To get started, I would like to welcome you all to BioMar's 2026 Q2 conference call. During the presentation from the CEO and CFO, the participants will be in listen-only mode. After the presentation, the participants are able to ask questions by dialing the phone number you received, then press pound key five. I will now hand over the conference to the speakers. Carlos and Claus, please go ahead.
Hello to everybody. I am Carlos Diaz. I am the CEO of BioMar Group.
I am Claus Eskildsen, I am CFO at BioMar.
Let us start with agenda. We will talk a little bit about BioMar, some financial highlights, business review and guidance for this quarter. I always like to start my presentations with this, our purpose. This is what guides BioMar. Right now it is more important than ever because of the turbulent times in the world, but also in the raw material world that we operate.
We are innovators dedicated to an efficient and sustainable global aquaculture. Innovation will be key. It has been key during the year, but it will be even more important going forward in the year. Just as a reminder of our industry, we operate in a very attractive, growing industry, aquaculture, around 22 million tons of production, EUR 25 billion. Feed, as you can see in the slide, is in the middle of the aquaculture value chain.
That means that it's a very important part of the value chain, the key part of the value chain, but also, we believe, the most attractive part in the value chain. Up to 80% of farmers' carbon footprint comes from feed. 50% of the OpEx, or cost, comes from feed also. It is the main driver on performance and health of fish, and is disconnected from the farm price gate, from the prices of fish or shrimp from our farmers. How do we address our business model in this industry? We are the global number three, and we have a very good footprint around the world in the main aquaculture hubs. We have a comprehensive group of feed solutions to address our customers. We are very well invested in R&D solutions and also sustainability solutions.
We have an integrated business model with a resilient cost pass-through of especially raw materials, through adjustment of prices quarterly, either to baskets or cost-plus models. Because of the importance of the feed, we have more longer contracts with fixed margins, which allow us to have good visibility in order to achieve a very nice return on invested capital, and finally, cash flow generation. Some key highlights from 2026 Q2. The business model and financial performance proves its resilience. Q2 delivered underlying improvement and strong growth despite the raw material volatility, geopolitical turbulence, some IPO costs, and some Tech Solutions restructurations in a transition year. The underlying feed performance is strong. We have increased our feed volumes by 3% in Q2, 5% year to date, while the feed EBIT increased 7% in Q2 and 10% year to date.
Shrimp is the main driver for this growth, but of course, the mix impacts the EBIT per ton. As we have said, basically, the feed for shrimp is cheaper than the feed for fish, therefore, the price is cheaper, the turnover is cheaper, and the EBIT per ton is cheaper. That doesn't mean that the EBIT percentage is lower. It is as good as in the rest of the fish. Raw material volatility highlights the strength of our business model, our formulation expertise, our sourcing flexibility, commercial model across the world to enable us to navigate this raw material price volatility in a very good way. We have to remember that fish and shrimp do not grow on raw materials, they grow on nutrients.
Our formulation knowledge is what allow us to face these raw materials increases, mitigate the effect for our customers, but at the same time, have more value for BioMar. Last but not least, capacity expansions in Ecuador and China are going well on the way, in a path to transform the business and grow in these very important markets for BioMar.
Moving to the financials, where the quarter demonstrates the resilience of our business. We delivered record high volumes, both quarterly and year to date, with good momentum across our feed segments. Shrimp was the strongest contributor, with 18% volume growth compared to Q2 2025, reflecting continued market share gains in BioMar Ecuador. The revenue was positively impacted by higher volumes and higher raw material prices that began increasing in Q2, especially the marine ingredients. Currency helped with approximately DKK 19 million for the quarter. FX impact for the full half year is actually negative, with DKK 15 million. EBIT was slowly down as expected, mainly due to higher IPO costs and the transformation in the Tech Solutions, plus some higher depreciations from a larger asset base and leasing of vessels. EBITDA was up with DKK 8 million.
Return on invested capital not only remains solid, it was further improved to more than 23% after Q2, supported by disciplined working capital management and improved last 12 months earnings. Net working capital declined DKK 100 million compared to Q2 2025, even at higher activity levels and higher raw material costs. In essence, volume remains strong. The momentum is strong. Combined profits from the three feed segments increased, and the EBIT softness that we see in Q2 reflects deliberate investments that we have chosen to make.
