Good morning, ladies and gentlemen, and welcome to the first quarter presentation of AKVA Group. The agenda of this morning is that I will do the introduction and the highlights. Ronny Meinkøhn, the CFO, will do the financial performance, and after that, we will do a Q&A session. So please post any questions during the presentation, and our moderator will read your question during the Q&A. Okay, let's go straight to the highlights for the first quarter of 2024. Revenue of NOK 784 million and EBIT of NOK 20 million. Very strong order intake in Sea Based of NOK 800 million, but still slow market in Land Based. We got awarded of three new barges for the Nordic market, with a total contract value of approx NOK 160 million.
And this is, of course, very welcome because it's a, it's a little signal of more, willingness to invest in the Nordic market, and in context, we didn't sell any barges last year. Also, strong focus to further develop and improve implementation of deep farming concepts. First, about the numbers. Revenue of NOK 784 million in the first quarter. This is on the back of, as you can see, it's a decrease from a year ago, and this is on, on the back of very low activity level in Land Based, as informed earlier, NOK 90 million lower than a year ago.
Also, if you look at the quality of the earning or the activity within the quarter, I can inform you that we had a very slow start of the first quarter on the back of some low orders, but we had a very strong closing in the last five, six months within the quarter. And that means that we have a pretty strong momentum into the second quarter, which is good to notice. EBITDA came in at NOK 67 million. Sea Based good at NOK 64 million, Digital at NOK 6 million, and Land Based at -NOK 3 million on the back of low activity. EBIT at NOK 20 million, which is a little improvement from a year ago. Order intake NOK 917 million.
Sea Based, very strong at NOK 800 million, also including the 3 barges, as mentioned. Land Based at NOK 72 million and Digital at NOK 45 million. Order backlog at NOK 2.6 billion, which is representing a fair level. Also good to notice a nice increase within Sea Based. Then, to the strategic and operational status. First of all, if you follow this industry very closely, you have seen that the supply side, the supply of Atlantic salmon is under pressure these days and has been a bit like that for the last couple of years. We haven't seen growth for Atlantic salmon in the last couple of years, and this is due to biology and fish health. And of course, the consequence of that is a very strong salmon price, which is expected to continue.
The market, as such, gives a lot of room for growth in the next five, 10 years. That's very clear. The big question mark is how and where that's gonna happen. It's gonna be exciting to follow that development. This is our innovation agenda for our Sea Based solution, our products on marine infrastructure, precision feeding, and deep farming. Deep farming is still progressing well within AKVA Group. Most of you know the concept now, but in the middle, you have the cage, which is, let's say 30 meters below or under the surface, and then with a ceiling, a roof 30 meters underneath.
And the yellow thing in the middle is the air dome to the left, which is representing one of the significant or important innovations in order to launch this or realize this deep farming concept. And the other important innovation were about waterborne feeding, and the Digital support is also important. With our pioneering customers in Sinkaberg Hansen, which has almost like 10 years of experience now, they have seen very good biological results from the farm sites during 2023. And I saw a news this morning where they are saying they basically want to have all their production, the entire production, in a protected environment where deep farming is the main thing.
They see high superiority, very moderate mortality, and still, with all the cages we have, I think it's gonna soon be close to 100 cages, not sites, still, there have been no sea lice treatments in the deep water production. You see it from time to time, some sea lice, but it's at a low level, so it doesn't require any delousing. As earlier announced, we had a commercial breakthrough during 2023, also with customers like Lerøy and SalMar. The new kid on the block is low-emission farming. This is a new concept, a solution developed by AKVA.
We think this is first and foremost relevant for the Chilean marketplace, because in the Chilean marketplace, you are almost close to 100% off grid, meaning that you do not have access to electricity from the land. The concept is that you have a floating solar panel. We have got the exclusivity on selling this in Chile from our partner. And you put a floating solar panel into a plastic cage and surrounded by a pretty high fence to avoid the sea lion to jump into this wonderful sea bed.
This, together with the hybrid battery, we have many of those installations in the Norwegian marketplace, more than 60, also combined with waterborne feeding and a complete control system that enable you to cut back on the diesel consumption, because today they get energy in Chile from using diesel and diesel generators. And if you bring it all together, including the waterborne feeding, you should be able to cut back energy consumption or diesel consumption here with up to 80%. So we think this is very relevant for the Chilean marketplace. Many of the farmers there, they have very ambitious 20, 30 CO₂ reduction targets. And the most realistic way to reduce the CO₂ emission is by cutting back on the diesel consumption.
