Satisfying performance and result in Q3 2013

The Bakkafrost Group delivered a total operating EBIT
of DKK 186.8 million in Q3 2013. The combined farming
and VAP segment made an operational EBIT of DKK 167.9
million in Q3 2013. The salmon spot prices were high
during the first two months of the quarter followed by
a decrease in September. Because of the continued
strong spot prices overall in the quarter, the VAP
segment had an operating loss of DKK -19.6 million.
The EBITDA for the feed segment was DKK 48.8 million
in Q3 2013.

Commenting on the results, CEO Regin Jacobsen said:

" We are satisfied with the performance and result for
Q3 2013. The strong salmon prices especially in July
and August and a good biology are the main reasons for
the strong result. The Farming operation delivers a
continuing strong performance, while the VAP
production still have negative operating results,
because of the high spot prices. However we are very
satisfied with the production efficiency in VAP
segment. The Fish meal, oil and feed segment had also
a strong performance as the raw material intake is
substantial higher then same period in 2012".

The Group made a profit for the quarter of DKK 199.6
million (DKK 25.8 million). For the first nine months
of 2013, the profit was DKK 451.4 million (DKK 133.2
million).

The total volumes harvested in Q3 2013 were 11,335
tonnes gutted weight (9,730 tgw). The total harvested
volumes the first nine months of 2013 were 30,171
tonnes gutted weight (31,297 tgw).

Bakkafrost transferred 2.8 million smolts in Q3 2013
(3.6 million), which is in line with the company's
plans. Year to date 6.7 million have been transferred
(8.4 million). The smolt release is less in 2013,
compared to 2012, due to available sites for smolt
release.

The 28th of October 2013, Bakkafrost announced the
suspicion of Neoparamoeba perurans at a Bakkafrost
farming site in Fuglafjørður. Further PCR analysis
carried out by the Faroese Food- and Veterinary
Authorities have detected the presence of Neoparamoeba
perurans. The Neoparamoeba perurans agent is known to
be able to cause amoeba gill disease (AGD). A number
of other sites in the Faroes have been examined and
Neoparamoeba perurans has been detected on 3 other
sites, of which Bakkafrost owns one.

The detected sites will be treated with Hydrogen
Peroxide. Bakkafrost and the other farming companies
in the Faroes have equipment and employees with skills
and experience in using Hydrogen Peroxide. Hydrogen
Peroxide is often used as treatment against sea lice.

There has been no increase in mortality and not
observed any disease outbreak on any of the detected
sites.

Bakkafrost and the other farmers in the Faroe Islands
will work with the Faroese Food- and veterinary
authority to avoid the introduction of the AGD.

The combined farming and VAP segment made an
operational EBIT of DKK 168.0 million (DKK 78.5
million) in Q3 2013. For the first nine months of 2013
the combined farming and VAP segment made an
operational EBIT of DKK 427.0 million (DKK 215.2
million).

The farming segment made an operational EBIT of DKK
187.5 million (DKK 75.0 million). The reason for the
improved result is a combination of improved spot
prices and higher harvested volumes. For the first
nine months of 2013, the operational EBIT was DKK
511.6 million (DKK 189.7 million).

As expected, the VAP segment had a loss on its
operations in Q3 due to high salmon spot prices. The
VAP segment made an operational EBIT of DKK -19.6
million (DKK 3.4 million) for Q3 2013. For the first
nine months of 2013, the accumulated losses amount to
DKK -84.6 million (DKK 25.5 million). There is
normally a time lag between the changes in the spot
prices and the changes in the contract prices.
Therefore, typically the VAP segment has losses the
first quarters in a longer period with increasing
salmon prices.

The third segment - fishmeal, oil and feed - made an
operational EBITDA of DKK 48.8 million (DKK 41.3
million) in Q3 2013 and for the first nine months of
2013 the operational EBITDA amounted to DKK 104.4
million (DKK 66.1 million). The increase in the EBITDA
is primarily due to higher production of fishmeal and
fish oil.

In Q3 2013, Havsbrún sourced 68 thousand tonnes of raw
material (8 thousand tonnes), and for the first nine
months of 2013 the raw material intake was 142
thousand tonnes (38 thousand tonnes).

The Bakkafrost Group had a net interest bearing debt
at the end of Q3 2013 amounting to DKK 736.9 million
(DKK 806.9 million at year-end 2012) and had undrawn
credit facilities of approx DKK 600.7 million, of
which DKK 15.0 million are restricted.

