Welcome everyone to Atlantic Sapphire and the Miami Blue House. Today, we have released our annual report for 2020 and our ESG report for 2020. I'm here today with the Chief Financial To the officer Karl Georg, my name is Johan Andreasen. I'm the Chairman and the CEO of Atlantic Sapphire.
Before we go over to the presentation of the Presentation of the operational update, the highlights from the industry report and the annual report. We'd like to show you a little bit of footage here from the Miami Blue House. We're actually standing Right now in the test kitchen of the Blue House, we're looking forward to welcoming many of you in the future.
The phase of Blue House which we are standing in now is an integrated facility with a capacity of 10,000 tons of head on gutted fish per year. We are starting with the egg, and we are shipping out consumer ready fillets in the other side of the building. This is by far the largest blue house a land based salmon facility in the world. 1,000 and 1,000 of innovation hours and design hours has gone into this Tremendous facility.
Let's have a look.
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So we're standing here
on the ground 0 for a phase 2. We have excavated out approximately 20 acres of land. The elevation there where we're standing now is about 6 feet above sea level. And underneath us, we have the Biscayne aquifer just few feet down, followed by the Florida aquifer, which we're sourcing the saltwater from, and then the boulder zone in 3,000 feet. The farm building for phase 2 is going to be similar in size to the phase 1 building, but we're only building out What we call the grow out systems for medium sized fish from about 300 grams to 3 kilos.
So the life cycle is gonna start in the existing phase 1 facility where we have additional capacity on the smolts, and we also have additional capacity for
We expect to see the ramp up in harvest volumes from the Phase 2 facility in 2023. More details The budget for phase 2 and the construction timeline will be ready later this quarter, and we're looking forward to share that with everyone. Yes. Good morning, everyone, and good afternoon for those of you in Europe. And thank you for joining everyone.
And the call is to kick things off with going through a presentation. The operation update that was also shared through News Web and on our web page. Afterwards, we will open up for a Q and A session. So Until that, we would ask all participants to remain muted. And at the end of the presentation, we will open up a minute or so for those who have We will take down your names and then everyone of you the chance to ask your question in the due course.
So with that, everyone, I'd like to give the word and kick things off today.
Thank you, Carl. And we'll assist you to the conference page. So here's a brief overview of what we're going to touch upon today. We're going to start with the Q1 operational update. We're going to talk specifically about some of the challenges that we have faced.
Then we migrated into an update on the Phase 1 construction and furthermore to the Phase 2 design and construction. Then a few remarks on product quality and customers and then some touch up on some highlights From the ESG report and the 2020 financials. Then we're going to sum up and open for Q and A. So even though the outlook and the long term value proposition for Atlantic Sapphire has never Been better, in our opinion. We have met some bumps in the road.
And the Q1 of 2021 is what I call the quarter. It's hard to find the highlights here, but here we are. For the quarter, we Sold our fish in the U. S. For an average of $6.8 per kilo.
That is much lower than our long term budget. The good news is that the fish that meets our superior 3 kilo plus was sold for $12 a kilo, which is Very strong in the current market. And it's actually 90% higher than the fish pool commodity price for the same period. In Denmark, our price achievement is more in line with the European spot market. As you can see there, the delta between the Total harvest and the superior 3 plus harvest is much less because we have less downgrade on the fish, less maturation.
When we updated the market in January, we gave a heads up that the batch 1, our Frontrunner batch had a lot of maturation. And during the quarter, that batch has been harvested out and concluded. And it had even more Maturation than what we anticipated at that time. Good news is the 2nd batch that we have started to harvest now is much Better and more in line with what we expect in the future with less than 10% for sure. So we should expect our net Revenue for total harvest grew up in the months to come.
Furthermore, as you all know, we have had some Huge mortality issues in the quarter. We lost OG2. And These events, plus another couple of smaller events, these events combined is making it a lost quarter and thus Negative net biomass gain in the U. S. We harvested 4 20 tons in the U.
S. And 300 tons in Denmark. In Denmark, we also have a disappointing biomass gain quarter. The main reason for that is that our lead batch That's currently taking the most of the tank volume in Denmark. Had some deal issues that originates From the freshwater where we had the incident about a year ago with the supersaturation of oxygen.
