Operational and financial results for the Q3 of 2022. My name is Henrik Avner, here for Packerfrost. And this morning, I will begin going through the summary of the Q3 before looking at the markets and sales development. And then moving into financials and give a short update on ESG and tax as well. And then our CEO, Rein Jakafsson, will over and go through the segments and the outlook for the company and the market.
And finally, we'll open up for Q and A. So some highlights from this quarter. In this quarter, Bakkerfrost farming operation in the Faroe Islands has had a very good and strong harvest volume. In Scotland, we have also harvested more volume than in the same period last year. The Pfaff segment, fish oil, meal and feed, has sold less feed in this quarter compared to last year.
The FOSS segment was very much dominated by exceptionally good sourcing of raw material for this time of the year. The group's quarterly results were all time high. The quarterly revenue was all time high. And all segments, except for the Scottish Farming segment, had positive EBIT in this quarter. I will come back to the numbers in a minute.
First, looking at markets and sales in the Q3. The market has very much been like a rollercoaster in the Q3, very volatile and dramatic development. In the beginning of the quarter, we had salmon prices of around NOK 100 per kilo, dropping all the way down to in the 50s in certain weeks of August. Average price for the quarter was NOK 70.25 compared to NOK 107.46 in the second quarter. So a 35% drop or a drop of NOK 37.21 per kilo.
Comparing to Q3 last year, however, the price was NOK 14.85 or higher as the price was only 55.41 kilo in the Q3 last year. In August, there was a very sudden increase of supply, which also caused a change in the dynamics in the market moving from moving the power from sell side to buy side. But despite of the changed dynamics in the market and the increased supply, markets remain strong. And the price increased towards the end of the quarter, and that increase also continued into the 4th quarter. In the appendix on Page 48, we have included an overview of the geographical breakdown of Baccarfrost sales in this quarter.
In short, we have increased our share in North America and Asia. And EU and Eastern Europe has reduced market share. Global harvest in this quarter increased around 6%. 26% compared to the same quarter last year. European harvest, on the other hand, was low.
The growth was only 1.5%, mainly caused by low growth in Norway, but also biological challenges in U. K. And Iceland. Feed sales, global feed sales were almost flat in the first half of the year. And that flat development also continued into the Q3, leading to a reduced biomass development.
Harvest weights were slightly up in most regions. If we look at where the salmon is sold, the sale of salmon was increased by 4.4% in this quarter. EU and U. K. Had good demand with a 5% increase.
And in the U. S, the demand grew 3%. And there was, in general, better availability to the U. S. Market from Chile in this quarter.
Asia grew 10% and continued a good development with high demand despite supply disruptions or supply change disruptions. If we then have take a look at the financials. The revenue for the group was nearly SEK 1,900,000 in this quarter. And as mentioned, that's a record for Baccafrost. It was an increase of 47% compared to last year.
And the was mainly driven by the higher prices and higher harvest volumes. Group operational EBIT was $325,000,000 in this quarter compared to $71,000,000 same quarter last year. Onrush contracts were positive with 46,000,000 sorry, dollars 64,000,000 and revenue tax was minus $43,000,000 profit after tax increased 90% compared to the same quarter last year and amounted to 249,000,000 strongly strong with very good performance. Operational EBIT in the Ferros in the Farming segment was NOK 35.6 per kilo compared to 12.56 last year. In Scotland, we were hampered by biological challenges, which Reinhard Jakafsson go into more details in a minute.
The margins were minus 22.9% compared to $16.32 the same quarter last year. The VIP margin was $0.06 in this quarter compared to $2.89 And it's actually, a good achievement, we think, to have breakeven results in the VAP margins when you have the salmon prices that we have in the quarter. EBITDA margin for our fishmeal, oil and feed segment were 17.8% in this quarter compared to 20% in the same quarter last year. For the 1st 9 months of this year, the operational EBIT totals at £1,329,000,000. And earnings per share in this quarter were Danish kroner per kilo for Danish kroner compared to and a total of 15 point NOK58 for the 1st 9 months combined.
