Financial
Performance

Risk management
Iceland Seafood International’s activities are exposed to a variety of risk factors related to its operations and financials. Effective risk management is important to minimize the risk of material misstatements and for the business to perform. Detailed information on risk factors can be found in the Base Prospectus, published last in October 2025 which was originally published 2019 in relation to the Nasdaq Main Market listing, and is available on the Company’s website.

The following description of risk factors is not complete and is not listed in any order of priority.

• CURRENCY RISK: The Group reports in Euros and is therefore exposed to currency risk, particularly through its subsidiaries in Argentina, which operate and report in a different functional currency. In Argentina, both purchases and sales are conducted in USD, which helps reduce exposure to the local currency (ARS). There is also a minor exposure in the Icelandic subsidiary, where administrative expenses and salaries are paid in ISK, though this risk is considered insignificant.

In addition, individual subsidiaries use forward contracts to manage currency risk, for example when purchasing raw materials in foreign currencies for the local market. In certain markets, especially Iceland, purchases are made in the same currency as sales, providing a natural hedge.

• SUPPLIER RISK: The Group is exposed to risks regarding suppliers, in both the wild and farmed seafood sector, as it sources its products from specific origins and production methods. This potentially limits the number of suppliers the Group can purchase from in some instances, although the Group has a wide supply base. Currently, four large Icelandic seafood companies, which hold a significant share of Iceland’s national fishing quotas, are significant strategic shareholders in Iceland Seafood, which the Company believes mitigates the risk.

In Argentina, the issuer is both operating two freezing trawlers and cooperating with a raw material broker and vessel owners that hold licenses for fishing Argentinian shrimp. To secure the raw material needed for the Issuer’s production, agreements have been made where these counterparties are obliged to sell the raw material they catch to the Issuers operation for a defined period of time. As consideration for this commitment, the Issuer provides pre-payment to the counterparties for the raw material.

 
• CREDIT RISK: The credit risk of the Group mainly relates to accounts receivable, i.e. those customers are not able to pay for goods that the Group has sold to them. The Group carefully controls this risk, with the vast majority of receivables credit-insured. The Group does not take uninsured positions against a customer without first conducting an appropriate risk assessment.

• LIQUIDITY RISK: The Group manages liquidity risk by ensuring sufficient liquidity is available from current bank facilities to meet foreseeable needs and to invest cash assets safely and profitably. The Group´s main sources of financing are a multi-currency revolving credit facility with an Icelandic financial institution, a 3.5 year unsecured bond listed on Nasdaq Iceland, two 6 month bills listed on Nasdaq Iceland and credit facilities with number of banks in Spain which finance the Southern Europe division. At end of December 2025 the total headroom of the Group was EUR 37.8 million including cash.

• INSURANCE RISK: The Group has appropriate insurance policies in place, which provide insurance cover against product and property damage, certain delays, general liability and environmental liability in accordance with normal practice within the industry. Additionally, the Company maintains Directors and Officers insurance for its executive management.

• POLITICAL RISK: Political and economic instability in different markets could have a negative impact on the Group’s operations. The Current crisis in Ukraine and related economic impacts have significantly affected the seafood industry and, in turn, the Group’s operations. The Group’s diversification, across markets and customer bases, helps mitigate this risk.

• INFORMATION SECURITY RISK: The risk of failure when it comes to securing information systems and data is evident, which can cause operational disruptions and financial losses. The risk of cybercriminals breaking into our suppliers’ systems and directing payments from us to fake bank accounts is also evident. The Group has taken significant measures to protect its systems against cyberattacks and to ensure appropriate security levels for payment transfers. The Group has also implemented the appropriate processes and procedures to control this risk and ensure appropriate actions in terms of adverse events.

• CLIMATE RISK: Ocean acidification – The majority of the global carbon cycle is circulated through the ocean, which absorbs the greater part of excess heat from GHG emissions, causing acidification. The ocean is home to a wide variety of marine species, and acidification disrupts the ocean’s life balance, which can affect seafood supplies. Extreme weather events – Climate change increases the frequency of extreme weather events. This can affect the availability of seafood due to dangerous sea conditions and delay its transportation from the producer to the end consumer.