Good morning, and welcome to the Fourth Quarter and Full Year 2023 Presentation for Aker BioMarine, where myself and CFO Katrine Klaveness will take you through the highlights and the financials for the quarter and the full year. 2023 has been an eventful year for Aker BioMarine. We have delivered record growth. Never before in the history of Aker BioMarine have we grown organically as much as we did in 2023. We have also successfully implemented a large improvement program across the whole business, yielding significant savings. And we have also completely restructured the company, launching now in the beginning of January 2024. We ended the year at $335 million of revenue, which is 21% higher than the last year, driven by good performance across all our major segments.
On the EBITDA side, the ingredient segment delivered $19 million of EBITDA, up from $16 million at the same quarter last year. The brand segment delivered $0 EBITDA, down from $2 million of EBITDA in the fourth quarter last year. And then when you include the eliminations between the segments, the group EBITDA landed at $18 million for the quarter, down from $21 million the same quarter last year. We had a disappointing harvesting performance in the fourth quarter of 2023. We had our two largest vessels, Antarctic Endurance and Antarctic Sea, in dry dock for five-year class, and the scope and complexity of that maintenance work was higher than what we had anticipated. And as a result, we only fished Saga Sea in the fourth quarter.
As a result, we only delivered 51,000 tons of product produced during 2023, down from 52 the year before. But once the vessels came out of shipyard into the fishing field, they've been performing really well. We have now the drone active, and working as we have intended. And so far this year, we have produced 15% more than what we did the same period last year, which already was a quite good beginning of 2023. As mentioned, we have completed the restructuring. We went live in the beginning of January, totally smooth, without any challenges. And we have also today announced the initiation of a strategic review for the feed ingredient business, which we will talk more about later in the presentation today.
So, when we look at the quarter in totality, $83 million in revenue, up from $79 million, the same quarter last year. And then EBITDA landed, as mentioned, at $18 million compared to $21 million. If you look at the full year, on the left side, you can see the revenue development and the significant growth we delivered in 2023. And you can also see EBITDA landing at $70 million for the full year. That is negatively impacted by two main factors. One is that fuel prices in South America has been exceptionally high during 2023, impacting the cost of goods for our aquaculture products and our margins in that business.
And secondly, we have had limited production in Houston as we've been building down inventory, and then we have less product to divide the total cost on, and the same thing happens there. Cost of goods goes up, and margins comes down. These are all temporary situation, but as a result, the EBITDA is lower in 2023 than what you should expect, given the top line growth that we demonstrated. Some more details on the harvesting side. So we produced just below 1,000 tons in the fourth quarter, and as mentioned, that is due to the dry dock maintenance for Antarctic Sea and Antarctic Endurance becoming much more lengthy than what we had anticipated.
So every fifth year, we do what's called five-year class on the vessel, which means we take them to land, and we do more maintenance than normal, and we do all the maintenance that's below the sea surface. It is five years until next time you will bring the vessel to land, so you have to take everything that you find. And this year, the scope of that maintenance work became higher and more complex than anticipated, and as a result, Endurance entered the fishing field just before New Year, and Antarctic Sea actually entered in around tenth of January. And that is the main driver of the shortfall in the fourth quarter.
As mentioned, also, the USV or the drone has been implemented, and I think we can say that it's working according to all our hopes, and we have already used it several times so far this season to optimize our harvesting. Also, good start due to that and also some other initiatives that we have implemented at this year's shipyard. We are tracking 15% better year to date in 2024 compared to the same period last year. To talk a little bit more about the totality of the 2023 harvesting season. So there was two things that impacted negatively the performance over the year. But aside from that, it was actually a quite strong season.
So the first negative impact for 2023, it's what we could relate to what we call commissioning of Antarctic Provider. So basically our support vessel. Typically, we see that it takes three times or three years from when you take delivery of a new vessel until you have kinda optimized it, discovered all the mistakes from the shipyard, and have a vessel that works as intended. And during the spring of 2023, we had one of those type of incidents where we had to do some maintenance ad hoc. It was basically the engine that had a production error from the supplier, and we had to do some changes of some parts mid-season. And as a result, our vessels could not be offloaded during some days in April, May.
