Good morning and very much welcome to the second quarter financial presentation of AKVA Group. The agenda for this morning is that I will do the highlights and the outlook. Ronny Meinkøhn, the CFO, will do the financial performance, and then at the end we will conduct a Q&A session. We have some people within the audience, but also people participating virtually. Please post any questions during the presentation. Let's go straight to the highlights for the second quarter. We had a high activity level, with a revenue of NOK 907 million for the quarter, but very significantly impacted negatively by high inflation rates and cost provisions. We are gonna install a solid cost-saving program which is in process, and targets for that will be communicated as part of the Q3 reporting.
Revenue for the quarter came in at NOK 907 million, which is 9% higher than a year ago, whereby EBITDA disappointing, NOK 3 million and EBIT at -41. We need to talk a little bit about the specifics here. Overall, as I already mentioned, significantly impact by cost increases and some provisions. Three specifics to talk about. One is about high inflation rates and some supply chain restrictions, which is hampering AKVA Group, also caused by the Russia-Ukraine war and other things. Altogether that comes in with the estimated NOK 37 million in additional cost for the quarter. There are some continued uncertainties related to this, which will translate for the rest of 2022.
Some of the examples here are energy costs, exponential freight rates, and also components, all kind of components and input factors, both on the sea-based side and the land-based. Those are in situations where we don't have cost regulations or inflation-related clauses in the contracts. Talk about a few specifics there. On the sea-based business, typically we have an order horizon of three to six months. We agree a contract to deliver a pen, net, camera, feeding, and typically take three to six months to deliver. On those kind of contracts and the structure and the nature in the marketplace is that those are fixed-price contracts. You are supposed to deliver something three to six months later and you fix the price.
Whereby we haven't always fixed the cost side. We have some stock, but not sufficient. This is the dynamic in the marketplace today. We are not sure we are gonna change the dynamic in the marketplace. However, of course, we will install very strong measures to do correct repricing whenever we do and receive new orders. We have really strong measures in place to do proper repricing on new orders. There is some inherent risk related to the orders received on sea-based when you have a 3-6 months order horizon. It was a kind of severe and huge cost increase and shock we did see now in the last months.
Also the third bullet point that's related to one-time cost provision of NOK 31 million. That's within the sea-based segment, and it's related to an ongoing barge project in Canada. The context here is that it's a very old contract. It was entered into in March 2019, a frame contract with 1 Canadian farmer on 6 barges. What happened there is that over time, regulatory changes were hitting us with extra cost. Also we had issues with the kind of unqualified yard, and contract management related to that one. Now we have made full cost provisions to complete the six barges, and that came in with the NOK 31 million.
The fourth bullet point is related to land-based, where we are posting a one-time warranty and cost provisions of NOK 34 million related to some specific projects. The nature of this is cost related to old contracts. I will comment what we talk about in a minute. Also, one specific unprofitable post-smolt contract in Norway, which will be completed in 2022. Back to the old post-smolt contract in Norway, which is entered into more than three years ago. That was with fixed price, with no price regulation rights on our side. That will be completed this year.
Also the NAP contract in China, which by the way is going very well from a project execution point of view, but we see cost increases. That contract was also entered into three years ago and at a fixed price principle. What to say about that? Of course, we have changed those old practices since already a couple of years ago. Those are two specific old contracts and representing old contract practices. One will be washed out, the post-smolt contract will be washed out in 2022, and that will still translate some into 2023, till mid of 2023 with some lower gross margin. We changed those contract practices and principles.
For instance, the three post-smolt contracts entered into this year is with a lot of clauses and rights on our side to come back to back on cost increases going forward, both with regards to freight and input factors. We have way more correct and sophisticated contracts today than it used to be some years ago. This is the situation. If you summarize this for the first half, revenue came in at NOK 1,756 million, which is 30% higher than a year ago. EBITDA NOK 106 million, and EBIT at NOK 17 million. Salmon prices just very short for us because we are dependent on a healthy salmon price for our customers to invest in equipment and infrastructure because it sits on their CapEx budget.
If we have a healthy salmon price, you have a pretty good momentum in our marketplace. Salmon price is coming down. Forward prices going forward is still on a healthy basis. We expect that this is, even though cost is coming up, we know that, but still we expect that it's gonna be a healthy market for technology going forward. That's how we read this. Order intake was reasonable at NOK 827 million. Also, right after closing the quarter, we landed a land-based or post-smolt contract, I should say, with Cooke Aquaculture at NOK 140 million, which came early July.