So these gills, which is effectively the lungs The fish has been impaired. So they are not able to eat as much and convert The feed as much as a normal batch. So that is unfortunate. We expect to harvest that batch out Over the next couple of months and being back on track for steady state production starting from the Q3. After the mortality events here in the United States, we still have quite a lot of fish in the farm, Approximately 1,100,000 fish that will be harvested for the rest of this year.
At this point, we cannot guide on how we will harvest that over the year, but we want to maximize the biomass gain, Playing with higher average harvest rates because we have space in the farm to grow them bigger, also keeping an eye on having a Steady supply for all our customers throughout the year. I don't know, Karl, do you have another comments before we move on?
I think you wrapped it up well, Jan.
So we're going to go more into details on what we have experienced in Phase 1 sorry, In Q1, the root cause of all the issues that we are facing has to do with mechanical And non functioning critical equipment. I can start with the first one, which is the new center rains. You know, we from the July instead of last year, we have learned that when something is off in one of the systems, A small percentage of the fish in the system will tend to die, but the first mortality is dragging with it The rest of the fish in the what we call a chain reaction. These center grades are designed to avoid that from happening. Effectively making sure that even if we have 5% or 10% mortality, the flow in the tanks are undisrupted.
These center drains should have been in place a few months ago, but due to delays related to COVID and that General delays, we have not been able to install them yet, aside from Inaki tanks. These are arriving here in Miami in a container next week, We are planning to install all of them by the end of this quarter, and that should significantly reduce the risk of our total wipeouts in our future events. Furthermore, as we have been talking about a lot of times before, it's the splitting of the systems, the grow out systems to reduce risk. We have, At this time, 5 out of 6 systems split. Unfortunately, the mortality in OG2 that We have in the Q1, that happened in a system that was not yet split.
And that's why the impact of that specific incident was rather big. Also in the quarter, we had a very big incident with our internal chiller plant that broke down. This is effectively the facility that keeps the entire farm cold. It's all the water cooler. This in SchillerCraft has been having issues since it was commissioned more than a year ago.
It's a lot of the side weaknesses. It's a lot of poor workmanship into that plant. But in January of this year, we Experienced a large leak in the pipe and we had to shut it off. Fortunately, we were able to commission temporary chillers To keep the fish alive and to keep the temperature down, but we had a couple of weeks of disruptions in production where we had to hold back feeding Take low risk. These temporary chillers are capable of keeping the farm cold even through the summer.
They're currently running primarily on diesel generators, but we are in the process of electrifying them to save costs. This is a clear claim But we will have towards the people that built it. Currently, we are carrying the cost of it, but we have a path To go after the appropriate people. Furthermore, in a well functioning RAS, You need certain specific component to work. The drum filters are what I call the city walls of any reservoir.
If the city wall breaks, you are exposed. The design of the drum filter area has not been up to par, And we have had issues with overflows of particles and fields going into the biofilters and the trickling filters, Which is not good. During the quarter, we have been modifying these drum filters to Ensure that we don't have these overflows anymore. So we are in a much better position when it comes to that. The same thing goes for ozone and protein skimmers, Very important component in a well functioning RAS.
This has not been working for the last year, very lumpy at least. They have been on and off. And we have engaged with an American company that is now fixing those. So by the end of this month, all the OZONs and Proteins Gamers should be running. Yes.
We already spoke about batch 1 that has had problems. So To sum up here, basically construction and commissioning related issues has caused suboptimal conditions temporarily And effectively reduced our biomass gain and increased our cost in the quarter. That being said, we have a clear path Together with this, it's a temporary bump in road. And we also know that when everything works the way it should, basically the fish harms itself And the systems are capable of delivering the production they are designed for. So a little bit on Phase 1.
We are wrapping up Phase 1. All the grow out systems are ready for fish. As I mentioned earlier, 5 out of 6 systems are completed. We currently have 1 system, Audi 3, that are stocked with fish That is currently not split. So until we have that done, hopefully, by the end of this quarter, we will still have A lot quite a lot of banks in that basket, but we are taking measures to reduce the risk as much as possible while we are waiting for that.