In the group's balance sheet, since end of last year, property, plant and equipment have increased with $325,000,000 and amounted to $3,300,000,000 where of $1,300,000,000 are fair value adjustments. Have increased $527,000,000 and amounted to $1,200,000,000 And of course, the high activity the FAF segment, where we have had very rich sourcing of raw material, have contributed to the increase of inventory in this quarter. Equity have increased with around $1,200,000,000 and amount to $10,500,000,000 by the the Q3. And equity ratio is unchanged at 64%. Cash flow from operations amounted to 127,000,000 cash flow from investments were negative with $237,000,000 And from financing, it was $171,000,000 And cash at the end of the period was 568,000,000 net interest bearing debts have increased with €160,000,000 during the quarter and amounted to around $2,400,000,000 at the end of the quarter.
And the group had undrawn credit facilities of $2,700,000,000 And now some words about taxation, which is a hot topic these days. And just to make it very clear, Bakkerfos is not directly affected by the Norwegian proposed tax change, the resource tax in Norway. But of course, we have had a resource tax or rather a revenue tax in the Faroe Islands in place since 2014. And there is currently a proposal to change that system. It has already been changed 4x, so it's not unusual.
Now a 5th revision has been put forward to the parliament, but it has not been passed yet. In the current tax revenue tax system in the Faroes, there are 3 tax levels, 0.5%, 2.5% and 5%, which are triggered dependent on what this NASDAQ price is. The thresholds for these three levels are fixed, ranging from DKK 32 per kilo to DKK 36 per kilo, which means that over the past years, we have been at 5%, the maximum taxation more or less all the time. The main changes in the new proposition is to introduce 2 new tax levels, a 7.5% and a 10% level, which will be triggered when the summer price is especially high to tax super profit more. And another important change in the system is that the thresholds for each individual level is dependent on the production cost of the industry.
So there will be an annual revision of what the production costs are. And depending on what that is, that then sets the thresholds for each tax level. So for instance, it has been calculated that the average farming costs for the industry, which will be used as a reference for next year, is DKK 39.15 Danish kroner per kilo, which means that if salmon prices are, let's say, about 62%, that would trigger the 5% taxation level. Now the annual revision will then move that threshold up or downwards depending on the development on in the production costs. This is a benefit.
This is one of the feedbacks that the industry through the process with this proposition. And the politicians have listened and implemented that into the system so that we have accommodation, you could say, for the inflation cost inflation, that is also accommodated into the thresholds that then drive the tax the different tax levels, tax rates. Then some updates from on ESG. In this quarter, we finally received our new 4,000 cubic meter well boat for the Scottish salmon farming operation. Late in September, it was received and employed in operation.
This is a huge benefit to us. Finally, we can say that we have sufficient treatment capacity in Scotland. Now this is a benefit to the fish welfare. The well boat is equipped with freshwater treatment capacity so we can treat for gill health. But it is also equipped with a system that can allow us to remove sea lice in one and same operation.
So we can do dual treatments in one, you could say, stress event for the fish, which is a huge benefit. So far, the results from the operation with the boat is are promising promising results. We also received our first fully electrical work boat in the Faroe Islands. This is a project that has been facilitated with the Nordic Council of Ministers and is done in cooperation with, amongst others, the local electricity company in the Faroes. This vessel will be powered and charged during the night with excess wind power, power that would otherwise go to waste.
And it's a very good way for us to see and test the feasibility of using electrical workflows in the ferrous. On the rating side, we had 2 new news in this quarter. We were top positioned on the Dow Jones Sustainability Index for industry peers, scoring 43 points. And we also were ranked above amongst the top performers on Position Green's ranking of 300 Largest Companies on the Scandinavian Stock Exchanges, and we scored an A on that. And then our CEO, Rene Jakarsson, will take over and go through the segments.
Good morning, ladies and gentlemen. I will go through the segments of Packerfrost operation in the Q3. First, I will touch the Faroe Islands, the operations in the Faroe Islands. The volumes harvested in the Q3 in the Faroe Islands increased 13% from 14.9 to 16.85,000 tonnes. Harvest weight in the Faroes increased 13% from 4.6 to 5.1 kilo gutted weight.