Bakkafrost's equity ratio is 52%, compared to 49% at
the end of 2012. Bakkafrost paid out DKK 97.7 million
in dividend in Q2 2013.

On 14 February 2013, Bakkafrost issued unsecur-ed
bonds at a total nominal value of NOK 500,000,000; the
issue date was 14 February 2013. The bonds were listed
on the market on 3 May 2013. The interest rate is
NIBOR 3 months plus a margin of 4.15 %. The bonds are
measured at fair value at initial recognition. The
bonds mature five years from the issue date at their
nominal value.

In Q2, all full-time employees from 2012, still
employed at Bakkafrost, have received bonus shares
with a total value of 2% of paid out salary in 2012.
In total Bakkafrost has allocated 45,957 shares to its
employees at a fair value on DKK 3,206 million. The
grant date was on 22 May 2013 and the share price was
DKK 69.65 (NOK 69.75) per share.

Farming:
The operating revenue for Bakkafrost's farming segment
was DKK 520.3 million in Q3 2013 (DKK 327.4 million)
and DKK 1,465.6 million for the first nine months of
2013 (DKK 936.7 million).

Operational EBIT, which is EBIT before fair value
adjustments on biological assets, amounted to DKK
187.5 million in Q3 2013 (DKK 75.0 million), and for
the first nine months of 2013 it was DKK 511.6 million
(DKK 189.7 million).

Operational EBIT/kg for the farming segment was DKK
16.54 (NOK 17.59) in Q3 2013, compared to DKK 7.71
(NOK 7.65) in Q3 2012. The salmon prices in Q3 2013
have been stronger than in Q3 2012 and thus higher
margins per kilo. Operational EBIT/kg for the first
nine months of 2013 was DKK 16.96 (NOK 17.02),
compared to DKK 6.06 (NOK 6.12) for the first nine
months of 2012.

Value Added Products (VAP):
The operating revenue for the value added segment
amounted to DKK 147.7 million in Q3 2013 (DKK 121.4
million). For the first nine months of 2013, the
revenue was DKK 463.6 million (DKK 372.5 million). The
increase in the revenue from Q3 2012 to Q3 2013 is
22%, while the volumes that went for VAP products only
increased by 15%.

Operational EBIT amounted to DKK -19.6 million in Q3
2013 (DKK 3.4 million), corresponding to an
operational EBIT of DKK -4.66 (NOK -4.96) per kg
gutted weight in Q3 2013, compared to DKK 0.95 (NOK
0.94) per kg gutted weight in Q3 2012. The decrease in
the operational EBIT margins is due to higher salmon
spot prices. The VAP segment acquires its raw material
(fresh salmon) at spot prices each week. For the first
nine months of 2013, operational EBIT amounted to DKK
-84.6 million (DKK 25.5 million), corresponding to an
operational EBIT of DKK -6.36 (NOK -6.38) per kg
gutted weight in Q3 2013, compared to DKK 2.21 (NOK
2.23) per kg gutted weight in Q3 2012.

Fishmeal, Fish Oil and Fish Feed:
The operating revenue for the fishmeal, fish oil and
fish feed segment amounted to DKK 422.3 million (DKK
300.0 million) in Q3 2013, of which DKK 211.5 million
represents sales to Bakkafrost's farming segment
corresponding to 50.0% (68.2%). For the first nine
months of 2013 the revenue was DKK 830.5 million (DKK
641.2 million), of which DKK 480.6 million represents
sales to Bakkafrost's farming segment corresponding to
57.9% (65.9%).

Operational EBITDA was DKK 48.8 million (DKK 41.3
million) in Q3 2013, and the operational EBITDA margin
was 11.55% (13.76%). For the first nine months of 2013
the EBITDA was DKK 104.4 million (DKK 66.1 million),
and the margin was 12.57% (10.31%).

Sales of feed amounted to 31,961 tonnes (30,290
tonnes) in Q3 2013, of which the farming segment
internally used 23,681 tonnes (21,093 tonnes). For the
first nine months of 2013, the feed sale was 65,063
tonnes (66,351 tonnes). The internal sale was 49,084
tonnes (45,296 tonnes).

The Group's total assets as of end Q3 2013 amounted to
DKK 3,004.2 million, compared to DKK 2,570.9 million
at the end of 2012.