This slide steps down into the profit and loss and shows how we are building the business for future growth. The EBIT is positively impacted by almost DKK 30 million from higher feed volumes sold, but the increase in EBIT is primarily margin driven, supported by strong EBIT per ton development in the feed segment.
We see a positive effect from product and customer mix, and our ability to navigate in raw material volatility through innovation, sourcing, and commercial excellence initiatives that are bringing value to BioMar and our customers. The margin impact is more than DKK 90 million compared to Q2 2025. On costs, staff costs are up due to ramp-up activities in Ecuador and Tech Solutions, positioning us for continued growth. The increase is also reflecting general wage inflation, especially in tight labor markets and IPO completion bonus. Other costs are higher, mainly due to higher IPO-related costs, consulting costs, and manufacturing and IT initiatives that is improving our efficiency.
For comparison, maybe it is also worth to mention that we, in Q2 2025, had a one-off gain of DKK 17 million from the acquisition of the remaining 66% of the shares in LetSea in Norway, which explains a part of the delta increase we see, of course, compared to Q2 last year. Total IPO costs in the quarter were DKK 18 million, which is DKK 15 million higher than the same quarter last year.
Depreciations increased, reflecting a larger asset base from Ecuadorian expansion initiatives last year, and also a new administration building in Norway and leased vessels in Norway. EBIT ended at DKK 250 million. It is worth to have in mind that without the IPO cost of DKK 18 million, and if it was not for the HU1 transformation that we are doing right now, EBIT would have been around DKK 280 million.
On the joint ventures, we operate two joint ventures, one joint venture in Turkey and another joint venture with a partner in China. We have one factory in Turkey and two factories in China. They have had a very good start of the year. They have sold more than 50,000 tons of feed combined for the quarter, and that represents a revenue of a little bit more than DKK 500 million and an EBIT of DKK 34 million. Revenue is a little bit higher than same quarter last year due to primarily raw material prices. Earnings is slightly lower.
But again, we see that they have had a very good start of the year. Return on invested capital continues to benefit from disciplined working capital management and increased last 12-month earnings. Net working capital was reduced by DKK 100 million, and we remain at 10% compared to the last 12-month revenue.
Within net working capital, inventories are up due to higher activity, but also higher raw material prices, and also strategic procurement of specific raw materials. Trade receivables came down, reflecting that a few large key customers have brought down their balance, and we see a higher utilization of our non-recourse factoring facility that allows us to reduce the commercial risk from a number of specific customers. Trade payables increased in line with the higher inventory levels and higher raw material prices. On the cash flow, we see a decline in operating cash flow, and that is primarily driven by some higher income taxes paid in the quarter, following some earlier dividend paid up from the Ecuadorian business to Denmark, and the withholding tax is paid in the following period. This is what we are seeing now.
Maybe also worth to mention that if you look into our material, you will see that cash flow for the first half year, operating cash flow is minus DKK 100 million compared to plus DKK 200 million after the first half of last year. And we are actually following our plan for the year. But the deviation that you look at is actually only a timing impact on net working capital, how we start the year compared to the normal level.
Remember, we had previously said that we ended net working capital end of December lower than expected. So there is, you could say, a prioritization going into 2026. On the net interest-bearing debt, that has increased, mainly due to two specific items, the acquisitions of the remaining 30% of shares in BioMar Ecuador and the payment of dividend of DKK 850 million to SalMar Company in Q1 this year.
The key takeaway is returns remains strong.
Let's continue with the market update. The aquaculture market fundamentals remain supportive across all key species and geographies. The favorable biological conditions, in most of the markets, both in salmon, shrimp, but also in other species. Farm gate prices, unfortunately, have declined both in salmon and in shrimp, not yet in other species, which of course, makes it more challenging to our customers. Raw material markets, as I explained before, are really volatile, especially marine raw materials, due to El Niño. I will explain further what is happening and what we are doing to counteract that effect. The current market environment reinforces the value of BioMar's knowledge. Formulation, being able to replace raw materials, and come with good solutions for customers, it is key, for this year and in Q1, Q2, but also for the remaining part of the year.
