The markets, the segments, financials, and then the markets and outlook. In this quarter, Bakkafrost harvested in the Faroe Islands 13,101 tons, compared with 17,561 in the same quarter last year. In Scotland, we harvested 6,646 tons, compared with 10,634 tons in the same quarter last year. The feed segment had record high sales in the second quarter, 31,243 tons, compared with 27,272 tons in the same quarter last year. The markets, especially salmon prices, were exceptionally tight in this quarter, and there is a tight supply outlook for the next quarters.
In the feed and especially the fish meal and oil segment, we saw a good sourcing of raw materials of 97,610 tons, compared with 59,290 tons last year. The revenues were all-time high, DKK 1,684 million, compared with DKK 1,618 million last year. Also, all-time high operational EBIT in a quarter, DKK 587 million, compared with DKK 407 million last year. The cash flow from operations amounted to DKK 542 million, compared with DKK 532 million last year. There were positive EBIT, operational EBIT in the farming operations in Faroes, Scotland, and in the fish meal, oil, and feed segment, but negative in the VAP due to the contracts.
In this quarter, we paid out dividends of DKK 5.14 per share for 2021. The group EBIT was DKK 587 million compared with DKK 407 million. The farming margin in the Faroes was NOK 63.38 for the first quarter versus NOK 26.52 last year. The combined margin from Faroes, from farming and VAP, was NOK 52.28 versus NOK 26.92 last year. This is the second quarter in a row with record high combined margin for the two segments. In Scotland, the farming margin was NOK 8.29 versus NOK 6.75 in the same quarter last year. Adjusted for contracts, the margin could have been NOK 22 . The VAP margin dropped to minus NOK 24.46 in Faroes from NOK 1.53 last year due to the exceptionally high spot prices.
EBITDA margin for our fish meal, oil, and feed segment increased to 22.7% from 16.5% last year. If you look into the markets, we see the salmon price increased, the spot price increased around 70% in this quarter to DKK 107.46 on average, compared with DKK 63.31 the same quarter last year. The main drivers were reduced supply of more than 6% during the whole first half of the year. This is the first time we see that high drop for two quarters in a row since 2010. We saw also record high volumes sold on contract in this quarter, leading to low availability of spot sales. We also saw the HORECA segment coming with a high demand in this quarter post-COVID.
The price development in the first half was extraordinary and unexpected, and that's why we had so many other companies had to report extraordinary high losses on contract sales. Somehow this development have self-fueled the development on the market spot price as the balance with high contract volumes and low supply created larger than expected gap into the spot sales market. In the appendix, in the presentation, page 36, we have included an overview of the geographical breakdown of the sales of Bakkafrost. The EU is consistently buying the majority of all our salmon, but both the Asian and the U.S. market have increased their market shares during 2022. Also in appendix page 39, we have included a page showing the average price well below spot prices.
This is a look into the SSB price compared with the NASDAQ price, which indicates an all-time high difference between the actual achieved price and the NASDAQ price. In the appendix on page 40, we have included an overview of price movement shown largely in line with other proteins. If you go to operations, in the first quarter, the volumes in Faroes dropped 25% compared with last year, 17.5 compared with 13 this year. In Scotland, the volumes dropped from 10.6- 6.6 this year. The group volume therefore dropped 30% from 28,000- 19,700 this quarter. The harvest weight in Faroes dropped 3% from 4.99 kilo- 4.7 kilos.
The South Island in Faroes delivered 40% of the volume in this quarter with an average weight of above 5.2 kilos. North and West Division lost the target and delivered only 4.5-4.6 kilo in average weight this quarter. The combined is 4.7. Smolt transfer in Faroes was 3.3 million at 326 g. The focus in our hatcheries is on delivering robust, high quality, and healthy, large smolt to our farms. With this focus, we see a positive development in optimizing the total biology for our farming operation. The experience the last year have shown us the need to prioritize robust, healthy smolt in front of larger smolt.