The Group's intangible assets amounted to DKK 294.7
million at the end of Q3 2013 (DKK 293.7 million) and
comprise primarily the fair value of acquired farming
licences. No licences in the North region are recorded
with a value in the Bakkafrost accounts. The increase
of DKK 1 million is due to goodwill in connection with
the acquisition of Faroe Seafood UK Ltd., now
Bakkafrost UK Ltd.

Property, plant and equipment amounted to DKK 850.3
million at the end of Q3 2013, compared to DKK 812.8
million at the end of 2012. In Q3 2013 Bakkafrost made
investments in PP&E amounting to DKK 39.1 million and
for the first nine months of 2013 DKK 101.3 million.

Non-current financial assets amounted to DKK 109.8
million at the end of Q3 2013, compared to DKK 91.2
million at the end of 2012. The increase in the
financial assets relates mainly to the positive result
in Faroe Farming, a financial investment.

The Group's carrying amount (fair value) of biological
assets amounted to DKK 867.4 million at the end of Q3
2013, compared to DKK 747.0 million at the end of
2012. Included in the carrying amount of the
biological assets is a fair value adjustment amounting
to DKK 202.2 million, compared to DKK 181.1 million at
the end of 2012.

The Group's total inventories amounted to DKK 311.3
million as of end Q3 2013, compared to DKK 242.9
million at year-end 2012. The inventory primarily
represents Havsbrún's inventory of fishmeal, fish oil
and fish feed, in addition to feed at the feed
stations, packing materials and other raw materials.
Due to higher raw material intake at Havsbrún in 2013,
than in 2012, the increase in the inventories of
around DKK 70 million relates primarily to Havsbrún's
inventory.

The Group's total receivables amounted to DKK 405.2
million as of end Q3 2013, compared to DKK 358.4
million at the end of 2012. The increase is primarily
due to seasonal increase in accounts receivables. On
the other hand there is a decrease in receivables from
an associated company.

The Group's equity as at 30th September 2013 is DKK
1,567.3 million, compared to DKK 1,262.9 million at
the end of 2012. The change in equity for the first
nine months of 2013 primarily consists of the profit
for the period, a negative fair value adjustment to a
currency-/interest rate swap re-lated to the bond
financing and payment of dividend to the shareholders.
Bakkafrost paid out DKK 97.7 million in dividend in Q2
2013.

The Group's total non-current liabilities amounted to
DKK 1,150.4 million at the end of Q3 2013, com-pared
to DKK 990.4 million at the end of 2012. Deferred and
other taxes amounted to DKK 349.6 million, compared to
DKK 258.4 million at the end of 2012. Long-term debt
was DKK 800.7 million at the end of Q3 2013, compared
to DKK 731.9 mill-ion at the end of 2012.

Bakkafrost's interests bearing debt consists of two
bank loans and a bond loan. The bank loans are one
instalment loan of DKK 325 million, payable with DKK
25 million each quarter, and one loan payable in 2016
with the full amount of DKK 553 million. The bond loan
of NOK 500 million was issued at 14 February 2013 and
is payable in full after five years at 14 February
2018. The interest rates of the bonds are NIBOR 3m +
4.15%. Following the issuance of the bonds, Bakkafrost
has entered into a currency/interest rate swap,
hedging the exchange rate and switched the interest
rate from NIBOR 3m to CIBOR 3m. Bakkafrost has entered
the swap due to its exposure to DKK, as a large part
of the income and costs are in DKK and EUR.

At the end of Q3 2013, the Group's total current
liabilities are DKK 286.5 million, compared to DKK
317.6 million at the end of 2012. Short-term interest
bearing debt amounts to DKK 100.0 million and relates
to a short-term part of long-term debt as described
above. Accounts payable amount to DKK 186.5 million,
compared to DKK 217.6 million at the beginning of the
year.

Bakkafrost's equity ratio is 52%, compared to 49% at
the end of 2012.

The cash flow from operations in Q3 2013 was DKK 130.6
million (DKK -53.3 million). The Cash flow from
operations was aggravated primarily by an increase in
receivables amounting to DKK 76.0 million. For the
first nine months of 2013, the cash flow from
operations was DKK 330.4 million (DKK 181.8 million).
The cash flow from investment activities in Q3 2013
amounted to DKK -38.4 million (DKK 14.6 million). The
amount relates primarily to invest-ments in fixed
assets. For the first nine months of 2013, the cash
flow from investments amounts to DKK -107.7 million
(DKK -22.2 million).