First half in combination was one billion eight hundred and seventy-five, and we had a turnover in the first half of 1,756. Order inflow is seven percent higher than the turnover. Order backlog sits at 1.8 billion. Looking at our strategic and operational agenda. First of all, we are of course optimistic with regards to the outlook over the next ten years. We believe that demand is generally gonna be higher than supply as a trend in the coming years, which calls for new technology development either in on the sea-based side, including offshore, but also land-based on-growing going forward in the long run. That's how we see the market.
The market is there, very good potential for technology, digital solutions which we are providing. Let's focus for a few minutes specifically on land-based. We basically cluster land-based into or divide it into three type of segments. It's the traditional smolt, and I'm focused on the technology, as you can understand. You have technology or smolt facilities for the normal smolt size. The second box, and that's a rather stable market. Then you have post-smolt, which is about growing fish on land to size between 350-1,000 gram. We think there are really proof of concept with regards to post-smolt.
We think that's a very safe bet for the fish farmers to realize growth and to utilize your MAB, your maximum allowed biomass and your licenses in a better way. We are focusing a lot now on the post-smolt market in order to drive growth for AKVA Group. In the recent months, we landed three new contracts, one with Mowi, one with Cooke Aquaculture, and one with Tytlandsvik Aqua, equal to NOK 400 million. We have a lot of focus on post-smolt going forward. We believe that over the next 10 years or so, that it will need to be invested something like capacity, production capacity, technology from companies like AKVA equal to 300,000 tons over the next 10 years.
That is a market of a minimum of NOK 30 billion just on the RAS. NOK 30 billion, not just on the RAS technology side. If you do that quick and dirty, you can say there is a market size of NOK 3 billion a year. That is a very meaningful market. With regards to on-growing or growth, we think that the fundamentals is really there on the back of the demand growth over the next 10 years. Let's be clear, there are some headwinds these days with regards to ability to finance projects. Some projects will be financed and some will not. It's about picking the winners. That's the trick. I think on-growing over time is gonna be part of the solution. This is our strategy and innovation agenda for land-based.
Until a couple of years ago, we only focused on box number one, which is about the technology as such, the RAS technology. In my view, AKVA was not focused enough on the science behind, so we have staffed up with around 10 people to drive trials, documentation, and further improve the core technology we have. Even though the technology is really proven, for instance, the example is Tytlandsvik. I'm gonna talk specifically about that. More work needs to be done on the base and the core RAS technology, so we have an innovation agenda for that. The second box is that we were, as I said, only focusing on box one, so we have now started focus on feeding, fish handling, camera, lights, sensors, control system.
We have now developed a feeding solution also for the large on-growing, and we will deliver that feeding solution and install it in China for the NAP project, the NAP project in China. That is already being commercialized, so we can be a more complete supplier than we used to be. Also, on the fish handling, we didn't do that. We only did the core RAS. Also there we have developed the solutions which is at the brink to be commercialized. All what it takes to run the farm, the camera, the lights, the sensors, and also linked to the digital and the steering, also there we are using a lot of resources in order to have a complete solution there as well.
Also, box number four is important. That's about having biological competencies inside AKVA Group. We didn't use to have that. We have now hired a few good people, which is bringing that to the table. People even with Ph.D.s background on either RAS or fish health. We are more equipped to support either the post-smolt customer or the on-growing customers with the startups with the protocols and troubleshooting, which also happen from time to time. In my view, we have a rather complete setup here. We are really investing and building our capabilities with regards to land-based. Of course, it comes with a cost short term, but we will harvest in the coming years. I'm pretty convinced about that.
Just, I'm saying that post-smolt is from a technology standpoint very much proven. That's what I believe. This is a picture from Tytlandsvik. I think that's the largest post-smolt facility. I'm not sure. This year they will produce 4,500 tons of large post-smolt, up to one kilo, so it's a large facility. AKVA has delivered the technology. Last year they produced 3,000 tons of fish at average 750 g. They did with 0.87 in FCR, feed conversion rate, and mortality below 1%. They are extremely good biological results. That's compared with the sea, seaside. This is another league.