As a result, 34 days of harvesting in totality between the three vessels were lost. Then if you look at the total, or average, production per vessel in that period, that was close to 4,000 tons of product missed through that incident. Then we lost 85 days on that shipyard situation I just talked about, compared to what we originally had planned, which is another 5,000 tons of product missed. When you add that all up, you come to a normal season of close to 60,000 tons for the year. And hopefully, you know, these type of commissioning situations we now saw on provider is now behind us.
And we have also now initiated a couple of initiatives to make sure that we can have better control of the timing of our shipyard going forward. First of all, we have changed the schedule now, so we will not have two vessels at five-year class at the same time again. And we also have improved our planning process and also optimized the organization related to shipyard operations. Few more details about the drone. So the way it works is that we have, over the last years, built a big data, machine learning, artificial intelligence model, different names for the same thing.
But it's basically a model where we have put in all our historical catch data, all our historical sonar data, added in all the available external sources, such as weather data, currents, temperatures, satellite images, and then built a predictive model that predicts where is the krill at any given time. And then that model tells where the drone should go, and you can see it on the map on the left side. Those red hotspots is where the model expects to have high content of krill. The drone will go to that area, verify that the krill is actually there, and then the fleet will move accordingly. And as mentioned earlier, four or five times already this year, we have made moves of our vessels on the basis of krill findings from the drone.
We're already very early in the season, seeing good results from this. Moving over to the QRILL segment. Another strong year behind us for the QRILL business. 21% growth year-over-year for the full year. The fourth quarter on par or actually a little bit down compared to fourth quarter last year, but that is according to plan. For the full year of 2023, we have sold quite significantly more than what we have produced. We have also lifted prices coming in to 2024 on the back of good demand and general favorable market environments for our type of products. We see a continued undersupply of marine ingredients into the agriculture sector, continuing to put pressure on pricing for other commodities and also driving demand for our product.
Wanted to touch a bit more on pricing, which is the key driver for value creation in this segment going forward. You can see here that in the second half here, illustrated with the actual pricing in the fourth quarter on the left side, you see that we have lifted prices 5% compared to 2022. And you can say that, okay, maybe that is not such a great price increase given what's happened around us. But I think there's two things worth noticing. Number one is that over the last two years, we have increased volumes in the market by 43%. So that is a significant expansion of the market, and to be able to do that and at the same time lift prices the way we have done the two last year, is actually pretty good.
And secondly, we have a strategy not to become a volatile commodity that goes up and down together with other type of commodities. We are focusing on driving long-term value in our product with the customers that will use our product because they see the value the product provides to their farm. So our strategy has been always to decouple the pricing of our ingredient to the other marine ingredients. And to the right side on the slide, you can actually see that development. So the blue line represents the price development for our ingredient, while the darker blue or gray at the bottom is the price development for fishmeal, which is normal substitute for our product. And as you can see, if the fishmeal price goes up or down, we nevertheless continue to drive prices up. And that will continue to be our strategy.
As a result, you will not see these kinda big spikes up when commodity prices goes up, but you will also not see the prices coming down when commodity prices comes down. For the human health Superba business, fourth quarter landed at 11% growth. I had higher expectations for the fourth quarter for Superba, so a little bit disappointing for me, the result of the fourth quarter. But the underlying performance with the customers, the underlying activity in the different regions, is still very good. And we can see that represented by the 36% growth we see for this segment for the full year.
I think that really demonstrates that the turnaround plan that we launched in 2021 has now actually worked, and we have turned around the Superba segment back into growth mode. We also announced at the end of the fourth quarter that we had secured a contract for algae omega-3 products produced out of Houston, and that we had built up production capacity in the Houston plant, utilizing the cost synergies from our Superba production. So we have now 100 tons of production capacity in Houston, and we have sold out that 100-ton capacity for the next 12 months. The first 4 tons was produced in the fourth quarter and sold to customers.