Once that system is split, we do have 19 independent RAS systems in our Phase 1 Blue House. Yeah. The construction of the Filleting facility is completed. The facility is ready for use. We are just pending some Final permits tied to the water source and the potable water quality of the water that is needed to make fillets, And we expect that permit to be in place shortly.
And meanwhile, we are doing 3rd party financing, which is Very positive. So we look forward to get out of that.
So in conclusion, our Phase 1 completion has taken more time. But for us, the focus is definitely switching towards Phase 2, now that we are really at the end of the tunnel in finalizing Phase 2. So Jumping to the Phase 2 study, I'm going to share some thoughts on how we're looking forward.
Yes. So yes, it's to be honest that Phase 1 didn't go The way we wanted. And we have a tremendous amount of learnings that goes into Phase 2 and beyond. And We are currently on track to start construction in Q2. We have actually excavated and prepared at the site already.
So We have arguably started the construction, but the main construction is expected to start later in this quarter. We have Elected Wharton Smith, which is a top Southeast U. S. Contractor that specializes in the water treatment projects as our general contractor. These the thing is Blue House, a salmon part of this is very similar to our water treatment plant.
So working with U. S. Large companies that doesn't do anything but building water treatment plants is their bread and butter. In addition, we have engaged with Hastings and Sawyer, which is a leading U. S.
Engineering firm in water treatment. We've been working with them for a year To prepare for Phase 2, they have overall responsibility for the design of the facility. And we're very happy with that relationship so far. Furthermore, by having this structure, Atlantic Sapphire will own its design of all the innovations created from this point on. And we think that is very important in terms of creating technologies and innovations that will put us in a very good position.
I also want to add that we are, as a company, in a different position now compared to in 2000 when we started Phase 1. At that time, We were only 5 people in Miami, in Atlantic Sapphire versus today, we are 150. So our in house capabilities, our learnings, our bandwidth to deal with these large projects is in a total different position. The approach will significantly reduce the risk for the cyclones, For a poor workmanship, for delays and for cost overruns.
I think also one thing we really want to stress there is that Producing or constructing a Blue House facility is really not something that anyone else has done before. Also when it comes to different designers and construction companies. So by bringing more in house, we are confident that not only Can we do this better? Because we are, at the end of the day, the ones with the most experience in doing both design and construction right now. But also we can secure what is going to be a big, big competitive advantage for the future, keeping more of our learnings in house As one of our strategic advantages.
So this is something that we feel is a very right move for the company as we head towards 220,000 tons.
Yes. So a few remarks on the product quality and customers. Not much news here. It's basically the same as we reported last time. Our U.
S. Product has great taste, quality and texture. And beyond our KPIs, where the systems are working as designed. Furthermore, we have unmatched We are the freshest fish in the marketplace and we have a much longer shelf life than all of that. We still have a very solid customer pipeline.
More than 10,000 stores are committed to take on the product. Obviously, we are not in 10,000 stores yet because the harvest volumes are lower, but we see very good feedback from the customers and from the programs that we are currently running. Additionally, we are also working to come up with more value added products. We are actually about to launch our smoked salmon product, Blue House smoked salmon, which we are very confident is going to be a great success. We also see a very strong demand growth in the U.
S. Salmon market in general. And particularly since COVID, the home consumption of salmon has And as restaurants are opening up again, we think the general time in the market is going to be very strong in the U. S. For the rest of this year and also next year.
We have now released our 2020 annual report and ESG report. For the first time, Atlantic Sapphire has released those as one large integrated report, really showcasing that we as a company see ESG risks and opportunities fully integrated also with our long term financial performance. Here you can dive deeper into what our ESG opportunities are in our materiality matrix, where we dive into all of this and try to illustrate a little bit more in detail What we're doing and why we think this is the right way to approach salmon. Jumping to the financials for 2020, I will give you some highlights as well. If you look at 2020, the full year, in U.
S. Dollars, we had revenue in Denmark of €5,000,000 2020 in Denmark was a year That was characterized by a lot of months of building up biomass after we had an incident in February of 2020. Therefore, the revenue was quite back end loaded in the year. Also, as Johan has touched upon in one of the first slides, We have been working in Denmark with a very positive trend of building up a strong premium. As you remember, the Danish fish has historically, a large extent, it's sold to the U.