So this will reduce both fuel, and it will reduce significantly the CO₂. The status here is that we are in the midst of our commercialization. We have launched this, a month ago at AquaSur, the trade fair in Chile, and we are now busy with customer meetings. So it's still very early days, but we are at the brink to commercialize this new concept. I'm excited about that. With regards to our Digital solutions, we have AKVA Observe, the company we own, 32% of, based in London. It's about automated feeding based on AI, artificial intelligence, and machine learning, also based on a recurring business model. Currently, we have 106 sites on this business model. AKVA FishTalk, that's the fish ERP system.
It's about planning and control, also on a recurring business model, and there we have a global market share of 60%. AKVA Connect, we are now at 359 modules worldwide on a recurring business model. It's about steering and control and bringing hardware and software together. And here, the new kid on the block is AKVA Submerge. There we have 23 cameras installed around the world. So this brings automated sea lice counting, also approved by the authorities, and also biomass estimation. The post-smolt RAS concept, we think, is very much validated. Proof of concept is really there, and there we see from farmers being successful with a post-smolt strategy. There are significant benefits from applying that one.
Reduced time in the sea means less sea lice treatment, very relevant, and improved fish health. And also it comes, depending on the size of the smolt, it comes with a better utilization of the licenses, let's say up to 30%, depending on the size of the smolt. We still find the post-smolt market in Norway is slow. Last week, I was in Barcelona on the big seafood expo.
Spoke with many of the Norwegian salmon farmers and the owners, and they, they are still very reluctant to, to make, big investment decisions, because as they're saying, "We, we don't even know the tax we are gonna pay." So, so we, we, we think we will, we, we will earliest see a, a, a recovery with, at least some of the farmers we we expect to make, decisions in second half of 2024. But, but in the meantime, we, we are working actively and have a, a, a good pipeline there. Also, over the years, we have been delivering, smaller and, and bigger, installations when it comes to reuse. Reuse is, is, is more, more like a flow-through system, without a biofilter, for instance.
We are now refocusing on that one, and we have signed, very happy about that. We have signed a first contract with Laxey in Iceland. Laxey has very high ambitions, as you can see here on the illustration, which is a picture from them. And this is, and they are located at Westman Islands of Iceland. You can see here in third bullet point, our scope of work. Just to be clear, this is an order we got in April this year, so it's gonna be order intake in the second quarter. The ambition of Laxey is very high. They recently got financing to for a good start here, but the long-term aim is 27,000 tons.
So we are very happy about this and excited to follow them in the years to come. Then down to China, Nordic Aqua Partners, they recently announced a very successful first harvest. Fish was big, average weight of 5.7 kilo, which is amazing in a Land Based facility. Mortality below 2% and superior share of 99%, so those are really, really excellent biological results. So very, very excited to follow this development in the months to come. But I think it's fair to say that this is getting very close or probably also finishing passing the finishing line when it comes to proof of concept based on our RAS technology for ongrowing. And that's also what we see in practice now.
We have a lot of incoming interest out of China. And China is, as you know, a very dynamic marketplace. When someone has success with something new, also like protein production, like producing a salmon on land is, it's a lot of look to Ningbo, where the site is located these days. A lot of visitors are coming to NOAP, and we expect that there will be a real ongrowing market in China, in the time to come. And our ambition is to sign a second contract with a new player within the next 12 months. And we think financing is very much doable in China as well.
So when it comes to NOAP, back to NOAP, the construction of NOAP phase one is completed early in the second quarter, as we speak now, with an annual capacity of 4,000 tons. And in this quarter, in second quarter, we will do the financial closure of the project as well. Phase two is initiated. We have delivered the first department, the hatchery there, and we are busy with design and engineering of the complete module of the 4,000 tons. However, the big activity at ground, project execution will happen more towards the end of 2024 and into 2025.
Also, please take notice that we have signed a RAS contract for phase three, which is an additional 12,000 ton, and startup of that project will be authorized by NOAP in the future. And that brings me down to the expected activity level of Land Based, total order backlog of around NOK 1.5 billion. We have earlier said that all the contracts we signed during last year, whereby NOAP phase two will start in the latter part of 2024, and the same with Cermaq, also in the second half of the year. So the conclusion here is that there will be soft activity in the first half of 2024 due to closing of old projects and the slow start of new project.