Cash flow from financing activities totalled DKK
-15.4 million in Q3 2013 (DKK -0.4 million). The
interest bearing debt decreased by DKK 12.9 million,
and changes in financing of associated companies
contributed negatively with DKK -22.4 million. For the
first nine months of 2013 cash flow from financing
amounted to DKK -83.9 million (DKK -166.7 million).

Net change in cash flow in Q3 2013 amounted to DKK
76.8 million (DKK -39.1 million) and for the first
nine months of 2013 DKK 138.8 million (DKK -7.2
million).

At the end of Q3 2013 Bakkafrost had unused credit
facilities of approximately DKK 600.7 million of which
DKK 15.0 million are restricted.
Outlook

MARKET
The outlook for the salmon market is good. The global
supply of salmon in 2013 is expected to increases by
3%, compared to 2012, also low increase is expected
for 2014. Historically the demand for salmon has
increased 6-7% per year, theoretically resulting in
higher salmon prices in 2013 and 2014. The average NOS
(Independent exporters purchase prise, spot from
farmers) price in Q3 2013 was NOK 39.22 pr. kg,
compared to NOK 25.69 pr. kg in Q3 2012.

Bakkafrost expects to sell around 60% of the harvested
volume of salmon in the spot market in 2013 and around
40% as VAP. The market place is one of Bakkafrost's
most significant risk areas. To reduce the exposure to
the market risk, Bakkafrost has a geographical
approach and a market price app-roach. To diversify
the geographical market risk, Bakkafrost sells its
products to some of the largest salmon markets in the
world, US, the Far East, Europe and Russia. Bakkafrost
´s strategy of selling 40% to 50% of the harvested
volume on contracts reduces the fluctuations in the
selling prices. The sales of value added products are
based on fixed contracts normally lasting between 6 to
12 months, while the whole gutted salmon is sold in
the spot market. The market for contracted VAP
products follows a more stable pattern with trends
instead of short-term fluctuations.

FARMING
Bakkafrost expects to harvest around 42,500 tonnes
gutted weight in 2013, compared to previously guided
45,000 tonnes gutted weight. Due to some postponed
harvest, from Q4 2013 to Q1 2014, the total harvest in
2014 is expected to reach 47,000 tonnes gutted weight.
This means that Bakkafrost will harvest approx 12,300
tonnes gutted weight in Q4 2013.

Faroe Farming, which Bakkafrost holds 49% in, expects
to harvest 5,800 tonnes, compared to previously
estimated 4,500 tonnes in 2013. An increase of 1,300
tonnes gutted weight. This means that Faroe Farming
will harvest around 1,600 tonnes in Q4 2013.

The number of smolts released is one key element of
predicting the future production for the Group.
Bakkafrost's forecast for the smolt release in 2013 is
unchanged at 10 million smolts, which is slightly less
than in 2012, due to available sites for smolt release
in 2013.

The estimates for harvesting volumes and smolt
releases, is as always dependent on the biological
situation in the Faroe Islands. The overall bio-
logical situation in the Faroe Islands is good, but
the detection of Neoparamoeba perurans is a new risk
to handle. The number of sea lice is lower than in
previous years after a coordinated treatment in the
whole Faroese farming area during 2013. The number has
been significantly lower during the summer, compared
to previous years.

Value added products (VAP)
Bakkafrost has committed all the VAP capacity for
2013. So far, below 10% of the VAP capacity has been
contracted for 2014.

The salmon spot prices have been significantly higher
in 2013, compared to 2012. This has affected the
earnings in the VAP segment, as the contracts prices
have been lagging behind the increase in the spot
prices. In the short term, this might continue, but it
is expected that the contract prices will be on a
significant higher level in 2014 than in 2013.

Fish oil, -meal and feed
The major market for Havsbrún´s fish feed is the local
Faroese market. It is expected that the total
consumption of fish feed in the Faroe Islands will be
approximately 90,000 tons in 2013. Depending on the
purchase from external costumers in the Faroe Islands
and abroad, the sale of fish feed will be
approximately 85,000 tonnes.

Due to more raw materials available, Havsbrún has
increased the production of fishmeal and fish oil in
2013, compared to 2012. With increasing quotas for
Blue whiting in the North Atlantic in 2014 together
with test fishing of local Norway pout and off-cuts
from the processing industry, the access to raw
material has improved. However, depending on supply,
demand and the price level, the sourcing of raw
material for the production of fish oil and -meal is
very uncertain. An alternative to Havsbrún's
production of fish oil and -meal is purchasing these
raw materials from other producers, which has been
common in recent years.