S. Market, where it has fetched a big premium, while we have not spent that much time and resources on developing a premium product in Europe. That work is now fully ongoing and on track, and we're very excited about seeing where this will end. We definitely think that Due to the fantastic product quality and the unique story, the Danish fish, just like the US one, is going to be a premium product. US on the revenue side for 2020 is marked by a year where we really started harvest in the Q4, slowly ramping up volumes.
Price achievement was good, as we've talked about before, but of course, not enormous volumes. Here, we expect more for 2021 and beyond, of On a consolidated basis, group revenue was $6,300,000 for 2020. Looking at EBITDA, pre fair market value adjustment, We ended up at negative $6,000,000 $6,400,000 in 20.20. In the U. S, we ended up at €22,900,000 negative EBITDA for the year, bringing the consolidated group level To negative $30,400,000 especially on the U.
S, the EBITDA, which is production cost related, is characterized by all the fish that was harvested in Q4 being from batch 1. Batch 1 has a higher cost level. First of all, due to the fact that with the maturation issues that Fish faced, It did have on a relative basis a higher cost of production, lower feed conversion ratio, lower biomass gain. But also, what's very important to note is Batch 1, which has been the leading batch throughout Its cycle has always been the biggest part of the farm's biomass, therefore also taking the biggest chunk of fixed costs. So Batch 1 reported EBITDA and cost is going to be very, very high for the 1st batch, and then it will gradually decline as we get Towards steady state production.
And you get steady state biomass to divide all the fixed cost of this operation in between. As you know, our business is, to a very large extent, a fixed cost business, where arguably, all the feed is the really true variable costs. Therefore, at the end of the day, it's all about biomass gain. Jumping to the balance sheet. Our total assets as of the end of the year, worth $321,000,000 and we had total liabilities of 65,500,000 Depreciation amounted to SEK 6,700,000 with the biggest chunk being in the U.
S. Where we started depreciating. CapEx For the year, ended up at €64,500,000 with a little bit of Phase 1 CapEx left in 2021. But The big, big CapEx commitments going forward all are going to be related to our Phase 2 construction. On a cash flow level, on a consolidated basis, We have cash flow from operating activities of negative $47,000,000 We invested $61,000,000 in cash flow from investing activities.
And lastly on the financing side, I had $112,000,000 on the positive there. Jumping to the summary slide. Q1 2021 was characterized by Some issues with operational performance and the JA index due to construction related challenges that we'll try to give you as much detail as we can about in this presentation. The three headlines for Q1 are the chiller plant breakdown, the March 23 incident where we lost fish And lastly, issues with the main lead batch in Q4, Q1 'twenty one, batch 1, having maturation issues, which led to a lower performance. However, we are very clear that these are temporary issues that we do not expect to see in the future.
Strengthened organization is a very important topic to us across all layers of the organization. We've added more competence, Structure the company in a better and better way to ensure we're not only perfectly positioned to deliver Phase 1, but also we're in the starting point for Phase 2 and beyond I have an organization that is ready to continue the growth story. Our stock systems, when operating as designed, are Performing well. We're seeing good performance on JEA Index, which, back on the comment about what's important on the cost side, It's biomass gain and hence our focus on JAG and XM. When we also in Q1 have had parts of the farm Independent systems that have been running well, we're seeing that as not as the water quality is good enough, the fish It's delivering its job.
So it's all about getting that infrastructure up and running, and then we will deliver on our budget. COVID-nineteen, of course, we cannot avoid mentioning it. It remains an operational impact that does It caused some issues, especially on the construction side when it comes to doing our punch list work. But we're very happy to see that here in the U. S, vaccines are being rolled out.
Our employees are healthy and we hope to continue to see a positive trend there throughout 2021. Phase 2, as Jan mentioned, we actually arguably had the 1st phase in the ground with clearing off the land. We're very excited to get started there and Are on track for Phase 2 construction. Lastly, stable retail prices for Blue House salmon has been the case since we started harvest, And we expect it to remain the case going forward based on very positive feedback both from end consumers and from our buyers. Lastly, looking at a few milestones beyond what is pure operations, U.