But on the positive side, project margins will improve throughout the year, and we have also a lower cost base, you know, after the right-sizing process. I also like to show you this one, and we know that there is a fight for talents in Norway, also in the region where we are operating. So we have actually spent quite some time and spent more focus on, let's say, employer branding, whatever you call it. And for the last few years, we were not even ranked on the top 30 or within the top 30 players, measured by 1,400-1,500 students. But we are very happy to notice that this year we came top 10 on attractive employers within the seafood industry.
We also take notice. We are the only supplier on the list, so very happy to see that the work is coming with some good or nice results. That brings me to the end of my part, and they are the medium-term financial targets. First, about revenue growth, the minimum 5% growth for this year, that equals NOK 3.6 billion, and underneath, no growth in Land Based. Into next year, we guide a top-line growth of a minimum 10%, whereas Sea Based, we expect 5% and Land Based on the basis of 2024, which is a low one, a minimum of 30% step-up for next year.
That is based on the order, for the most order backlog we have, and we also expect the Digital to continue on a good number. Profitability, 2024, this year, we guide on the basis of the minimum 3.6, we guide 4%-5% EBIT and a little step up next year of 6%, and then improve ROACE into next year of into 10%-15%. This is on the back of the EBIT enablers being operational excellence, the cost reduction program, which was implemented last year and is working, and the scaling of Digital and Land Based, and also the new contract management for Land Based. That brings me to the very end.
I'd like to hand over to Ronny, the CFO of the company. Please, Ronny.
Thank you, Knut. Good morning to everyone. I will provide you with some more information regarding the financial performance in this first quarter and the financial position to the company. So I'll start with the group financials and the consolidated income statement. So revenue came in at NOK 794 million in Q1, which is NOK 89 million below Q1 last year, and this reduction is all related to the Land Based business segment. EBITDA of NOK 67 million is eight million higher than Q1 last year. Depreciations and amortizations of NOK 47 million in the quarter, that's NOK 1 million lower compared to last year. However, please note that we have implemented a new depreciation profile for our Digital products, AKVA Connect and AKVA FishTalk.
So historically, we have used a five year depreciation profile, while we now have increased the profile to eight years to better reflect the underlying cash flow and also the new depreciation profile is more in line with market practice. So EBIT in Q1 of NOK 20 million, that's NOK 9 million higher than a year ago, and lastly, total finance costs of NOK 10 million in the quarter. And the positive impact we have from our investment in Nordic Aqua Partners, the increased market value is approximately NOK 20 million in Q1. So we also had a positive impact, but less impact from this investment in Q1 last year. So income before tax of NOK 10 million in Q1.
Revenue is 10% lower in Q1 compared to last year, is all related to the Land Based business, which I will come back to later in more details. Despite the slow market for post-smolt in Norway, we have a solid book-to-bill ratio of 122% the last twelve months, with an order intake close to NOK 4.01 billion, and in revenue just about NOK 3.3 billion. Q1 this year confirmed that the positive momentum with a book-to-bill ratio of 117%. 62% of the total revenue in Q1, that's related to the Nordic market. The market in Americas had an increase in revenue of 18% in Q1 compared to last year, while we see a decline in revenue in other markets.
Sea Based still the majority of the revenue, 82% in the first quarter. We have a strong reduction in revenue in Land Based of 47% this quarter compared to last year, while we continue to see a really strong revenue growth in Digital, with an increase of 37% quarter on quarter. So EBITDA margin of 8.6% in the quarter, which we consider to be okay, on the basis of a very low activity level in Land Based, and also a very slow start to the quarter in general. EBITDA margin in Sea Based was 10% in Q1, which is acceptable and supported by a sound product mix.
Also, as I have mentioned in, in previous presentations, we expect fluctuations in the EBITDA margin from, from Sea Based, depending on the product mix and also the activity level. But we believe that the 10%, that's a good estimate on the average EBITDA margin you should expect from this business going forward. Profitability in Land Based is still low, mainly due to the low activity level and partly due to closing of some of the old contracts during the quarter. And last, the rightsizing process, which we completed in Q4 last year, with NOK 45 million annual cost savings, will have full impact in 2024, which is also required to meet our financial targets.