Grieg hosted their capital market day just before the summer, because they are the customer of Tytlandsvik, so they are using this post-smolt in Rogaland for the most. Rogaland has been a bit of a troublesome area for many farmers. The fish coming out of this site, once again, average 750 gram, went very well in the sea. 8-9 months in the sea to harvest and no sea lice treatment. We believe there is a lot of merit in post-smolt and fortunately, our technology is very much proven to work, and it has been stable. That brings me very much to the summary of land-based and our operational agenda, our focus there going forward.
We see a significant growth potential in the post-smolt market, first and foremost Norway, but also in other regions, like, for instance, the recent contract with Cooke in Canada. On-growing has also great potential over some time. We have proof of concept with regards to AKVA technology, and we are ourselves investing a lot in our innovation agenda, the four boxes, to have a complete value proposition. We have changed contract terms, not because of the last shakeout. We did that already a couple of years ago when I started in the company. The new contracts are more robust than it used to be. It still take a little time with one contract till end of this year.
NAP will be with some lower margin because of no right to increase costs into next year. But all the other contracts is on a healthy basis. We are investing in people and improving project execution capabilities. Over the next few months, we will do a hard review on our land-based organization and setup, and we see potential for improving and drive out significant cost savings. We're gonna report on that as part of the Q3 reporting. To the sea-based agenda. This is our innovation agenda for sea-based. The traditional one is in the first box, marine infrastructure. That's about plastic and steel pens, nets, moorings, net cleaning services where AKVA has basically a pretty strong market position in all those product categories.
Precision feeding, which is about the barges, the feed systems, the camera, and the digital solutions, which is box three coming. I will explain a little bit more on the digital in a few minutes. Also deep farming. Deep farming is, we believe, there are several new technology developments. You see offshore, you see semi-closed, closed within the fjord systems. You cannot basically focus on everything at the same time. I think that's impossible for one company. With quite some of our focus for the time being is about deep farming to bring the fish 20-30 m below the surface and below the normal sea lice belt. By then driving better fish health and less sea lice treatment.
We have now a pilot. It's not a pilot anymore because it's commercialized with the farmer SinkabergHansen in mid of Norway. We have now delivered 26 cages of Nautilus. They have been in production now for plus minus a year. That's the picture to the left here. You bring the fish 20-30 m underneath the surface, and the yellow one, the yellow thing is an air dome which provide oxygen to the fish. By then you keep the fish at that level and that depth throughout the whole production. The first generation is harvested now in the Rørvik area with very good results and no sea lice treatment for that site.
That's probably the first one in that area for probably 20 years. This fall, a lot of new harvest will take place and we cannot promise anything, but we are excited to see the results of that and we have quite some good interest for this product and this technology. That's a potential. Our operational agenda for sea based is very much on the demand side. We believe that the demand for technology and solution will outpace the growth in salmon production.
If you from one year to another see a growth of salmon production of 5%, which is almost a bit high these days, but then typically you will see a ballpark 10% on the technology side, because there is some overinvestment in new technology. People are modernizing, people are investing in digital, and automation, et cetera, et cetera. There is a higher growth in the space of technology than in the number of heads, the biomass. Depending on what the biomass will be from one year to another, we expect our top line to be, and the total market for technology to be in the range of 5%-10%, depending on the biomass or the salmon volume from one year to another.
We see more and more that the market is demanding solutions where hardware or technology and software are integrated. That's why we have built up a huge digital team with 120 people. With regards to our commercial agenda, we do a continuous repricing of customer quotations to reflect the inflation and inflationary environment going on. ESG considerations are being implemented in our innovation agenda, certainly. I mentioned the hit in Canada on the barge business. We have decided we will take less risk. We will have less risk appetite for our barge business going forward. Also, because generally it's less profitable than for other technology.
Also for sea based, we see a potential for driving a significant cost saving program in the months to come. The third one, final one is about our digital agenda. We seriously believe that the future is about going digital. Radical changes are needed to meet the increasing demand for sustainable seafood. We are developing. I said we have 120 people in our digital organization. We are focusing on digital solutions for both land based and sea based. The three trends we see which we are building our solutions around that is about remote operations, centralized feeding, for instance, precision fish farming and business ecosystem.