S. Phase 2 designing CapEx budget It's going to be one important data point for us, knowing exactly what capital commitments we have in the future, but also the timeline of when We really can expect to see the ramp up of Phase 2 harvest volumes sometime in 2023. And we do expect full construction start now in Q2. Also, the advance plan for our current 160 acres of land, And what we internally refer to as the Grand Master Plan should also be ready before the summer. So that's also something we are very much looking forward to sharing with the market.
So unless you have something to add, Bjorn?
No, I think you wrapped it up very well, Carl. We should jump into Q and A, right?
Let's do it. So I want to thank you, of course, for your attention on the presentation. And I will just take you quickly through how We were thinking about conducting the Q and A session. And what we will do is, we will open up for Around a minute or so for everyone who's interested in asking a question to unmute themselves if you're calling in through the phone by pressing star 6. If you're on the Teams app, by simply unmuting yourself with the mute button.
And then state your name. I will put them down in the order I receive the names And then give each one of you the word 1 by 1. I will also allow for one more round at the end to see if there are any questions that have popped up And while we were doing the Q and A. So, please go ahead, unmute yourself and state your name if you have a question.
Alex Jones, Bank of America.
Excuse me. Could you repeat your name, please? It was a little bit unclear.
Alex Jones, Bank of America.
Are there any more questions So, John, looking forward, John, to the 2 I have written down.
This is Ort Chen from Social Capital.
Ward, I have your name. Thank you. Thanks, Karl. Very good. I think we'll start with the questions.
And then as I mentioned, I'll give everyone A chance again later to ask a question as well in the 2nd round. And then I would like to first give the word to Anders from Mittalves.
Hi. I just wonder, Bill, did you deliver copper comes from the
I think if I heard you correctly, Anders, your question was if 1,000,000,000 aquaculture will be involved in Phase 2.
Right. The answer to that is no. If they do, it will be in a much smaller scope than in Phase 1. But currently, that's not the plan. That, we cannot comment on at this time others.
Very good. And then next up, we have Alex Jones from Bank of America. Alex, please go ahead.
Great. Thank you. First, I have a couple of questions would be on the Danish incident. Is this something that you think Would it be repeatable in the U. S?
Are you worried about it elsewhere? Or is it specific to the design and the water that you're using there that you don't think it's a Issue we should think about for Miami?
Are you referring to the incident of 2020 In the February
Sorry, the fish scale quality issues, let's call it. Yes.
It's a good question. And Let me put it this way. The risk factors in land based are different from sea based, right? In sea based, you have issues with sea lice, Viruses, bacterias, algae blooms, bad weather and so forth. In land based, you don't have those.
What you have in land based is A lot of factors tied to mechanical equipment that needs to work. And as a matter of fact, one of The big risk factors that needs to be managed is gases. So gases is a big topic, whether it's oxygen levels, CO2 levels, H2S levels, Nitrogen levels and so forth. So gill health and making sure you have control of gases is definitely something that is very crucial For land based farms in general. So can we have the issues tied to Super saturation of oxygen in the future.
Yes, we can. But we it's something that can be managed. The issue in Denmark is our small facility is rather old. We have done some upgrades to it to make sure it's more stable. But as an analyst or as an investor, I think To understand that gases are important in the land base is very important.
Great. Thank you. The second question would be on the U. S. Would it be fair to say that by the Q3, you would expect to be Close to steady state on biomass gain per quarter, if not on total biomass level?
Or in other words, Are there other issues that you expect to continue to drag on into the Q3? Or are the ones that you've listed the key ones we should worry and think about?
I think the way to look at this is that we have north of 1,000,000 cash that It's going to be harvested for the rest of this year. Currently, we are working on a detailed plan of how we're going to harvest it. But the plan is To temporarily harvest larger sized fish than what we have in the long term business plan just because we have lower number of fish and we have Space for them in the tanks. So arguably, the second In quarter, it's going to have a slightly lower harvest on Q3 and Q4, but we are very focused on making sure that we can harvest every week the rest of the year To make sure our customers get stable supply. Once we get into 'twenty two, we expect to be up to what I call more or less Normal run rate, Phase 1.