On the back of that, contract, basically filling up all our capacity, we made a decision to increase the algae omega-3 capacity in Houston more than 5x , and that project is now underway. And we plan to become, one of the leaders in the algae omega-3 space, utilizing the synergies from the cost base in Houston and also the synergies from our global footprint with customers, sales, marketing, and R&D. In 2024, Houston will finally come back into full production. We have now taken the inventory levels down to the level they should be at, and basically, we will produce two sales. That means that we will have significant more product to divide the Houston cost on, and as a result, cost of goods will drop, and margins will increase as we roll this inventory into the existing inventory.
So you will see a gradual improvement throughout 2024 on the margin side. When it comes to brands, Lang continued to deliver well, 11% growth in the fourth quarter, 14% growth for the full year, 2023, driven both by successful launch of new categories, but general good performance across the Lang business. We have good cost control in Lang. So as we grow, our EBITDA margin continue to improve, delivering an operational leverage on the EBITDA. On the Epion or Kori side, as reported earlier, we lost distribution in Costco, which was the major and the biggest customer we had for Kori in the U.S. That is significantly impacting our numbers now in the fourth quarter. But that being said, the rest of the customers are developing well.
We have 27% growth year-over-year in points of sale, and we have also initiated an internationalization strategy for Kori, where we seek licensing partners abroad to take Kori to other markets. Which means we will not set up our own operation, but rather have local partners that will pay royalties and do the work for us. We landed the first contract in Japan, actually with Costco. You know, that we, for now, are out for the US, but we're now entering Japan, which is the Costco's largest market outside of the US.
So with that, I will give the word to CFO, Katrine Klaveness, that will take you through the numbers.
Good morning. I will take you through the financial figures for Q4. Q4 marked the end of a year with a strong top-line growth, but with the last quarter coming in a bit on the soft side. Revenue for the quarter was $82.9 million, up from $79 million, or 5% from same quarter last year, mainly driven by increased Superba sales and increased sales in Lang Pharma Nutrition. The group showed a lower gross margin in the quarter of 32%, down from 40%, same compared to same period last year. The ingredient segment reported an increase in gross profits, but lower gross profits from brands and elimination of internal profits between the segments in the quarter resulted in a reduced gross profit for the consolidated group.
The decline in gross profit was partly compensated by the discontinuation of the fuel hedge program in the quarter, booked under other income, leading to an adjusted EBITDA for the quarter of $17.7 million, down from $20.7 million, same quarter last year. The adjusted EBITDA margin was 21%, down from 26%, fourth quarter, 2022. Net debt has come down in the quarter as a result of positive cash generation, and ends the year at $365 million, down from $388 million last quarter, but is up from $359 million same quarter last year, due to investments in growth projects like Lysoveta, Protein, PL+, and the algae oil production line in Houston. There are no new growth projects currently in the pipeline.
Moving over to the ingredient segment. Revenue in the ingredient segment ended at $55 million for the quarter, slightly up from $53 million compared to same quarter last year. The increase is driven by higher sale of Superba krill oil, while QRILL Aqua had somewhat lower volume in the quarter, partly offset by high prices. That was up 5% compared to same quarter last year. This is an achievement, given the 23% growth in sales volume for the full year of almost 10,000 more tons of QRILL Aqua sold. Gross margin for the segment was 41% and on par with same quarter last year. Increased profit for the Superba category, with lower unit cost from ramp up in the Houston production, is affecting the gross profit positively. However, this was offset by lower gross profits from the krill category due to high fuel prices throughout the entire year.