We have with our board and main owners, we have approved a three year plan to drive a credible digital agenda, innovation agenda. We are investing NOK 30 million-NOK 40 million annually to drive this innovation agenda. This is basically our three main product platforms, AKVA Observe. We are owning one third of a London-based artificial intelligence company. It's called Observe, and they are working exclusively for AKVA. We have the face to the market, AKVA, and they have the programmers. There are around 25 people there, sitting there in London where you have access to talents. We don't have the same type of access to talents in the Stavanger regions where we are operating.
That's why we have done this investment in this AI company in London. This is something which is already working commercially. AKVA Observe is already installed on 53 sites around the world in all the four or five salmon farming regions. Fifty-three. The business model is based on a digital subscription model. That's a new but attractive business model for AKVA Group. AKVA Fishtalk. That's the kind of ERP system for the fish. That's about the biological control production planning, et cetera. There we have 60% market share globally, so six out of ten salmon are on our platform, Fishtalk.
AKVA Connect, that's the steering system for the technology, bringing the technology and the software together. Also there, we had a wrong business model there because it was basically given away as part of the feeding and the cameras, but that is leading to less innovation and not the best service level. Now we have also introduced a subscription pricing model there as well, and we are investing and we have very good momentum on this new business model with good traction with customers. It's being commercialized. Overall, as I said, we have a complete new digital organization since 18 months ago. New leadership, clever people came in all together with 25 people in London, 120 people.
I think, okay, if you compare with the large digital companies outside the sector, this is nothing. Within aquaculture or more specifically salmon farming, I think there are no one else with an organization of 120 people. I think that's a credible investment we are making there. To the benefit of investors, we are now issuing medium-term targets. We had a financial guidance which was issued two years ago, but it became a bit unclear what was really the target. We are now sharpening the targets, so you can more easily understand what we are guiding.
On the top-line growth, I said sea-based 5%-10% for that segment. We see more of an exponential growth in land-based and digital. When you bring the three parts together, we are sure we can drive a top-line growth of minimum 10% year-on-year in the years to come. For 2024, that should translate into a minimum of 4 billion NOK turnover. We still have a prudent view on land-based for 2024 because we have not taken any new ongrowing contracts into consideration when we make the minimum 4 billion target. We are banking on a phase two of NAP because we certainly believe that will happen. For the rest it's post-smolt.
If we have new ongoing contracts in the months and the year to come, we should come in a bit higher, quite some higher than the NOK 4 billion. We feel confident about the NOK 4 billion target. Operational excellence, cost saving programs will be in place and when we have done our in 2024, we have only new contracts. We have been driving out cost efficiency. We are guiding on our EBIT target of minimum 8%. ROACE will at that point in time come in at minimum 15%. That's our target. This is one year later than we talked about two years ago, but we have seen quite some headwinds. We are not reducing the ambition level.
We are just saying we are running one year late. We think that there is a huge possibility for scaling up also after 2024. Innovation agenda will not be harmed by any cost saving measures. We have stepped up already quite a bit compared with earlier, and that is there to stay, including the three digital platforms, AKVA Connect, AKVA Observe and Fishtalk. That is my part of the presentation. Ronny, you go a bit more into the detailed financials. Please, Ronny.
Thank you, Knut, and good morning to everyone. I will give you some more details on the financial performance during the quarter and also on the financial position.
To the company. We will start with the consolidated income statement. We are of course satisfied to have this record high activity level in the quarter, and the revenue was NOK 907 million, and that's NOK 76 million above Q2 last year. Year to date, the first half year, the revenue came in at NOK 1.75 billion, which is an increase of NOK 204 million compared to last year or 13%. However, the profitability in the quarter was significantly impacted by the NOK 102 million in extraordinary costs. EBIT was negative of NOK 41 million. That's NOK 73 million below Q2 last year. For the first half year, we see an EBIT of NOK 17 million, which is NOK 51 million below last year.
The net financial items, the 13 million, that's a reduction of 6 million compared to last year, and it's all or mainly related to our investment in Nordic Aqua Partners that had an increase in market value of 6 million in Q2 this year compared to an increase of 3 million last year. The book-to-bill ratio is 97% the last twelve months with an order intake of NOK 3.2 billion and a revenue of NOK 3.3 billion. The record high revenue, the 907 million, that's an increase of 9% compared to Q2 last year. The activity increased in all our three business segments, and in general, we see a high and good momentum in all our markets.