I can also add one comment there to Johan's point on why we do expect somewhat lower harvest volumes in Q2. That is for the simple fact that we will focus in Q2 on getting our standing biomass in the farm up as quickly as possible So that we, for the rest of the year, can maximize the growth on that fish. So it's somewhat, I think a little bit to your point, Alex, on your question. Yes, we will be much more of a steady state operation in the second half than in Q2 When it's still focused on getting as quickly as possible to full utilization of our tank volume.
Okay. That's great. Maybe just one final one, if I may, on the press reports a couple of days ago Around hospitalization of a couple of your employees, could you just or contractors, could you just comment on that in terms of what happened, Whether it's repeatable and how that situation has evolved? Thank you.
Sure. So these 3 workers in subject, they are Part of a team from one of our subcontractors that are doing industrial cleaning in the farm. We have been working with them for A couple of years now. So they were doing a routine cleaning in the bottom of one of our grow out tanks. When one of them actually took off his mask and was exposed to we don't know if it was lower oxygen or if it was Some kind of gas, but basically he fainted and the 2 other guys came to help him, right?
So these guys were, you know, we called 911 and we got the first responders on-site. They were taken out Of the facility promptly and take it to hospital for checkup. 2 of them were already Out of the hospital as of last night. And the last report that we have is that the 3rd person is doing well as well. He's doing better.
Hopefully, he's going to recover soon. And yes, it's just a reminder that when we have safety procedures, they are to be followed. So Unfortunate event, one accident is Montour Valley. And but it looks like these people are going to be fine.
Excellent. Thank you very much.
Thanks, Alex. Then I would like to give the word to Orten, please.
Hey, guys. Just hoping you could help me better understand You know, how the maturation issues work, what were those issues? And What can you do to kind of prevent those issues going forward?
Sure.
In Atlantic Sapphire, we haven't had issues in maturation the last, I would say, 4 to 5 years. This is something that we know what needs to be done To prevent, it's a very complex way to answer it. But basically, As an animal, every animal has a need to reproduce. So that animal is exposed to stressors. It can be a wide range of stressors.
It says, hey, you know, I need to mature to reproduce before it's too late. So that's a general comment. And these stressors can be everything from temperature of the patients. It can be Noise, it can be particles in the water, whatever it is that Triggers them to go to maturation. In addition, the batch 1 here was co located with Because we are running all females, all the fish in our farms are female fish.
And that is also one medium to avoid maturation because if you have female fish and male fish in the same system, Hormones from the male fish goes and triggers the females to mature. Batch 1 was stocked together with another batch Mixed sex fish, the 1st year of the life. So they were actually exposed to some of these hormones, Which is not the normal course of business, but it's a very It's a lot of factors that affects maturation, but this is nothing that we think is going to be an issue for us going forward. We know how to manage it, We also know that due to all the construction issues we have had where we have had the temperature fluctuations, we have had particles in the water And so forth that, that's the reason why batch 1 was maturing to the extent that it was.
And just important to repeat that when we look at the next batch, batch 2, which we, in fact, have been harvesting since March, we do not see the same problem. Just to support why we really don't see this as a long term issue for us.
Great. Thank you, guys.
Thanks, Ork. Very good. Those were the 3 initial questions I had on my list. I will now open up again. If anyone has, Over the next minute raises their name, I'll give you the chance to ask a question.
So I'll give everyone a minute to let me know. Christian, thank you. And now it's again. Thank you.
Matt, in here.
It sounds like those were the 3 questions. So then I would like to start with giving the word to Christian. Christian, please go ahead.
Thank you. So I know you said you will come with a plan ahead of the summer. But I wondered in terms of CapEx Retribution at least for phase 2. Will it be very even or will it be front end or back end loaded? How do you see that?
We can comment based on what we've seen in phase 1. And in Phase 1, you typically see that you start quite slow on the CapEx side because a lot of work has to be completed And before you really see the large builds come in. So you can probably expect it to be quite Slow on the cash flow side in the start and then have a high peak that lasts a while. And then just towards the end, You see the decline as more and more of the Phase 2 ground systems are completed. We will know more and share more details as soon as we Fully finalized our Phase 2 budget and timing.
Thank you.