The breakdown of the Faroe's volumes was 13% from the South Island with an average weight of 5.9 kilo head on capital, 52% from the North division, with an average weight of 5.1 kilos and 35% from the West division, with an average weight of 5 kilos. All sites had consistent and good performance. The small transfer in the Faroes was $4,100,000 at 405 gram. The focus in our hatcheries is to produce and deliver robust, high quality and healthy large smalt to our farms. With this focus, we see a clear positive development in optimization of the total biology of our farming operation.
The experience last year have shown us the need to prioritize robust healthy smalt in front of larger sizes. This takes down the size of the fish this year from a target of 500 to between 3.50 400ogram on back of this amendment in slower growth in freshwater phase rather than maximizing the size on the timing. We see a clearly positive impact with large robust and healthy smalt on survivability growth rate in our farms. In Scotland, the harvest volume was 8,100 tonnes versus 6,900 last year, an increase of 17%. Blooms of jellyfish and plankton with secondary AGD impacts caused serious biological challenges on the farming operations in Scotland during the quarter.
This both led to increased mortality and early harvest, which both increase production cost and reduce the value of the fish. The issues described in our Q2 presentation in August continued during August and into September cost extraordinary incident based mortality cost at DKK121,000,000 in Scotland in the Q3. Early harvest during the quarter resulted in low sized fish with lower value, 3.3 kilos in average versus 3.8 last year. The biological challenges in the 3rd quarter continued into the 4th quarter, but on a lower level. In October, the extraordinary mortality was 774 tonnes versus 2,400 tonnes in October last year.
Since September, we now have sufficient freshwater treatment capacity and expect this to be a driver for better biology going forward. Smalt transfer in the quarter dropped to $2,400,000 versus $3,300,000 last year. The size was 107 gram versus 98 gram last year. The results from new the new hatchery at Appletrass will gradually start to deliver large or small in the Q2 next year. We believe that shorter marine cycles with large or small in Scotland will be the game changing for our small for our Scottish operations.
The group farmed volumes increased 14% from 21,800,000 to 25,000 tonne in this quarter. The operational EBIT from the Farming division in Faroes increased 2.3x to $444,000,000 versus $135,000,000 last year. The margin in Faroe's farming operations increased to 38% versus 'eighteen last year. And the revenues increased 52%. 1 of the farms in Faroes that we harvested in this quarter was Kvaanasund A21.
I could have taken any of the others, but just to mention this one. The KPA at this site was the TGC growth rate of 3.42 survivability rate of 94% 97% survivability if the 1st 3 months were not included. The fee conversion rate was 1.05. The site was stocked with the average moat of 3.44 gram in July August 21. And average growth time was 12.4 months or 3 77 days.
Average weight of the fish was 4.8 kilo gutted weight, totally 5,500 tons harvested fish. In Scotland, the operational margin dropped 69% to minus €137,000,000 versus minus €81,000,000 in the Q3 'twenty one. We are not satisfied with the development in the Scottish operation and have a high focus on the turnaround of the operation. The temperature in the Scottish farming region was slightly higher than last year. In Faroe Islands, the biology have been strong and good.
We see all time low sea lice levels, And we see good size on harvested fish from all farms. Strong growth rates, low mortality and good price achievement in the market. The margin nearly tripled from to 35.69 versus 12.56 last year. In Scotland, the operation was significantly hampered by the environmental blooms causing significant impact on the mortality. A large share of early harvest in the quarter impacted average weight in the wrong direction and reducing value on volume.
And therefore, the margin dropped to DKK 22.90 per kilo. The level of technology in our Scottish hatcheries is about to be transformed from very old fashioned and modern technology from the '80s, 1980s to state of the art technology. This takes time. Here are some examples of the sites where we are working on the transformation. This is a geogrub site, one of our actuaries before we make any amendments.
And this is the Akerklos site before we started the new building project. And this is a picture of the project under construction at Applecross as we speak. We see on the picture to the left, on the left side, the Phase 4, which will be producing smalt in the Q2 or delivering smalt in the Q2 next year. The Phase 6 is on the right side, where the foundation is being prepared. The hatchery in Apokros was the first of our new hatcheries, and the first large smalt will be delivered in the Q2 'twenty 3.