This will take down the target size in 2022 from 500 to somewhere between 350 and 400 on back of the strategy amendments into slower growth in the freshwater phase with new learnings and insights. We see clearly positive impact with large, robust, and healthy smolt on survivability growth and growth rates in our farms. Our target on 500 g is still valid, but it takes a bit longer time to achieve the target. In Scotland, the harvest was 6.6 versus 10.6 k ton last year, a drop of 38%. The South Division in Scotland delivered 64% of the volume in the quarter with an average weight of 4.1 kilos. The North delivered 36% with average weight of 3.9 kilos.
Early harvest of impacted fish in the quarter in the North Division amounted to 500 tons with an average weight of 2 kilos. These fish were challenged during Q4 2021 prior to the implementation of our marine risk reduction strategy. There are accounted for extraordinary cost in this quarter of DKK 57 million related to this issue. In the third quarter, up to this week, DKK 42 million have been accounted on exceptional mortality due to the same reason in the same area. However, in the North also delivered the largest fish in this quarter from a single site. This was Portree in the north side of Skye, the island of Skye, with an average weight of 4.8 kilos.
Smolt transfer in the quarter increased to 2.8 million versus 2.1 last year, and also a slightly larger size, 101 g compared with 77 last year. The results from the new hatchery at Applecross will gradually start to make more impact from next year. The operational EBIT from the farming division in the Faroes increased 80% to DKK 607 million versus DKK 343 last year. The margin in the Faroes was 54% of the revenue versus 36% last year. One of the sites in Faroes where we harvested the site empty in this quarter was Fróða in the South Island.
The KPI in Fróða this quarter was a growth rate of TGC 3.56, a survivability of 94%, and feed conversion rate of 1.07. This site was stocked in March, April 2021 at 299 g. The average weight of all fish was 5.1 kilo gutted weight, harvested 5,400 ton gutted weight. The farming cost on this fish was 33.60 NOK per kilo gutted, whereof feed accounted for 58%, smolt 15%. All other costs, 27%. That is salaries, maintenance, biology, overhead, depreciation, finance, et cetera. It took 400 days to grow this fish, 13 months. These costs did not include processing and distribution, of course. In Scotland, the operational margin dropped 23% to DKK 41 million versus DKK 53 million in the second quarter of 2021.
The margin in the Scottish farming operation were 9%, flat from last year. We see on the graph here that temperature in the Scottish regions were slightly higher than last year. The strong margin in the Faroe Islands is on back of very good biological development and all-time low sea lice numbers. Strong growth rates, low mortality, and good price achievement are the main drivers in this quarter. In Scotland, we saw issues. The operation had huge issues in the second half of 2021, and some sites were impacted into the beginning of the first quarter. In order to get back to track, we decided to hold harvest back in the first quarter and grow the fish to more optimize the harvest size and into the second quarter. This has paid off in some sites, but we saw some impacts in some other sites.
Farms farming operation in Scotland have experienced regular impact from plankton, algae, and jellyfish over previous summers. We strongly believe that robust healthy smolt will have a very positive impact on our new and our new hatchery will start to deliver in the near future. We have all elements of our marine risk reduction and survivability strategy in place. This includes new resources to enable our salmon to grow better in the marine phase in the natural environment. For example, the fresh water treatment resources that has been upgraded with Aqua Kvaløy in March and Ronja Star arriving in September. The introduction of large, healthy, robust smolt will have the largest impact on Scottish farming. Currently, most of the hatcheries are flow through and small fish. All these larger smolt are stocked in our farms.
As these larger smolt are stocked in our farms, we will reduce the risk in the natural marine environment through shortening their marine cycle. Applecross will start to deliver larger smolt in the first quarter next year. Looking at the VAP segment, we sold 27% more volumes in the second quarter this year compared with last year. The revenues increased 61% from DKK 259 million- DKK 417 million. The operational EBIT dropped from DKK 5 million- minus DKK 108 million due to increased raw material costs as the internal buying price traded in line with spot price development from the farms. The EBIT per kilo dropped from DKK 1.53- minus DKK 24.46.
