, at the prevailing market price and without discount, and without disruption to the project or production," it says.
Will test this summer
Although the development itself is going according to plan, and is headed towards a September launch, the company has the small caveat in its Q1 report that the pool and technical infrastructure must pass testing in July and August before stocking goes ahead.
The smolts will first be released into pools K0 and K1, with subsequent splitting/transfer to pools K3, K2 and K4 as the biomass density increases.
"The upcoming smolt release marks an important milestone for Andfjord Salmon. After more than two years of construction work, we look forward to having fish in the pools again," says ANdfjord Salmon chief executive Martin Rasmussen.
After the first release, Andfjord Salmon plans to release new batches continuously to ensure steady production of salmon.
20% increase in production capacity
In the first quarter of 2025, Andfjord Salmon announced an optimised development plan that increases production capacity at Kvalnes by approximately 20%. Better utilisation of the pools, improved fish logistics systems and reinforced concrete infrastructure have increased expected capacity from 8,000 to 11,000 tonnes (gutted weight + post-smolts) for phase 1. Within the company's existing permit, the total expected production volume at Kvalnes will increase from 19,000 to 23,700 tonnes.