Adjusted EBITDA was $19 million in the quarter, up from $16 million, same period last year. The increase is related to the discontinuation of the hedge program, where the company has sold off all remaining fuel contracts. The fair value amount is booked under other income. Adjusted EBITDA margin ended up at 35% up from 31% same period last year. A short note on the fuel cost development. Historically, the regional spread between the Rotterdam Index and the local prices in the South Atlantic has been between $175-$200 per ton. The company decided in 2020 to secure the fuel prices towards the underlying spot price, as this made up the majority of our fuel costs. Since mid-2023, regional spread has increased significantly and have been temporarily above $600 per ton at--[audio distortion]
At certain times during the last 12 months. This has resulted in increased fuel cost for the company of around $10 million in 2023, making the fuel hedge much less effective. As a result of this, combined with the decision to initiate a strategic review for the feed ingredient segment, it was decided to discontinue the hedging program and sell off the remaining 2024 contracts end of 2023. Going forward, we expect the spread to normalize somewhat, but still be above historical levels. As a result, we expect fuel prices for 2024 to be on par with 2023. Moving over to the brand segment. In the brand segment, revenue was marginally up compared to same quarter last year, as Lang was successful with its new introduction and distribution of the multivitamin gummy, and showed 11% growth in revenue quarter-over-quarter.
Epion, on the other hand, showed lower sales as they lost nationwide distribution with a major retailer mid-2023. However, adjusted for retail distribution or number of doors, Epion shows POS sales growth, POS growth in the quarter compared to Q4 2022. Gross margin for the segment was 20%, down from 29% same quarter, same period last year. Both Lang and Epion had declining gross margins due to product and customer mix. In addition, certain inventory adjustments were done in the brand segment, lowering the margin. Adjusted EBITDA for the quarter was marginally negative, down from $2.2 million and 7% margin, same quarter last year.
This is driven by the above-mentioned decline in gross profits, in addition to high marketing spend of $1.1 million for Epion in the quarter, partly compensated by lower SG&A in Lang, resulting in an all-time high adjusted EBITDA margin of 12% for Lang in the quarter. A few comments to the P&L. SG&A should be adjusted for non-recurring cost of $5.8 million in the quarter, indicating that the underlying SG&A has improved compared to same quarter last year, despite higher sales and shipment activity. For the full year, SG&A is significantly down compared to last year, adjusting for non-recurring costs. This is a result of the improvement programs. Depreciation in the quarter is higher as it includes the protein plant in Ski. Other income includes the termination of the fuel hedge program, as previously explained.
Net financial items are up due to higher interest rates and inclusion of the AION loss. Tax expense reflects the recognition of a deferred tax asset that is now booked in feed ingredients as a result of the restructuring into separate segments. Adjustments for the quarter mainly relates to the restructuring and other preparations for the strategic review. For the full year, $5 million of the adjustment relates to the improvement programs, including severance packages, and $6 million relates to the restructuring program. Moving on to the balance sheet. Property, plant, and equipment is up due to the protein plant and shipyard cost in the quarter. Also, with the new offshore costing approach in feed ingredients, additional offshore maintenance cost is also allocated to PPE in the quarter.
This is further described in the quarterly report, but the aim is to better match profit with periods of high operational activity and sales. In short, all offshore costs in a normal maintenance period of two months during Q4 is now allocated to PP&E and depreciated over the following 10 months. The deferred tax assets of $25 million is included, as discussed for the P&L. AION is now moved from equity accounted investment to held for sale. Inventories are slightly up. The Superba oil inventory is down 440 tons last 12 months, while certain non-product inventory has now been moved from prepaid expenses to inventory, such as fuel stock and packaging material. This is partly then increasing inventory year-end of 2023. Termination of the hedging program affects derivative asset item.
Accounts payable are up, as we have now implemented 60 days payment terms for most of our suppliers. Equity ratio leaves the year at 44%. Finally, the cash flow. We had positive cash flow from operations at $47.3 million for the quarter, driven by a solid change in working capital, with higher payables and lower receivables. Cash flow from investments of $24.2 million is a result of shipyard and final payments for the protein plant, as well as Houston projects, including the algae oil production line. Cash flow from financing activities, negative of $14.4 million, due to installments under the ECA facility for Antarctic Endurance and lower draw under the overdraft facility.