Available cash was reduced quite significantly in the quarter of NOK 236 million, and available cash at the end of the quarter was NOK 283 million, including available credit facilities in DNB. And as I informed you during the Q4 presentation, we expected the net working capital to increase from the very low 6.2% at year-end to approximately 10% in Q1. And in fact, the net working capital increased a bit more and ended at 11.3%. That's an increase of NOK 165 million, which is mainly related to increase in accounts receivables of NOK 100 million and increase in inventory levels of NOK 53 million.
So this increase, as Knut mentioned, is related to the high activity we had in the second part of this first quarter, which is of course impacting the net working capital, but will be a good momentum to start Q2 on the basis of. So the covenant situation was a bit tight in Q1. NIBD/EBITDA covenant ended at 4.33 compared to the threshold of 4.5, and we expect the headroom to increase the coming quarters. Net interest bearing debt increased by NOK 198 million in the quarter, and the increase in net working capital, the NOK 165 million, is the big ticket in this increase. In addition, we had CapEx of NOK 50 million and NOK 20 million in new IFRS 16 liabilities.
So CapEx NOK 50 million a quarter, NOK 18 million that's related to our three innovation agendas, and the other NOK 19 million, that's related to our new global ERP system. So total CapEx for 2024 is expected to be more or less in line with last year, and the new innovation initiatives, together with this new ERP system, will make up the majority of the CapEx. And with regards to dividend, we informed you during the Q4 presentation that the company decided not to pay any dividend for the first half year, and we will make a new assessment with regards to the second half year ahead of our Q2 reporting in August. And now some more details on the three business segments, and I will start with the Sea Based Technology.
So overall, with regards to revenue, a slight decrease compared to last year of 1%, but a good increase in order intake of 30% in the same period. We are very pleased with the award of the three new barges for the Nordic market, which are all included in the order intake in Q1. EBITDA margin of 10% in the quarter, compared to 8.5% in Q1 last year, and the improved profitability is partly due to the product mix, but also due to the right-sizing process, which we completed in Q4 last year. Nordic region, the revenue is more or less in line with last year, but we have this strong increase in order intake, the 71%, which is mainly related to the three barges.
In Americas, we have 24% higher revenue. Our order intake is down by 12%. We still see high activity, both with regards to revenue and order intake in our company in Chile. And last, both revenue and order intake in Europe and Middle East is reduced compared to Q1 last year of 38% and 28% respectively, and this negative development, this is all related to our business in Turkey. So looking at the 12 months revenue and order intake trend, we see a positive development in order intake, and we will have a high focus to continue this development going forward, because that is what we need to get a shift in the revenue trend from the current flatliner to a more stable positive trend.
Order backlog of NOK 946 million, end of Q1, that's NOK 85 million higher than last year. OpEx-based revenue continues with a good momentum and increased by NOK 20 million or 9% compared to Q1 last year, and total OpEx-based revenue represented 37% of the total Sea Based revenue in the quarter. For Land Based, the order intake in Q1 that's mainly related to smaller contracts and also reflects some change, some variation orders on existing contracts. Very low activity level, 47% below last year, and the start-up of the new project for Cermaq and NOAP, the phase two, is slow, and we don't expect any larger impact from the two contracts until the second half this year. Meaning that the second quarter will be another quarter with somewhat soft activity level.
So the profit margin is, of course, impacted by the slow activity level and also, to some extent, by the closing of old contracts. But despite negative EBITDA, we see improvements compared to last year. We have a significant lower cost base and due to the right-sizing process, Q4 completed in Q4 last year. And we also see that project margins are gradually improving, as the impact from the old contracts is far less this year compared to last year. But we need more activity. We need more revenue to generate profit for Land Based. On the revenue and order intake trend, we now see a negative trend on the revenue, and we need both increased activity from the NOAP and the Cermaq contracts and new contracts to improve this trend.
Order backlog of NOK 1.5 billion, end of Q1, which is NOK 0.5 billion higher compared to last year. But please remember that the delivery time of this order backlog is more like two to three years, compared to the Sea Based order backlog, which typically have a delivery time of two to six months. And last, Digital. Good momentum. Order intake increased by NOK 15 million in Q1 compared to last year, and a strong growth in revenue of 37% in the same period. As I explained during the Q4, we had a temporary setback on the profitability in Q4, with an EBITDA margin of only 4%. We see positive development this quarter with an EBITDA of 17%. We still believe there are room for improvements, and we are focused to achieve that.