48% of the volume in the quarter were used internally in our VAP operation from 28% in the second quarter last year. The feed operation in this quarter doubled the EBITDA from DKK 57 million- DKK 119 million. The margin also increased from 17%- 23%. Raw material sourcing was also good in this quarter and has also continued into the third quarter. 98,000 tons in this quarter compared with 59,000 last year, an increase of 65%. Fish feed sold in the quarter were also record high at any second quarter, 31,243 tons, 15% up from last year, and 97% of the feed is used internally. Fish meal and fish oil costs have increased on the back of increased prices on marine raw materials in the second quarter 2022 compared with last year.
Our inventories of raw materials have never been as high as they are at this moment, at this time of the year, because of the raw material intake. We produce all fish meal and most oil internally and source the pelagic fish from offcuts from local fishery and processing facilities. This is both a driver for a strong position using high quality raw materials and differentiation on taste and good biology in our farms. Now Høgni will take us through the financials.
As Regin mentioned, we had roughly DKK 1.7 billion in revenue in this quarter, same level as last year in this same quarter. Approximately 30% lower volume, but a strong tailwind on the price side makes up that revenue. Our operational EBIT increased significantly with 44% to DKK 587 million for the group in the quarter. Our fair value of the biomass has increased significantly as we have a stronger price in the valuation of the biomass, so by 228%. As our revenue tax, which we pay in the Faroes, is linked to the salmon price, the spot price, we also paid more in revenue tax in this quarter, amounting to DKK 63 million.
Profit after tax increased to DKK 845 million. We have accounted for onerous contracts of DKK 34 million in this quarter, and as Regin has mentioned, we had exceptional mortality costs in Scotland of DKK 57 million. If we look in the development on the operational EBIT for the past five years, we have two very, very strong quarters now in a row where we have broken the record twice in regards to operational EBIT. Year to date or for the first six months, we have DKK 1,004 million in operational EBIT in total, and an adjusted earnings per share in this quarter of 6.77 and 11.58 in total.
On the balance sheet, our property, plant and equipment has increased with some DKK 200 million, amounting at DKK 5.091 billion. Our biological assets have increased significantly to DKK 3.3 billion, whereof roughly DKK 1.3 billion are fair value adjustments. As Regin mentioned, we have built significant inventories in this quarter, primarily in the FOF segment as a result of the intake of raw material, marine raw material. DKK 240 million an increase in this quarter compared to the same quarter last year, and it amounts to DKK 923 million in total. Receivables reduced by DKK 132 million, amounted to DKK 689 million. Cash and cash equivalents were on the same level as last year.
Equity has increased by DKK 931 million- DKK 10,179 million, and the equity ratio have increased by one percentage point to 65%. Looking at the cash flow. Cash flow from operations of DKK 542 million, minus DKK 272 million from investments, and minus DKK 206 million from financing. Net change in cash was DKK 63 million. Our interest-bearing debt is on the same level as increased with DKK 70 million during the quarter, primarily driven by the net investments and also the dividend payment of DKK 304 million that was made in May. Counterweighted with the cash flow from operating activities of DKK 605 million.
By the end of the quarter, we had a net interest-bearing debt of DKK 2.267 billion and undrawn credit facilities of just short of DKK 3 billion. Back to you, Regin.
There was a 7% drop in the global supply in this quarter. This was driven both by movements of inventory, but also the reduction of supplies from primarily Norway, U.K., and Faroes. Chile actually increased their harvest in this quarter by 18,000 tons. On the feeding of the fish, we see in this quarter that there was a flat development globally in feed. More or less no change. The harvest weight in all regions were slightly down. The available volumes to the market has dropped but we see that the value of the market increased somewhere between 30% and 40% taken into consideration the price development.
This is a clear sign of the positive food service dynamics following the release of COVID-19 measures. The high contract share compared to other markets is a significant discount to spot prices and have fueled to the spike in spot prices. The EU market dropped 4%, the U.S. market dropped 3%, which is lower, less than the market in oil, which is an indicator of strong markets in those areas. If you look at the markets going forward, the short-term outlook, we expect a limited supply in the second half of 2022. These dotted lines indicate the expectations three months ago. What we see is that there is a reduction of supply.