From that point, we will be able to deliver a constant flow of large smalt to our marine farms from the site. The last part of the expansion at Aperkros will be Phase 5 and 6 and will be in operation by end of next year, which means that 1 year from now, we will be able to produce 10,000,000 smalt at large sizes from Aqua Cross. We plan to build 3 of these state of the art hatcheries in Scotland. They will all have similar capacity as the strong hatchery that we have built in the Faroes that was finished built a few years ago. Next in line, we'll hopefully deliver LargeMalt around 3 years from now.
The experiences Baccarat has developed from the mid-90s with RAS systems in the Faroes are vital to us in minimizing the risk in this process. We have, during the last 10 years, built many new projects and upgraded also old technologies in the Faroes. We are about to do the same in Scotland, but on a much more rapid journey. On the left side, we see the old Barvas Hatchery. On the right side, we see the state of the art hatchery in Strand facility, which is the model for our new hatcheries in Scotland that will produce all the smolt in Scotland in short time.
The strategy to produce large malt and hatcheries is to reduce the biological risk in the farming operation. This clearly increases the production efficiency, enables growth in our operation. Using only 10 to 12 months per cycle in the marine phase will reduce the biological challenges significantly. And with robust smalt, we see a clear trend in our KPIs that the survivability rate increases in the and the fish thrives and grows exceptionally well. 1 summer, 1 lock, 1 operator, 1 generation are crucial for our Scottish operation.
With good resources for freshwater treatment, capacity now with the 2 vessels in place and with Applecross starting up to supply smalt, about 200 or around 200 grams from Q2 'twenty three, we are hopeful for the future in Scotland. The learning with Large Smalls from the Faroes are valuable for the difficult situation in Scotland. Comparing the development in the Faroe Islands with our plan in Scotland, we see our road map for largest moat in Scotland. We see a more ambitious path, but we are already next year going to reduce the gap from 10 years down to 5 years and by 2025, we are heading for 400 gram and reducing the gap to 2 years between our operations in Scotland and Faroes. The results are very clear: lower risk, better efficiency, high survivability and more sustainable farming operation.
In the Faroes, Strand really impacted our freshwater operations from 'eighteen to 'nineteen or 'twenty after many smaller expansions we had been made in the Faroes from 2011 to 2015. And in 2020 2 'twenty three, we will see the impact from the expansions in Glyvera Daldo Nordhoffer and Via Rahe hatcheries in Faroes that will increase the capacity another level in Faroes. And then finally, our hatchery in Elnabruck in Faroes we'll take it further from there. In Scotland, Uppercross Phase 4 will start operation in January 'twenty three, and start to deliver smalt into our marine sites in the Q2. And Phase 5 and 6 will then start around 1 year later, adding the capacity up to around 10,000,000 large moat.
Hatchery number 23 will be built during the period 'twenty three to 'twenty six. Our solution for Scotland is clearly large, robust smolt. They will stay shorter time in the water, and they will be more robust to handle issues. Issues will be there also in the future. With Apokrof scaling up production in 'twenty three and 'twenty four, we will gradually see the benefits and game changing effects of this significant investment.
So going back to the VAP segment. I am pleased with our strong development in our VAP segment with a salmon price in the quarter, spot price around NOK 70, our result around 0 is acceptable. However, in the future, contracts will increase significantly in price, and that will have a positive impact on our next year operation in our Wafer operation. We sold 24% more volumes in the Q3 this year than last year. The revenues increased 45% from 267,000,000 to $386,000,000 The operational EBIT dropped from $11,000,000 to nearly 0.
The EBIT per kilo was €6 versus €2.89 last year. 38% of the volume in the quarter was used internally for our WAP segment versus 35% last year. The VAP operation in the Faroes is very, very efficient has a great competitive advantage that we have built for 30 years. Going into the Feed segment. What can I say?
Our Feed segment delivered, once again, an impressive result. And we had been blessed with good sourcing of raw material in the quarter, which was all time high for our Q3. Never since 1966, we have produced so much fish oil. EBITDA increased to DKK120 million from DKK111 million last year. The margin was 18% versus 20% last year.