Investments
In July 2013, Bakkafrost announced a five-year plan
for optimising its value chain, resulting in savings,
increased production and reduced biological risk. The
yearly investments amount to DKK 170 million per year,
including maintenance investments of DKK 80-90 million
per year. In addition to the yearly investments of DKK
170 million, Bakkafrost will invest in a new well boat
operated by Bakkafrost, estimated to DKK 230 million.
Thus, the total investments will exceed DKK 1 billion
for the 5-year period.

The purpose of the investment plan is to continue to
have one of the most costs efficient value chains in
the farming industry, carry out organic growth,
increase flexibility and reduce the biological risk,
to meet the futures consumers' trends and to be more
end-customer orientated.

All business activities will be retained, but the key
changes to the value chain are the new state of the
art Harvest/Packaging/VAP factory. The investments for
the Glyvrar factory amounts to DKK 300-350 million and
will result in savings of DKK 50-70 million per year,
when the plan is fully implemented in 2017.

Furthermore, the Glyvrar factory will increase the
production capacity, flexibility and expand the
product range. Today, Bakkafrost operates two plants
for production of styropore boxes (Packaging), three
harvesting sites (Harvest), two well boats for
transportation of live fish and two VAP factories
(VAP). All in all seven plants will be merged into one
new integrated plant.

In addition to the new Glyvrar factory, Bakkafrost
will build a new 3,000 m3 well boat, owned and
operated by Bakkafrost. The shipbuilding contract has
been signed, and the well boat is planned to be
delivered in 2015. This investment will increase
capacity, reduce biological risk and increase quality,
fish welfare and flexibility.

Another part of the plan is related to organic growth.
The plan is to increase the smolt pro-duction in terms
of number and size of the smolts. The first part is
carried out now and will be finished around year-end
2013. After this, Bakkafrost will be self-supplied
with smolts at an average weight of 100gram. The
second part is planned to be carried out in 2015 and
comprises investments to increase the average size of
the smolts. The idea is to increase the average weight
from 100gram to around 130-150gram. This will result
in shorter production time at sea and reduce the
biological risk. By doing this, Bakkafrost is able to
increase the production within the existing licenses.

In the Farming division, the plan is to increase the
capacity and the fish welfare by being able to farm
salmon in more weather exposed areas with better water
conditions. Finally, Bakkafrost plans to in-crease the
salmon feed production. This investment is planned to
take place in 2017.

The investments will be financed with cash flow from
operations by the company's existing financing
facilities, and partly with additional financing, if
this is considered beneficial. Bakkafrost's dividend
policy will be unchanged.

To reduce Bakkafrost's financial risk, the investments
are not interdependent and will be made independent of
each other. The investment in the well boat and the
new harvesting plant are, to some extent, dependent on
each other, as a new well boat cannot be fully
utilized without one large harvesting plant. The
commitment for the other investments will be carried
out project by project during the coming years.

Financial
Improved market balances in the world market for
salmon products and costs effective production will
likely improve the financial flexibility going
forward. A high equity ratio together with the Group's
bank financing and the issuance of bonds, makes
Bakkafrost's financial situation strong, which enables
Bakkafrost to carry out its investment plans to
further focus on strengthening the Group, M&A's,
organic growth opportunities and fulfil its dividend
policy in the future.

Contacts:
Regin Jacobsen, CEO of P/F Bakkafrost: +298 23 50 01
(mobile)
Teitur Samuelsen, CFO of P/F Bakkafrost: +298 23 51 11
(mobile)

This information is subject of the disclosure
requirements acc. to §5-12 vphl (Norwegian Securities
Trading Act)

About Bakkafrost:
Bakkafrost is the largest salmon farmer in the Faroe
Islands. The Group is fully integrated from feed
production to smolt, farming, VAP and sales. The Group
has production of fish meal, fish oil and salmon feed
in Fuglafjørður. The Group operates licenses on 14
farming fjords. The Group has primary processing in
Klaksvík, Kollafjørð and Strendur and secondary
processing (VAP) in Glyvrar and Fuglafjørður. The
headquarters are located in Glyvrar, and the company
has a total of 590 employees.


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