This slide, a little bit crowded, just to explain what is happening with the raw materials, with the marine raw materials. As we said, we have had a big increase, a big volatility. The main effect is El Niño, which is reducing the quotas in Peru, which is the main fishing country, and producer of fish meal and fish oil. Limited supply flexibility, of course, and the demand from aquaculture, but not only from aquaculture, also from human consumption, continue quite strong.
So if you see the graph, there is a decrease in fish oil of around 31%, an increase in 49%, which is quite significant with the demand that we have right now. That is the reason why average prices for the period compared to last year are increasing quite a lot, 100% or more for fish oil and around 50% for fish meal. What are we doing?
This is innovation R&D. This is where R&D really comes into play. Being able to complement or replace these raw materials, and at the same time maintaining the performance and maintaining a good fatty acid profile, especially in salmon, which needs to be rich in omega-3, EPA and DHA. This is key. So having access to a big basket of raw materials, it is key in this period, but also at the same time, having the knowledge of how to combine it and having tested these raw materials before preparing for this period.
Multi-sourcing strategy, of course, this is what we have had in BioMar all the time, trying to source from different places, different suppliers, but also different geographies around the world in order not to be dependent on one supplier and one geography. Our commercial model, of course, supports that.
We try to mitigate as much as possible, also for our customers. But what we cannot mitigate, we are able to transfer into prices due to price adjustments quarterly, either on baskets or cost-plus. Innovation continue, evaluating different sources, novel raw materials, algae oils, single-cell proteins, different raw materials that can play a very important role in this period, with very high volatility and high prices. Of course, we are a diversified footprint.
We have, of course, plants all around the world. We feed many species, not only salmon. That, of course, helps BioMar to drive this period in a better way. As Claus was mentioning, we have some effects from higher costs, because of IPO in the quarter and in the first half. We also have the effect of the Tech Solutions part, but this slide is showing just the feed segments.
If we look at them, we can see that our volume growth was 3% and our EBIT 7%, comparing quarter to quarter this year. In the year to date, it was 5% and 10%. The feed segments are really performing according to plan or better. The lower absolute EBIT per ton in shrimp, of course, have a dilution of our EBIT per ton. But as I said before, the EBIT percentage remains attractive, and the growth in this segment is what we are pursuing. Our strategy to strengthen the core in salmon and fish or selected species, but at the same time grow significantly in shrimp is working, and this is what we are seeing in our results.
Turning to the salmon segment. Overall, we have seen good weather and biological conditions driving strong volume growth in both Australia and in the U.K. Norway went the other way. Volume decreased a bit, but that was expected and structural. It was not biological. The lower volume in Norway reflects the loss of a customer following a customer consolidation in the Norwegian market. Total volume for the segment decreased 6% compared to the same quarter last year. Importantly, EBIT per ton increased, driven by customer and product mix. So the segment is earning more money per ton of feed that we are selling even where volume moved sideways. EBIT is on level with Q2, but on a lower volume. Looking forward, our customer relationships in salmon are strong, underpinned by our innovation, sustainability, sourcing capabilities.
That positions BioMar well to help customers to mitigate and navigate raw material volatility as we are seeing for the time being, which is exactly where the value of the partnerships shows up. To summarize, healthy underlying performance in the segment, as Carlos also said, a known and explainable Norwegian volume effect, and margin quality moving in the right direction. If we move to the shrimp segment, the strongest volume story in the portfolio this quarter, exceptional volume increase at 18% compared to same quarter last year, driven mainly by Ecuador. The growth was based on a strong relationship with key customers, which is what's allowing us to keep winning market shares in the largest shrimp market globally. EBIT increased 6% due to a lower EBIT per ton. There are three reasons why EBIT per ton is reduced.
A higher share of standard feed sold to large key customers, higher use of toll milling in Ecuador that allows us to ramp up volume while we are waiting until we are increasing our production capacity later this year and also next year, and intensified competition in Vietnam. If we move to selected species, this segment delivered continued growth, leveraging our position as the preferred feed supplier in the local markets, and that position rests on three things: superior performance, deep customer relationship, and technical expertise. And in these markets, the combination is difficult to displace.
EBIT per ton also increased. So we are getting growth and margin improvements at the same time. The drivers are product mix, better capacity utilization across the markets and our units, and our commercial excellence initiatives. The last segment is the Tech Solutions, where the story this quarter is about transformation, not run rate performance.