We communicated in our Q1 presentation that we will not enter into any new contracts in Russia in the foreseeable future. We are very pleased that we have managed to replace the revenue from the Russian market with increased activity in other markets during the quarter. Overall, good activity in all markets in Q2 compared to last year. We see that the revenue in Europe, Middle East is impacted by the situation in Russia, and the loss of revenue in the Russian market has to a large extent been replaced by high activity in Turkey. The Sea Based revenue, that's representing 81% of our total revenue in the quarter, and the Sea Based revenue increased by 3% compared to last year.
We see significantly increased activity both within Land Based and Digital, 50% and 40% respectively. Financial performance was weak in the quarter due to the one-time warranty and cost provisions and also the negative impact from the high inflation rates. EBITDA that was NOK 3 million in the quarter and EBIT of NOK -41 million. Adjusted for the extraordinary costs, the NOK 102 million, EBIT came in at NOK 61 million. That's corresponding to an EBIT margin of 6.7%. We are of course very disappointed about the financial performance in the quarter. The main part of the extraordinary cost provision is related to old contracts, but still, we need to further improve our project execution capabilities and project management.
As Knut stated, we have already initiated and will implement a cost-saving program in the entire AKVA Group. We will come back in our Q3 reporting with a clear target for that, the cost-saving program. At the end of Q2, we have available cash of NOK 637 million, which includes NOK 500 million not utilized credit facility with DNB. The new financing with DNB was completed in Q2 and gave us additional NOK 200 million in credit facility. Adjusted for this increase, the NOK 200 million available cash was reduced by NOK 124 million in the quarter. Looking at the net working capital, it continued to increase and ended at 13.6% at the end of the quarter compared to 12.6% last quarter.
The increase, the NOK 45 million, that's mainly related to higher inventory level as a direct consequence of the supply chain restrictions and the cost inflation. Looking at the year-to-date number, we see a significant increase in inventory levels of NOK 91 million, explaining the total increase from 362 in Q4 2021 to the 454 now in Q2. This increase in inventory, that's partly related to increased supplies to secure production, but also to the cost inflations we have on raw materials and components. The net interest bearing debt, if we exclude the IFRS 16 liability, increased by NOK 128 million in the quarter. This increase that's related to first, CapEx activities of NOK 53 million, and a big part of the 53 million that's related to our three innovation agendas.
Secondly, we have the increase in net working capital, the NOK 45 million. Last, we have payment of interests of NOK 14 million, and also payment of corporate taxes of NOK 10 million in the quarter. This poor financial performance in the second quarter that hit our NIBD/EBITDA covenant hard, and the covenant increased from 3.02 to 4.45 at the end of Q2. There is a threshold of 4.5 with DNB, and of course we need to monitor this carefully going forward with high focus on improving our financial performance, and at the same time, keep an extra attention on the inventory levels to avoid further increase in net working capital.
Looking at the return on capital employed, it was impacted by the poor financial performance, and it was reduced to 3.7% in Q2. We still have a target of 15%. However, as due to the turbulence we have had the last two years, the cyber attack back in the first half year of 2021, then the global instability with the supply chain restrictions and now the war in Ukraine, it's not realistic to achieve this target in 2023 as we have earlier communicated. We keep our target at 15%, but we delay by one year to 2024. We strongly believe that this is a realistic target in a more normalized world, combined with our organic growth strategy and operational excellence programs.
In addition to improving our financial performance, we also need to work on the net working capital. We will not reach 15% if we have a net working capital of 12%-14%. We need to get the level back down to the level we saw back in 2020, well below the 10%. Short about the dividend, we paid a dividend of NOK 1 start of March this year, and due to the very challenging first half year, especially in Q2, we have decided not to pay any dividend for the second half year. Now some more information on the segments. I will start with the sea-based technology.
Overall, for the business segment, the revenue increased by 3% in the quarter compared to last year, while we had a reduction in order intake of 4%. Of course, the profitability was significantly impacted by the cost inflations, estimated NOK 22 million, and a one-time cost provision, mainly on this Canadian barge project of NOK 31 million. Adjusted for these extraordinary costs, the 22 and the 31, EBITDA margin would have been close to 13% and close to the level we had back in 2021. The Nordic region experienced a good development with increased revenue of 8% and an increase in order intake of 7% compared to last year. This is mainly driven by high activity in our net sales and net service business.