The expected supply in Europe has been reduced 2% in the third quarter and the Chilean supply is now around 7% down in the fourth quarter. All in all, this takes the global supply down, both in the third and in the fourth quarter compared with expectations three months ago. The new expectation is more or less no global growth in the third quarter and only a moderate growth of around 2% in the fourth quarter. In 2023, we also see in the first half of the year down to 3% supply growth compared with 5% expected three months ago. As it looks now, there is a tight situation in the market the next year ahead of us.
The market is tight, as we saw on the previous graph, and this will lead, especially on the contract side, that contracts will be lifted on back of the recent development and also the outlook for industry in general. On the harvest side and our volumes expectations, we maintain the same guidance. I admit that in Scotland, we are a bit more tight than we were a while ago. The stocking of smolt is also unchanged. In the Faroes, 14.9 and in Scotland 10.8. On contracts, we have signed contracts amounting to around 32% of the total expected harvest in the Faroes and Scotland. We will normally, in the second half of the year, many contracts are signed for next year.
We have revisited our strategy on contracts, especially in Scotland. On the fish meal, oil, and feed, we expect around 130,000 tons of feed sales this year, unchanged. Due to the good sourcing of raw materials for the fish meal and oil, we have upscaled, of course, this number because we already have passed the target. On the business development investments in new freshwater capacity is the main in this area and is progressing according to plan in Glyvradal and Norðtoftir, and these two sites are expected to start operation during the fourth quarter into the first quarter and will be scaled up in the first half of 2023.
In Scotland, Applecross project is also progressing according to plan, and we will start operation by the end of this year and phase V and VI will start operation end of 2023. So already early next year, we will see some contribution from Applecross. Applecross will have the same size of capacity when finished built as Strond in Faroes. Contracts have been signed for large expansions of our feed plant, Havsbrún in Fuglafjørð, to double the capacity in this new factory, and that will be up and running in 2024. Investment strategy in Scotland is progressing and will deliver improved operations over time. Our focus is to reduce the biological risk, to improve efficiency, and to create organic growth.
We believe that we can use a lot of things learned in Faroes to improve the operations in Scotland, but it takes time to upgrade the whole value chain, especially to build the new hatcheries. We are confident that strong belief in the operations and that what we invest in will eventually give good results. Thank you very much. Now we open up for questions if you might have. Christian?
Yes. Christian Olsen Nordby, Kepler Cheuvreux.
Maybe, I think there's a microphone coming to you.
Christian Olsen Nordby, Kepler Cheuvreux. One question on your smolt strategy that you now grow it slower. What does this have as implications for the volume growth that you previously given on the capital markets way out in time?
Yes. With the smolt strategy, we have seen that, especially in the start when we started with Strond, that we were quite eager to get results as fast as possible, and the fish has grown very well in these new hatcheries. The development has been very, very positive, and we have had no big impacts or no big issues at the start-up. What we have learned over time is that growing smolt is important to build the fundament for a robust development when the fish arrives to the sea. We have learned that especially the heart it takes time to build a strong heart. The water temperature in our hatcheries needs to be right.
The water quality, the environment in the hatchery needs to be maintained at special circumstances, which means that it takes slightly longer time than we originally had calculated, because it's also possible to grow a salmon much faster. That has a negative impact on the biology of the operation in the farms. After we amended this one and a half years ago, we now see much stronger and robust smolt, which means that we use more time in the hatcheries, and that takes somewhat down the capacity compared with the previous numbers. That's why we need now the capacity from Glyvradal and Norðtoftir, which will start in the fourth quarter before we will reach our 500 g.
This compared with our expectations one year ago. These are slightly delayed, maybe six-eight months compared with what we expected a year ago, and these are also related to COVID. That's why we are a bit delayed, and we'll reach hopefully our 500 g next year, or at least we will be closer to 500 g next year. As I said earlier, we will focus more on robust smolt rather than on growth. As I mentioned with our numbers from Fróða, with robust smolt, we see a very strong development even with starting from 300 g-400 g. What impact it will have on our harvest volumes is a bit difficult to say.