We are shifting the business model in Latin America from a distributor model to direct sales, and that transition is progressing as planned. The rationale is straightforward. Direct sales lets us capture more of the available business potential and build a stronger base of recurring revenue. The transition had a temporary negative impact on sales and earnings, which we have also informed earlier. That was anticipated and built into our expectations. We expect it to normalize during 2026, and importantly, market demand remains strong. So this is a channel change rather than a demand issue. We are investing in organic growth and R&D to build new AI solutions based on our proven core technology, combined with new technical innovations.
Going through the quarter and all what we have elaborated with Claus, we are prepared to raise our guidance in reflecting the momentum uptick. We are increasing our volume guidance from 1.61 to 1.67 to 1.63 to 1.700. The main reason for this is, as Claus mentioned and I mentioned before, good biological conditions in many of the markets, but also new, bigger share of some contracts and new contracts in some of the segments that we are operating. In terms of EBIT, we are raising the bar from 1.1, 1.2 to 1.2, 1.3. The main effects are higher than expected volume growth, which of course is bringing more EBIT.
Improvement in product and customer mix is different customers and different contracts, and they require different products, which is more favorable for us. The ability to navigate in this very difficult period, with the marine raw materials, where we have good solutions in order to mitigate our customers, but also that create more value for us. And we have also some effects, in the figures, which are helping to increase the guidance. Revenue is increasing from, we previously DKK 16 billion-DKK 17 billion to DKK 17 billion-DKK 18 billion.
The main effects is volume growth, again, but a lot of it is coming, as you know, we transfer the raw material cost, so a lot of it is coming also from the inflation of raw materials, plus also a significant effect from FX. Last but not least, CapEx. We made, before a guidance with DKK 300 million-DKK 500 million.
Now we are well into the year, so we know better what is happening, especially with investment in BioMar Ecuador. So we narrow this guidance to DKK 400 million-DKK 500 million, which is where we believe we will end. We continue having the same target in our capital structure, one to two times, and interest rate debt over EBITDA. And we target that our dividend policy continue to be the same. Our return on invested capital, as I said before, is very good. So we are well, also into our guidance on return on invested capital. And having said that, we open the microphone for questions.
Good. That concludes Carlos and Claus's presentation. If you wish to ask a question, please dial the phone number you have received and end with pound key five. That was pound key five. To enter the queue, if you wish to withdraw your question, please press pound key six. We have some questions coming in. Emil Haargaard from DNB Carnegie. Please.
Yes. Thank you for taking my questions, and well done with the guidance and the solid Q2 report. A few questions from my side. I suggest we take them one by one. My first question goes to the guidance upgrade. Can you add some color on how significant a lever are the current elevated marine ingredient prices in determining whether you end up at the lower or upper end of your new guidance ranges relative to the other components you mentioned, where I assume the full year visibility is stronger given it is related to wallet share gains, new product wins, and mix effects. Is this the key moving factor to the new guidance on revenue and EBIT? That will be the first question.
Yes. Should I answer?
Yes, sure.
I think, actually, more clear, Emil, it is when because we know what to do with this, and we have the positions in place and our knowledge in place. So we know exactly what to do in the second half on our recipes to do this. So that is more or less in place. There is a lot of uncertainties, but also because our positions are in place. Actually, the biggest uncertainty, I would say, is the volume, the biology as usual. You know in this business, biology can play a big role. So if you have to put a percentage to it, a part of it is volume. Another part is what you were mentioning, maybe one-third. And the third part is because of the different volume and it is the contract mix and the product mix.
If I have to give you a good guess now, it is one-third, one-third, and one-third. So it is not fully dependent on what you are mentioning. The other ones are more variable.
Perfect. That is very clear. Moving on to the second question, which is also related to the current and the new situation, and thank you for the detailed walkthrough of the situation as part of the presentation. So my question goes to when customers shift toward alternative nutritional solutions, how should we think about the margin dynamics there? So does the wider price gap between marine ingredients and alternatives translate into margin, or is pricing structured so it is largely margin neutral? Because it seems like from your updated guidance that this is not only a cost cross tailwind in absolute terms, but also drives the potential of lifting margins. So, any color on that would be appreciated. Thanks.