The external sales of fish meal was 7,001 30 tonne in this quarter versus 2,800 last year. And year to date, 22,174 tons of fish meat has been sold externally versus 13,000 last year. Fish feed sold in the Q3 was down, around $38,000 versus $45,000 last year, but 97% are sold internally. Fishmeal and fish oil costs have increased on the back of increased prices of raw materials, which is a development we see globally. We produce all fish meal and most fish oil internally, actually all fish oil, and source pelagic fish and offcuts from local fishermen and processing facilities, which are now producing a lot of pelagic fish in the Faroes.
This is both a driver for strong position for using high quality raw materials, but also differentiation of our position in the market on the taste good biological development in our farming operations. Raw material for feed continues to increase in cost, contributing to general inflation in food production. This trend has a big influence on all proteins and salmon is a very efficient animal on feed conversion rate And it's not doing bad at all in that competition. So coming to the outlook. The short term outlook has been revised down, talking about the supply of salmon volumes.
The unexpected supply increase from Chile the Q3, moved some supply from the Q4 to the Q3. Therefore, we take down our expectations on supply growth in 23, and from Chile in the Q4 'twenty 2. The Chilean drop in the Q4 seemed to be filled with slightly more expected harvest, especially from Norway in the Q4, perhaps on back of the proposed tax amendments. The global supply in the Q4 is therefore unchanged from August expectation, around 1% up from last year. The external global supply in 'twenty three, however, is reduced from around 6% to around 2% to 3%.
This means that 'twenty three will be again a year with a tight balance. So for bucket of Rost, we have revised our volume guidance. In Scotland, we on back of the biological challenges, we revised our harvest volume this year down. And at the moment, everything in Scotland is about getting the operation under control. So volume has secondary influence.
It is the operation itself, which is important. So therefore, we are also taking the stocking slightly down to $9,600,000 in Scotland next year. And we take guiding also down to 30,000 tonne for next year in Scotland. In Faroes, we remain keep the same level on harvest next year. Originally, if we go 5 years back in time when we made the 5 year investment plan, we targeted 5 years ago at 76,000 tonne in 'twenty three.
Now we guide for 68,000. But this is on back that the investments in our hatcheries are around 1 year delayed compared with our plan 5 years ago, 5 years investment plan. So that's the rationale behind this development. On the other hand, we guide up our stocking in Faroes, up to $16,000,000 smolt for next year. On contracts, we are contracted we have contract have signed contracts for 23% of next year's harvest already and expect quite soon to conclude more contracts for next year.
Fish mill and oil are expected to be around 125,000 tonne this year, raw material sourcing sorry, feed production and a 130,000 ton next year. Raw materials for next year, well, quotas are increasing, blue widening especially. So that's a good situation. But on back of a good year, this year, we guide on more or less similar volumes. On developing the company business development, we continue our investment program according to the plan laid at our last Capital Market Day.
We will hold a new Capital Market Day in Scotland in June next year, 6th and 7th June next year, where we can see the investments on the Applegross and the Scottish operation, go take a deeper look into the operation there next year. That's all for now. Thank you very much. And if there are any questions, you are welcome.
Karl Mill, Pareto. One question on the Faroe operation. As you showed, the spot prices are down almost NOK 40 from Q2, but your margin is down less than NOK 30. Could you say something about the reason, is it better price achievement versus the reference price? Or are your costs also significantly down?
And then cost also going forward on the Faroe. Should we assume the very strong level as we saw in Q3? Or are there any changes into the next quarter?
The operation in the Faroes in the 3rd quarter was very strong. There was a good achievement in all farms, all harvested farms, had a very good performance on the cost side. So I guess that's the main driver on the price, we harvested June the whole quarter, more or less, every week. And as you know, we started the quarter at NOK100 in spot price and ended in the '50s. So there's a big variation there.