In Americas, strong revenue growth, 46% this quarter compared to last year, and good momentum both in Chile and Canada. Order intake at the same level. Europe, Middle East, we see the effect from the situation in Russia with reduced activity in our export business, which is to a large extent offset by high activity in Turkey. The total revenue in Europe and Middle East, same level as last year, while the order intake was significantly reduced, and this is all related to Russia. Development OPEX-based revenue, our recurring revenue is 30% of the total sea-based revenue in the quarter, and that's NOK 4 million lower than last year.
However, if we adjust for this divestment of AKVA Marine Services back in Q3 last year, we have an increase of NOK 22 million or 10% compared to last year. We have good activity in all our service stations in Norway, and we have also decided to start up a new service station in Harstad, the northern part of Norway, and we expect this to have a positive effect on our numbers next year. Land-based order intake of NOK 96 million compared to NOK 116 million last year, and this newly announced contract with Cooke Aquaculture that was awarded mid-July and will be added to the order backlog in Q3. On the revenue, 50% increase in the quarter compared to last year.
A significant part of this increase is related to the full grow-out contract in China together with Nordic Aqua Partners. We can report that this project is progressing according to plan. Poor financial performance in the quarter. We have this NOK 49 million in extraordinary costs, whereof NOK 15 million is related to cost inflations in ongoing projects and the NOK 34 million is a mix of margin reduction and increased warranty provisions. Adjusted for the extraordinary costs, we have an EBITDA margin just below 5%. Last, the digital business segment. We have a strong increase in revenue of 40% higher at this quarter compared to last year. Strong growth both in Nordic and the region of Americas.
Looking at the EBITDA margin is reduced from 22.3% to 17.8% this quarter. We have communicated that we have invested significantly now in this business segment and have also ramped up the organization, the last 12-18 months. Of course, on short-term, medium-term, this will also impact on the profitability. Thank you. Knut will now continue with the outlook.
Okay. Thank you, Ronny. Concluding with the outlook, market, we expect that the market for our technology is gonna be reasonably strong in the years to come, also on the back of the salmon price going forward. Very short term on the aqua side, we have some uncertainty in the second half with regards to cost increases and how that will impact profitability. Order backlog overall is solid and forms a pretty good foundation to execute our organic growth agenda. Our medium-term guidance, as already mentioned, is targeting a minimum of NOK 4 billion revenue and minimum 8% EBIT margin in the year 2024. We are installing cost-saving programs and they are being implemented now. We will disclose targets during Q3 presentation.
However, we still want to have our three times innovation agenda, both for digital, land-based, and sea-based. That's gonna continue at the level we have built up to, and that will not be affected by the cost-saving initiatives. That brings me very much to the end. I think we go for the Q&A. Yeah. I think we could start with any questions from here, from the audience, and then we go to the virtual questions afterwards. Any questions from you guys? Yeah.
Hi. Alexander Aukner from DNB. Just on the land-based backlog, how many of these land-based projects are not fully funded? How much of the backlog is the Nordic Aqua Partners expansion?
In the backlog, we took out the AquaCon contract a quarter ago. All the backlog today consists of post-smolt, which are projects done by fish farmers, so they are funded. The only other contract in the backlog is the NAP project. The NAP project is fully funded. We have ballpark NOK 700 million, a bit more than NOK 700 million. I think NAP's could be 30% of that.
Mm-hmm. Mm-hmm.
About.
Yeah.
70% is post-smolt. All of it is funded.
Okay, good. Just another question. Sorry. There's been some articles in the trade press regarding recirculation facilities and the post-smolt not performing as well as it should because it's been growing too fast in the RAS facility. Is that a problem you recognize? Is it due to the operations of the RAS facility or the construction? Any comments on that, please?
Now, there are various solutions, technology platforms, and suppliers. I have to speak on behalf of the experience we are seeing. We are on the really new post-smolt technology platform. Tytlandsvik was the first sizable one we did. There we have actually very good biological results, both inside the facility itself and also what is happening in the sea phase. We have also delivered to a few other customers, larger farmers. The situation there is that they are coming back to us with expansion projects. That is at least an indication that it has been working in the first round.