So the trend both on revenue and order intake for Digital is confirming the positive development for the business area. The order backlog of NOK 158 million end of Q1 is a good step up compared to the NOK 106 million in Q1 last year. That was my financial update. Thank you for your attention. Knut will now close off with the outlook and the Q&A.
Thank you very much, Ronny. Just finishing with the outlook. Yeah, salmon prices expected to remain strong, driven by reduced supply. So that means that the salmon farmers will earn money, good money, and they will have the possibility to invest in the future and growth. AKVA expect to see a normalization of the post-smolt market in Norway during the second half of 2024. But it comes with uncertainty for sure. So in the meantime, we are extremely focused on also entering into the reuse market to tap into that for full, like we explained or I explained, on the basis of the new contract with Laxey. We also see some traction with post-smolt international, both in Canada and Chile.
We expect to see a real development in China with regards to on growing in the months to come. So, for this year, we are guiding and aiming for a revenue of minimum NOK 3.6 billion , with a corresponding EBIT of 4%-5%. And also, certainly, we will continue to invest and improve on our solutions both within Sea Based, Digital, and Land Based technology. So that brings me very much to the end. So we will now open the Q&A session. So we will ask Ståle Økland, our moderator, to read any questions.
We have to start with five questions from Ola Trovatn in DNB. We can take them one at a time.
Yes.
Do you expect SinkabergHansen's decision to produce all salmon with deep farming technology from 2025 to translate into increased sales for AKVA Group in H2 2024?
We have been working on a very good way with SinkabergHansen for many years, and they have not placed any new orders for 2025 and onwards with us as of today. But our ambition and our expectation is to maintain the good collaboration and the partnership, so we certainly hope so.
You state that the profitability in Sea Based is acceptable in Q1 with EBITDA margin of 10%. What is your profitability target for this segment, and what is needed to realize it?
We think we haven't guided on targets per segment, but when we are saying 10% is acceptable, we think that there is a little potential, or there is a potential if we are able to normalize the barge business again. That will bring more activity, more turnover to Sea Based, and probably that will come with a little uplift in the EBITDA margins, because it create more activity and a higher gross margin in numbers.
Yeah, just to add some comments to that, from my side, when I said the expectations should be around 10%, of course, I meant short term, because there are absolutely possibilities to increase the EBITDA margin if you are able to increase the activity level, of course.
Yes. Mr. Ola Trovatn also has a question about the contract form with Laxey. Which contract form is used with Laxey? Is it fixed price or cost plus, and how do you view the margin risk on this contract?
It's this contract is a little mixture, some part is more on the basis of fixed with cost escalation and some part is more of the nature of cost plus. But we think... In general, we believe our contract management is on a much more sound basis than it used to be so some years ago. So I think we are pleased with the way we conduct and execute contract management these days.
Do you expect an improved EBITDA margin in Land Based in Q2 versus Q1?
No, Q2 is still pretty uncertain, I have to say. We are guiding an uplift in the second quarter, but we are closing off financially at least two projects. So that work needs to be done before we turn the page for 100% into the second half. I will say Q2 is still with some uncertainty and also low activity level, but we are rather certain that second half of the year will come with a good uplift.
Mm-hmm. And, then the last one, which is, actually two questions from, Mr. Ola Trovatn: Can you explain the drivers behind the soft EBITDA margin in Digital in Q1, despite the material step up in revenues year- on- year? And how do you expect the profitability of this segment to develop going forward?
Yeah. The temporary setback we had in Q4 last year was mainly cost-driven, so we have made some adjustment in the cost base now. But the main driver for this business is to increase the revenue even further, because we have built a team now that can manage a significant higher revenue level than we are at the moment. So we need more activity, more revenue, and the cost base will not scale in the same way, and then the EBITDA margin should be back closer to the 30%, which we had a few quarters ago.
Thank you. I don't think we have any further questions.
Okay. Just wait for another 30 seconds. So if you have any other questions, please post them as soon as possible, and we will answer. All right. If there are no other questions, thank you very much for your attention, and we wish you a nice sunny weekend.
Thank you.