So I don't have numbers on the deviation. Going forward, we as mentioned earlier, when we went into larger smalts, there were some starting up issues, which mainly impacted us last year and also going into this year. We see now a clear trend that larger smalt grown on this new way has very good biological performance with lower mortality, better growth, lower feed conversion ratio, etcetera. So I expect a strong operation in the Faroes going forward. Christian
Nordback, Kepler Cheuvreux. Last year, we saw accelerated mortality costs in Scotland Q4 versus Q3. And this year, you show that so far, Q4 is looking better. But how should we think about Q4 '22 now versus Q3 in terms of extraordinary mortality cost based on what you know today.
Yes, I already told you most of what I know today about the mortality in October. I think that the trend is better this year, much better this year. That's quite clear. But there are still some grumbling mortality. That's why we had the 774 tonnes of mortality in October versus the 2,400 last year what we have now in place of capacity is quite good compared with what we had.
So even if we had 1 interim vessel during the summer to take down the risk before we had the final solution now in September, which was meant to be in July, we saw that the 3rd quarter was much more impacted than we hoped for. We don't see or we see a risk in Scotland also for next year. But I think we are in a much better situation now with good capacity on freshwater. And that's clearly what we see now in the Q4. So I expect a better development in the Q4 this year, and I hope for a better also even better for next year.
And then by this time of next year, we should also see some impact of how the large malt in Scotland is performing that we will stock in the Q2. But of course, there are also some risks when you talk about next year. Then when you start something we saw in the Faroes that when we started the large smog, there were some issues in the beginning that we now have solved. Of course, we are implementing this also in Scotland from the beginning, so that we can focus on the robustness in front of the size of the fish. This balance is quite important.
And on your biomass, it's down 20% or something year on year now. Is that something we should worry about? Or is that just some seasonal fluctuation randomness.
The biomass is lower. That's both because of the mortalities that we have we have faced. But also, we are stocking slightly less now. We take down our guiding next year to 30. So that's the rationale there.
I just wonder how much of the mortality in Q3 do you think you would have been able to mitigate in sort of a fully invested setup with large smalt and freshwater capacity on full speed.
I am pretty sure that with a high quality robust smalt and with our full mitigation strategy with fresh water, we would be in a much better situation. Of course, the environment in Scotland it's more risky than what we see in Faroes. So there will be always some risk. But with a cycle, 10 to 12 months in Scotland in the marine phase, there will certainly be much, much less fish that will be affected several times as what we see now in Scotland with a 20 or 24 months cycle time. So considerably lower.
Martin Carlin, ABG. What is the expected cost level in Scotland if we exclude the extraordinary mortality costs, for example, if the mortality would normalize, whether then the underlying cost level come down? Or are the remaining fish also carrying a high cost level?
The extraordinary mortality is taken out when the fish dies. So whenever there is some extraordinary which is described as a mortality above a certain trigger, then that fish is the cost of that fish is taken out. So that means that the fish left in the sea should be at a normal price.
But how much of the current, let's say, biomass is impacted or affected by the challenging environmental conditions, but still not defined as extraordinary mortality.
The extraordinary mortality have been on mainly 2 areas. One of them is the same that we saw in the 3rd quarter the 2nd quarter, which is East Loos and Harris. Yes. East Loos and Harris. And this fish is about to be harvested out.
That site is empty, I think it's this week or next week. Then there is one site down in the south, where there are some remaining fish that will continue into even into next year. So that's one area. And then there's one site that will be more or less harvested out later this year. Then there are some areas that have not been impacted.
But they were impacted 2 years ago. So it's not a clear trend that you can say that there are some areas that are clearly out of this. It seems like these algaes or these blooms are coming in different areas. And if you look at the map, I think we have something back in the appendix where we show the areas, you can see that when you look at the whole industry, it is more or less all over. But we clearly see that there are some fish that seems to or at least with ourselves, some farms that have been doing quite good, which have not been impacted at all.
So that could also be that some of the fish seems to be able to handle the challenges. And that could be variances in the robustness of the fish. That could be one of the drivers. Or if we have been better to mitigate the risk with freshwater clearance of the gilts, which might have then solved the issue at that site. But we have not had the capacity to do the same on all sites, which can lead to some fish being impacted.
Thank you very much.