Yes. As I said, well, there is many different customers, contracts, species, and pricing mechanisms. First of all, we have to remember what I said before, fish and shrimp grows on nutrients and not raw materials. Okay? Having said that, of course, especially salmon, but there are also other species, need a certain level of omega-3 EPA and DHA. That either using only fish oil or you can use a mix of other alternatives in order to mix to do exactly the same level required or even better, sometimes. That happens not only with fish oil. This could happen with proteins. The fish and shrimp do not need fish meal or soya oil. They need a certain amino acids in order to build muscle.
The ability of being always on top of innovation, creating these mixes and these alternative ways of mimicking what a certain raw material have, that is what BioMar do. Today, it could be fish oil or fish meal. Tomorrow it could be protein. We, as BioMar, are always looking not for a competitive advantage, but for a renewable competitive advantage. In some of the contracts, it's a cost-plus. In some of the contracts, it's a price. In some of the contracts, it's a basket. So it varies from species to species, contract to contract, and customer to customer. There's not one way of doing it, but the main philosophy is what I explained to you before.
Okay. So if I understand correctly, there's potential to increase margins based on this situation due to your, I would say, superior feed flexibility or raw material flexibility, if that's correct.
You are competitive and as long as you are mitigating the biggest effect to the customers. Definitely.
Yes. Understood. And last question from my side will be on the shrimp business. The first leg of the Ecuador capacity expansion comes online at the end of this year and in part in late 2027. Is it possible for you to just roughly quantify how much of the capacity is effectively pre-sold through customer contracts?
Yeah. As you mentioned, the first project is coming the last quarter of this year, so of course the full effect will not be this year, and that is around 110,000 tons of capacity on a full year basis. The second project, which is the biggest part, comes at the end of 2027. That is a much bigger project with another 200,000 ton capacity. As I said before, as I mentioned in the industry outlook, more and more feed suppliers are becoming extremely important for customers.
It was the case in salmon before, but now it is moving very fast into other species, especially into shrimp in BioMar Ecuador, that customers are securing feed and going for long-term contracts. Specifically in BioMar Ecuador, without mentioning names, of course, we have signed two big long-term contracts and on the way to signing.
We could say that most of the capacity is committed for project one and project two. That is exactly the reason why we are having to use toll milling in this period in order to ramp up immediately when they have the capacity ready.
Perfect. Thank you very much for taking my questions.
Thank you for the questions.
The next on the line is Ulrik Bak from Danske Bank. Please go ahead, Ulrik.
Yes, hello, and thank you for taking my questions. I will also take them one by one. The first one is on your upgraded volume guidance. Could you perhaps be a bit more specific about what segments you have won additional contracts in? If you can provide any details about the contract duration and anything else of the nature of the contracts, would be appreciated.
Yeah. We cannot name the customers, but it is mainly in the salmon segment. It is both new volumes contracts, some of them two to three years, some of them one year, and some of them are increase of our share in a long-term contract. That is the main effect. So it is the salmon segment.
All right.
We are able to compensate what we were losing. As you remember, in the Q1, we were losing, in some of your reports, we can see the Nova Sea because of the acquisition of Mowi. Fortunately, this second half, we are able to recover a big part of those volumes, through other contracts or higher share of existing contracts in the salmon segment.
All right. That makes sense. And perhaps on that note, earlier this quarter, we saw SalMar acquiring a controlling stake in another fish farmer called Måsøval. First of all, is that a customer of yours? If so, what do you expect to happen to those volumes? Perhaps in more general terms, as this consolidation of the Norwegian fish farmer market continues now with Nova Sea acquired by Mowi and Måsøval from, by SalMar, how do you think about your salmon division in Norway going forward based on those dynamics?
Yeah. We are confident that we are extremely well-positioned, to be very honest. Måsøval just happened, and Måsøval is partly our customer. We have a good relation with SalMar, so I do not see any reason why not to continue, but of course, that will be their decision. But we are well-positioned in many customers and in many of the, what you could call, the consolidators. So the capacity in the Norwegian market is not unlimited. So, to be honest, no matter who buys whom, at the end of the day, they need feed, so someone needs to supply it. So at some stage, I do not know if LetSea that it was extreme, that someone buy everything, he need to use all the suppliers. So one thing is the consolidation, and the other thing is the feed capacity.