There will be some impacts, but eventually we will reach to the same level as we have good capacity in the pipeline in our hatcheries in Faroes. I still expect that we will come there, but maybe a bit late, maybe a year delayed or something like that.
Very good. Another question on Scotland. Now that we're coming into the difficult autumn period, do you see any signs for anything that should be better than last year?
In Scotland, we have built good capacity now with freshwater treatment. That's some protection on biology. As we see here in the second quarter, and as I also mentioned already now in the third quarter, we have already reported some losses. These are mainly fish that were impacted already in the fourth quarter and the first quarter. It seems like if fish are impacted too often, there is kind of an accumulation taking place. Hopefully with the freshwater, we can protect the fish better. That's our strategy. We don't have a perfect operation as the fish is far too long time, and the robustness of our smolt is too low. There is an increased risk this autumn.
Next year we will be even better because then we will start with some larger fish that will be only one summer in the sea. At the moment, we have too many fish, two summers in the sea. The risk this year, I am confident, is lower than last year, but it is not where we want it to be. That's why we still need to see results of the larger smolt. We have made a lot of other improvements all across the operation with feeding, with water, with protection in the pens, et cetera. There is the final last thing with larger smolt, which we think is quite important, quite crucial actually in Scotland, that we will hopefully see next year, giving us some impacts.
Thank you.
Hey. Wilhelm Røe, Danske Bank. Just a question on the development in the margin on fish meal, fish oil and feed. As you see a healthy development, just like curious to hear your thoughts on the development in these margins going forward and also if you see a push from soaring raw material prices.
Your question was about the fish meal and fish oil operation development there, how we see that?
Yeah. Margins there.
The margins and the price development on raw materials on fish feed?
Yeah.
Yeah. Well, as you indicate, we produce our fish meal and oil internally and this year has been exceptionally good on raw material intake, which is good because, of course, when we produce internally, that helps the total cost base in our operations. As indicated with the numbers I gave on the details on Fróða, 58% on that calculation was feed. Feed is quite important. Raw materials have increased. Fish meal and fish oil cost have gone up. Raw materials in our sourcing is increasing. Because we need to buy from fishermen in competition with the market in general, so it also impacts us. We see also that vegetable ingredients are increasing significantly.
All in all, the development over the last 12 months has been that feed raw materials have gone up considerably. We have been buying now over the summer at all-time high raw material prices, which means that fish meal and fish oil will eventually increase. But as I mentioned earlier, we have all-time high inventories, which means that there is a time lag in when this will hit our salmon cost price. The margin in our feed segment is an indication that the increases of prices, which are based on the actual raw material cost in this quarter, but we have bought them a number of quarters ago, that there is an increase on prices, but the time lag means that we are building up on internal margin in our feed sales.
There is a very clear indication that prices will go up, cost prices will go up on feed. But I will emphasize that we think that producing internally for us gives us an advantage and maybe marine ingredients have had less impact than vegetable ingredients so far. Do you have any follow-up question or is that okay?
I think that's it.
Thank you.
Martin Kaland, ABG Sundal Collier. Do you have any comment on demand and price premium in high-end segments? For example, are there any signs of consumers trading down, or how are they reacting to now gradually higher prices?
That's a good question. Difficult to answer. I think there is a strong demand also with premium products, because all products have gone up in prices as you will see in the appendix page which I referred to earlier. At the moment we see also very good demand for large fish at premium prices. There is also signs that with better availability of cargo, that cargo prices might come somewhat down, which is also positive. All in all, I think that there are. The uncertainty is big at the moment, but there are good signs in some areas. For example, the demand on salmon is very high. The demand for contracts is very high.
My strong belief is that we will see contracts coming up in prices going forward. So there will be both a driver from contracts going forward. Of course, the spot prices, they vary, and when we see prices really on the top, it might be difficult to get the extra premium sometimes. Sometimes it's easier when prices go a bit down. So consumers trading down, I really don't think so. That's not my impression.
I see no more further questions, so thank you very much for coming. Thank you for your interest.