Net, net cash flow in the quarter was $8.8 million, ending the quarter and year with $27.5 million in group cash. That concludes the financial section, and I will hand the word back to Matts.
Yes. So, you have probably seen that we have announced the initiation of a strategic review of the feed ingredient business earlier today. So I'm gonna say a few words about that. But before I go there, I just wanna repeat a few things about the restructuring that went live beginning with January this year. We have now divided Aker BioMarine into four distinct businesses. They have their own dynamics, their own markets, their own strategies and plans, with separate leadership and organization, with its own P&L and accountability, and separate strategies. We have also divided up our ERP systems, our inventories, to reflect this structure.
So the first business unit to the left is the feed ingredient business, which is our harvesting operation, our logistical operation out of Montevideo, and our whole QRILL business, including R&D, marketing, regulatory, and supply chain. That generated in 2023, $156 million of revenue. The second business is the human health ingredient business, where we are buying about 10% of the production from feed ingredient that we're further refining in our Houston factory. And in this asset sits the Houston factory, all our Superba business, or all our PL+, Lysoveta, algae business, everything related to what we do in Houston, and the markets and R&D and businesses globally connected to that. In 2023, that generated $84 million of revenue.
The third business unit is the consumer health product division, which is the former Lang. They will also buy certain amount of oil from the human health ingredient side, and then sell that into the major retail channels together with other type of products. They generated $122 million of revenue. All of those businesses have a very clear path, are cash positive, and are addressing their respective markets. Then the fourth business is our emerging business unit, where we have gathered all our kind of early phase companies that are currently not profit-making. And the goal in this division is to turn those businesses into profitability as soon as possible, and also seek partnerships to accelerate that, and also visualize the value that sits in those assets.
And what we then have announced today is to initiate a strategic review of the feed ingredient side of business, the left side that you can see on this slide. So some more details on that business. So if you look at the columns to the left, you can see the performance for this division over the last years. And looking at them at the 2023 column, you can recognize the $156 million of revenue on top of the column. In 2023, that business generated $49 million of what we call cash EBITDA. Cash EBITDA is the EBITDA adjusted for the inventory adjustments, the lagging effects from all activities in the inventory. And it reflects the underlying cash flow from that business.
If you then take the sales volumes we had in 2023, and then you adjust for the current pricing we have implemented coming into 2024, as well as adjusting for inflation in cost, you will see that the current run rate EBITDA for that business is $57 million of EBITDA. To the right, you can see the sensitivity of how this business will develop as we're able to drive prices up and improve harvesting efficiency. So for instance, looking at the current run rate in the middle of that table, going to the right, increasing prices of 5% will generate additional $8 million of EBITDA. Similarly, if we are able to squeeze out 5,000 tons of extra product produced on board those vessels, that will generate $12 million extra of EBITDA.
So that is the business that we have now initiated a strategic review on. Now, moving into outlook. For the feed ingredient side, we continue to see positive underlying undersupply of marine ingredients. That will drive demand and support pricing for our products going forward. We also see a favorable development in product mix, where we sell more of the ingredients we sell to our sister company, Human Health Ingredient, as well as higher volumes in the pet segment. And as reported today, we have a good start of 2024, with the help of new technology, and hopefully that will also continue throughout the year. On the Human Health Ingredient side, we are piggybacking on the general increase in consumer spending on health and nutrition products, and the general increasing focus on omega-3s, both with among consumers and governments.
We expect to continue to grow with that positive development in the market and continue to capture market share in the global omega-3 market. We expect majority of our growth to come in the second half of 2024, both as Korea ramps up and as a result of the normal seasonality that we see in the Chinese market. As also mentioned, Houston is coming back into full production in 2024, driving down the cost of goods and the margins up. On the consumer health product side, we will piggyback on those same positive trends when it comes to consumer spending on health and nutrition products, but also the fact that retailers are increasingly focusing on their private label product, as that is their tool to combat e-commerce competition.