You're welcome. Well, 1st of all, I would say that we, of course, cannot comment directly on that for obvious reasons. But We can, of course, share some general comments. And that is that Atlantic Sapphire as a company, of course, Has access to several sources of financing all the time. Things like bank, we have very supportive banks in place.
There is a bond market and there is an equity market. Everything is available. But what is very important for us to stress here is that And before we know the Phase 2 CapEx figure, which is by far the largest liquidity input into our financial model, It is it doesn't make any sense to make any comments on that. So I think we can come back and have a better discussion around Phase 2 financing, once we know what Phase 2 is actually going to cost. Anders, I hope that answers your question, at least to an extent.
Yeah, thanks. Thanks, Anders. So lastly, I have Mads Ingjer. Mads, please go ahead.
Hello. You said earlier that you have about 1,000,000 fish that you expect to harvest the rest of the year in U. S. Does that mean we can expect 3,000 to 4000 tonnes of total harvest In 2021?
No. As I said, we Expect to harvest because we have space in the farm, we expect to run that fish larger. And we are still doing the details on that. But between 5.5 and 6.5 kilo round rate should be So, yeah, you can kind of make your estimates based on that.
One more thing. Last year, you experienced some Troubles due to noise and vibration during construction. Now that you start construction of Phase 2, are you confident that you can avoid similar incidents?
Yes. Phase 2 is going to be built in a different building, right? And we are starting our are actually starting to introduce eggs into the current Phase 1 for Phase 2 purposes in Just after the summer, in August, September, and the fish will stay there in Phase 1 until Phase 2 is ready for fish. We are not going to be in the same situation As we've been in Phase 1 where we are doing heavy duty construction works at the same time as we're raising fish. So You know, we are taking measures to avoid compromising the fish and exposing the fish to that kind of work.
Okay. I can add one more question. Well, most of these maturity issues has been for batch 1, is what I understand. Are you through harvesting batch 1 or is this or are you still on batch 1?
Yes, we're done with batch 1, and it was concluded in March. And we are into batch 2 now. And as I mentioned earlier, batch 2 looks much better, Less than 10% maturation so far. So it's a dramatic improvement from one batch to the other.
Okay. Well, thank you.
You're welcome.
Thank you. So I think unless we have someone jumping in here, we have been through 2 rounds of questions. So I'll give 10 seconds if there's a last one. If not, we'll conclude the call. Sounds like there is no urgent question.
Course, we're always available, 1 to 1 also if there's anything that pops up later. I can say also that the video we wanted to share with you in the start, We will make it available. I'm not sure what technical issues caused it to not have the sound as we saw some of you commented on In the chat here, but we'll make sure that that becomes available there. You'll get some more footage from not only inside Phase 1 Blue House, but also From the ground of Phase 2. So hoping that will give some perspective of what we have ahead here.
Johan, would you like to wrap up the call?
Sure. I was just thinking to give you guys some food for thought. It's a lot of every time that you have a mortality event in a land based It reaches the headlines of all the newspapers, right, which is understandable. It's a very dramatic event. And it's something that we are attacking To prevent happening in the future and at least dramatically reduce the magnitude of these events.
I just want to put it into perspective. If you look at the Norwegian and Chilean salmon industry, They are averaging approximately 20% mortality in the seawater phase, and that's been doing that for years. Well, I looked into our own production data from the beginning of days in Atlantic Sapphire back to 2011 up until today, Including all the big hiccups that we have had and the mass mortalities we have had, we are about 30% mortality Compared to the 20 in that Benz. And we are a novel industry. We should not forget that.
What we are doing has never been done before. And we have means to reduce and hopefully minimize mortality events in the future. So I just want people to put this in context. The reason why the mortality rates in Netburn Farms doesn't reach The headlines is because they are constantly high. You don't have these dramatic peaks.
So it's kind of disappearing As a day to day and week to week and month to month mortality, in a landless farm, you don't see any winter source. You don't see any fish source downgrades. The skin is perfect. The only reason for downgrades that we have is maturation. So, you know, keep that in mind.
We are very disappointed in the short term, but nothing has changed in the long term. If it has changed, it has arguably changed to the better. So I just want to be that to give that appeal before we conclude the call.
Very good. Thanks everyone for joining. Thank you.