Yeah, I also hear a lot of stories, but at least with the more developed technology platforms, our read is that it is working. Okay. Maybe we can do some questions from the virtual room.
We have some posted questions. I think we'll start with the questions from Vegard Mjelde from Pareto Securities. The first one is you were very close in breaking the EBITDA net debt covenant in Q2. How do you see this for the next few quarters?
Yes. That's correct. We are close, 4.45 compared to the 4.5 threshold. As mentioned, we have, of course, a high attention to monitor this really carefully. And our forecast prognosis shows that we will manage within the covenants in the next quarter. Of course, the headroom is tight.
Thank you. Some of the questions here you have already commented on, but I'm gonna read them anyway. In previous quarters, AKVA has communicated a target of 15% ROACE in 2023. Now that is moved to 2024. Can you elaborate why?
We had our annual strategy update with our board in May. We are doing that once a year. We looked into what was going on. We did the modeling of what you could expect and project in the years to come. Let's be clear, we have been facing some headwinds in the last couple of years. We had this cyberattack one and a half year ago that was very unwelcome, was a big setback in quite some of our operations and some of the macro things going on, and some of the specifics with regards to the old contracts and stuff.
The conclusion of all that exercise was that, yes, we are really optimistic on our ability to execute growth, but 2023 is too early, so 2024 is more realistic. That's why we are changing communication.
Thank you. With an ambition of minimum 8% EBIT and minimum NOK 4 billion revenue in 2024, you need to trim the balance sheet by NOK several hundred million to reach the target of 15% ROACE. How realistic is that? Also a question from Vegard Mjelde.
I commented that in my presentation. Of course that's it's not enough to deliver the NOK 4 billion and the 8% EBIT margin. We also need to work on the net working capital. We cannot continue with the level of 12%-14% and reach this target of 15%. We need to get back to the levels we had in 2020, well below the 10%. Also looking ahead, a significant part of the increased activity will come within land-based and digital. For land-based projects, we always strive to be cash positive on the contract. That will not build on the net working capital.
A little bit different composition because you see more growth of land-based and digital than sea-based, so that is a change. Another thing, operational thing to comment is that we still think that AKVA needs to mature as a company when it comes to professionalizing the supply chain, including the systems to support it. We are just about to kick off massive big ERP system. AKVA's history of acquiring companies and they have never been really well integrated from a system point of view. We are still running on 11 different ERP systems. We are not a super large international company, but still with 10 operations in 10 countries. We are running on 11 different ERP systems, so that's highly inefficient also from a supply chain management point of view.
We are investing in our infrastructure. We have recently hired a number of supply chain specialists as well. Bringing all this together, we should be able to streamline our operation much more than the situation today.
Thank you. We have some questions from Carl-Emil Kjølås Johannessen. I think I will read them all. Can you say something about the competitive landscape in building post-smolt facilities at the moment? Is it possible to win contracts without being too aggressive on price?
Well, typically, you see two type of processes. Either you have a relatively streamlined tender process where several companies, RAS companies are invited to give offers. That is one type of processes. Then with others, they decide to go exclusively early on because it takes a lot of time in the pre-engineering phase. They go exclusively with one provider and select early on. There are two type of processes. Generally, yeah, we have just entered into three new contracts, and we claim them to be at a healthy margin level, and also with a totally different contract base with all kind of cost regulation mechanisms.
We think it's an attractive market.
Thank you. We have two more questions from Carl-Emil Kjølås Johannessen. The first one is: Are you developing the different solutions, e.g., fish handling in land-based farming in-house, or are you looking to buy companies to get this competence?
We have some people in-house which are doing quite some of the engineering it takes to do a complete fish handling. We don't have all the capabilities in-house, so we have partnered up with one third party. Together with us, we are making a complete fish handling system. We don't see the need for acquiring them, but we have a very solid partnership with one third party there.
Thank you. We have a last question from Carl-Emil Kjølås Johannessen. Should we now assume close to zero EBITDA margin on the NAP project going forward?
No. It's still a positive margin expectation there and we expect a low double-digit gross margin on that contract going forward.
Well, then we have no more posted questions. I don't know if we have any more here.
Any other questions from you guys? No. All right. That brings us very much to the end. Thank you very much for participation and have a nice day.