We expect stable gross margins for Lang, or consumer health products, during 2024, with some fluctuations quarter to quarter due to product and customer mix. For emerging businesses, we focus on turning those businesses into profitability as soon as possible, and we're also now seeking partnerships for how we can accelerate that and also visualize the value that sits in those businesses. Starting first quarter, this year, we will now, we will then start to report according to those four segments separately.
So that ends our presentation, today, and we will now move into a Q&A session, where you can send your question into ir@akerbiomarine.com, and then we will answer it here now.
Okay, thanks. Then over to the Q&A session. So, there's a question here on algae business, Matts. Maybe you can say something about the potential for algae and why you have entered that new market.
Yeah. So if you start about why we have entered the market, first of all, we are able to utilize the existing infrastructure that we have in Houston and the existing staff and utilities. So we have a very limited marginal cost related to starting producing these type of algae-based omega-3s. That means that we have a cost advantage compared to rest of the competition in this space. Secondly, the customer base we have and the sales force we have globally selling krill oil omega-3s is basically addressing the same markets and the same customers as you would do with an algae-based omega-3 product. So we're getting significant synergies from our strong global sales force. So that is the background for entering into the space.
When it comes to the potential, the global market for dietary supplement omega-3 from algae today is around 1,250 tons. With 100 tons, we are already a significant player, but this market is expected to grow significantly as we have seen fish oil supply becoming limited and fish oil prices becoming much more expensive, and algae can be a good substitute as the fish oil product becomes basically too expensive. So we are quite excited about that development. In a couple of months, we will launch the brands, the webpage, all the collaterals, and start our kind of global outreach in this market.
Thanks. And then, staying on the human side of the business, so could you say something about development of Superba in Korea?
Yes. So, we launched in September last year in Korea. The development is slower than what we saw last time, and the main reason for that is, even if we have these pre-approved claims from the Korean government, every TV ad, everything you say on TV or in advertising, needs to be pre-approved also by the government. They have a quite efficient process around that, so they basically kind of handle it in 10 days. But that means that every single change you want to do to optimize your communication, need to go through that 10-day cycle, with that kind of approval body. So through that, the optimization goes much slower. But that being said, the home shopping channels, the customers in Korea, quite excited about what they see.
and believe that we can come back into kind of all levels, but it will take some time to build. Also, we'd like to mention also there is a second claim on its way for approval by the Korean government. That will also further strengthen the kind of position of the product, and we hope to get that approved in the coming quarter months.
So I'm just gonna repeat that you can send questions to ir@akerbiomarine.com. A question on the feed business: could you say something about the marine ingredient market and why you believe this is a strategic resource in that market? 'Cause you, you say something about that in the outlook they referred to.
Yes. Basically, the short story is that the aquaculture industry has been growing 4%-5%, you know, for many, many, many years now. They are dependent on marine ingredients for the fish to have good welfare and survive and perform well in the farms. So you should expect that the demand from aquaculture has been growing for marine ingredients in the aquaculture segment have been growing 4%-5% over the last, you know, 20-20 years, but it hasn't. And the reason for that is that the aquaculture industry has optimized the diets of the fish. They have reduced the inclusion of marine ingredients all the way from 90% back in the 1990s down to 22% in 2020.
But they have hit a floor in 2020, where they can't take it further down, and it looks like it needs to be further actually increased from that level. Which means starting in 2020, the demand for marine ingredients from aquaculture industry started to increase, while the availability of marine ingredients, which comes from wild fisheries, is flat. And that means that already in three-four years ago, that gap started to build up, and as a result, prices goes up and it becomes much more important now for farmers, for feed producers and others to secure access to these type of valuable nutrients for their business.
So we have received no further questions, so maybe just leave the line open for a few more seconds.
With that, we conclude today's session, and see you next quarter. Bye.