The feed capacity in Norway, it is quite limited and constrained right now. So we are not worried, to be honest, of losing volumes. As we explained last year, this year, we lost Nova Sea, and there was not that many contracts for renewal. That situation is changing, as we also said last year. So the new volumes are up now for renewal, so some movements can come and a change of hands in different big customers. So the answer is no, we are not worried now about the future of our business in Norway.
Understood. Then a question about Chile. According to market data, feed demand and biomass processed been negative, in Q2. Is that also seen in your business? Are there any signs that this is turning around to become less of a headwind in H2?
Not in H2, actually. In half two, I do not think it will turn around. Maybe it will stay the same or the opposite, actually, which to be honest, could be good for the prices of salmon in Chile. Going ahead, I think a lot of what you see in Chile is regulations. I am Chilean, so I know the government there, what they do and they do not do. It has been really restricted in the past. I think the Chilean customers can tell you the regulations are possibly changing for the good, for the positive, and that could allow more growth in Chile in the future, because a lot of it is regulations and restrictions.
All right. Then on the Tech Solutions division, you are doing this turnaround of the business model. Have you seen any delays or is it on track? Now you have been loss-making in H1. Do you expect that to turn around and then become profitable in H2 already? Will it take longer to materialize?
The plan is absolutely on time. What you are seeing there, as we explained before, two things. First of all, we are moving more to a recurring revenue, and as a consequence of that, some of the historical distributors, maybe they did not like that move. We are going directly to the market, especially in BioMar Ecuador. That has already been done. Of course, it is an historical distributor, and we have had very good relations, and they have a stock, so they have to sell their stock. We have already built the organization to handle it ourself. All the operations and organization in BioMar Ecuador are ready. It is just a question of finishing the stock, and we can start selling directly. So far, it is starting very good, and it is well on track.
Okay. Then final question. Your leverage ratio net debt to EBITDA is now down below 2x. Could you just refresh our memory about your capital allocation priorities as you deleverage further during the year? That is what you usually do.
We are aiming to have a debt leverage between one and two. It is, as you are saying, it is higher than what we normally see at this time of the year. That is due to, as I explained, the dividend paid and the acquisition of the shares in Ecuador. There are seasonality at BioMar and in our industry. In second half of the year is where we have the strongest cash flow. I am very confident that we will be able to reduce the debt leverage from now and throughout the rest of the year.
Once that is done. Sorry, just to follow up. Once that is done, of course you need to use CapEx for the shrimp expansion. In addition to that, what are you looking for in terms of capital allocation?
It is not that. Of course, we are constantly looking into possibilities in terms of M&A opportunities. We do investments in our business, normal maintenance CapEx, also investments that can help on our production efficiency. So different kind of investments, but there is no larger investments right now. We have informed about the production capacity projects we have in Ecuador, and those are the largest we have right now. Previously when we gave the guidance earlier this year, we said that we would like to balance both. First of all, we would like to secure that we have a high return on invested capital. This is key to us. We have the policy for dividend, and we also have our own target for debt leverage.
Those have to go hand in hand so that we, all the time, have a strong return on invested capital, but we also earn cash flow so that we can invest in future growth and pay dividend at the same time. There is nothing else to add right now in terms of capital allocation.
Understood. Thank you.
Just as a reminder, if you wish to ask a question, please dial the phone number and end the pound key five. The next question comes from Claus Almer from Nordea.
Thank you. Also a few questions from my side. If we start at BioMar Ecuador and your new capacity to be at end of the year, how will this impact your profitability? Maybe first as a negative, as you are going to add some FTEs and the like, then when you are producing on own lines rather than third party producers should probably be good for the margins. That would be the first question.
Claus, of course, we are paying, you could say, a penalty now for using the production outside of our own factory. We see that as an investment for future growth. Of course, that will disappear when we can produce the feed ourself. I think that it might be that we will still be able to use, or we would like to use some toll milling going forward. It depends on the situation and also the volume growth that we see. For sure, there's a reason why we are investing so heavily in our own production facility and of course, that will also have a positive impact on production costs. It's not that we have any specific amounts to share right now how productivity costs will be afterwards.
Claus, should you more think about it when the new capacities or new factories come online in next year, that will be the main impact. Is that how to think about?
First of all, when the new line is ready end of this year, the first step of this expansion, that will add 110,000 tons more capacity on an annual basis. Of course, as Carlos said, it will not have much impact, because the new line will be commissioned late this year, so we'll see a limited impact on volume on that line this year. Of course, full year effect next year. Furthermore, the new factory will be ready end of next year, and that will add more than 200,000 tons. That will also have full year effect in 2028. Of course, it will help on the production cost, Claus.
But no quantification at this point?
No quantification right now, no.
Fair enough. Then in Q1 you mentioned or explained the shrimp negative profit development as also sourcing costs, where you had to source locally, and that should normalize, I think actually you said in Q2. Did that happen or are you still looking at a benefit from sourcing cheaper in the coming quarters?
Basically, as you know, Ecuador, and this is again back to some marine raw materials. Ecuador has been producing some marine raw materials, but smaller production. But that has not been that available right now. Maybe we were trusting too much in Q1 that that was going to be the case. We had to, in Q1, go to buy, not last minute, but not when we should, to go to buy at a more expensive than what our pricing models were showing for Q1. Remember that we adjust the prices every quarter. But yes, to your question, that is corrected. Now we have a bigger basket also for BioMar Ecuador, of raw materials, and it is of course built into the pricing of the different customers.
That sounds great. Then, also a question regarding the competitive landscape. I think it was you, Carlos, who mentioned that the competitive landscape is fierce, both in BioMar Ecuador and Vietnam. Is there anything in the coming quarters that could improve the situation, or it is the new norm?
Yeah. I think it is very fierce in Vietnam. In Vietnam, it is extremely fierce, and that is why it is giving us more difficulties to ramp up as we would like to. It is different competitors in Vietnam. It is not the usual suspects that you see all over the world, Skretting or Cargill or the international ones. It is mainly the Chinese ones that are trying to enter in Vietnam. Yes, in Vietnam, it is being tougher to ramp up in a profitable way.
BioMar Ecuador is, I would say, is normal competition. Everyone is trying to position in the contracts. As I said, we are well-positioned with long-term contracts, in big companies, and in order to fulfill our capacity. Yes, there would be more competition than in the past, but nothing to be really worried about in Ecuador so far.
In the rest of the world, we said that still there is competition. Don't take me wrong. There is quite also some competition in salmon, in the rest. But we believe we are well-positioned in terms of knowledge, in terms of raw materials. Specifically Norway, I think there is one element which is also helping us, that maybe we forgot to say.
For a long time, we have been punished because of our decision, to get away from Russia and not buying raw materials in Russia, in Norway. That of course had quite an effect because our competitor did not do it. For a long time, we are facing not marine raw materials, but more expensive vegetal raw materials. Fortunately, the Norwegian government decided to do something, also the retailers, and some of our competitors are not able to do that anymore.
That, of course, helps BioMar because we have not been doing it for years now.
That is going forward, or did that already happen in Q2?
This already happened in Q2, so going forward, no one will be able to use the Russian raw materials, and the retailers. If the government doesn't ban it, but they are banning it, the retailers will not allow it.
Okay. That's helpful.
Claus, can I come back to your first question where you talk about the lower EBIT per ton in the shrimp segment?
Yes.
Because you were asking about the impact on the toll milling. Please do not focus on toll milling only. As you know, and this is your question number two, Vietnam is also part of the segment. Volume has increased in Vietnam, and that is positive. We're trying to ramp up the volume. To be very honest, the profit is simply too low still. So we are trying to build some scale, of course, ramping up volume, and then doing that, there will be a positive scale impact, and a higher profit. So that is also a part of the storytelling of the lower unit per ton segment.
Fair enough. Thank you so much for that clarification.
Good. There seems not to be any further questions. For that reason, I will hand over the conference to Carlos for any closing comments.
Well, thank you very much for assisting to this first quarterly presentation. We hope that we will be able to be in contact with all of you and showing what we're doing in the most transparent way possible. Well, I'm looking forward to deliver on what we are saying right now. Thank you very much to everyone, and we'll see you in the next conference. Bye.
Thank you.