In this presentation, we will go through the summary of the quarter. We will look into market and sales for Baccafrost and for the SAU market in general. We will look at the segment information and we will have a financial update from Hakan Jakobsen. And then finally, we will look for the outlook for the quarter and take questions from you. In the Q2, Baccafrost harvested more fish than last year, 25% more fish was harvested in the quarter.
In the Faroe Islands, 17,561 tons compared with 12,941 tonnes last year. In Scotland, We harvested 10,634 compared with 7,937 last year. Feed sales also increased 23% to 27,272 compared with 22,121 last year. Raw material sourcing for Hafsprung declined to 59,290 tonnes compared with 120,005 12 tonnes last year. The revenues for the group was very high, an indicator on a high activity in the quarter.
I think this is probably the largest revenue for Bakkerfos Group in the quarter, DKK1.6 million, DKK17 million in the 2nd quarter compared with DKK1.134 billion last year. The operational EBIT amounted to $407,500,000 compared with $181,900,000 last year. The cash flow from operations was €532,000,000 compared with €111,000,000 last year. And backelfrost had positive results from all segments. If you look at the summary of the quarter, we see that the farming margin for the farming and WAP combined And the Faroe Islands increased from NOK15.34 up to NOK26.93 per kilo.
For Scotland, the margin also increased from 5.36% last year to 6.75% this year. The VAP margin, however, dropped due to the market changes, the raw material price for raw materials from NOK 11.06 per kilo to 1.53. The FAF margin dropped slightly from 18.6% to 16.5%. If you look into the markets and sales, we see that our sales changed somewhat. We reduced the sale in Western Europe from 70 2% last year overall to 59% this year.
And the changes was moved or some volumes was moved to Asia and to North America. We see that North America increased from 13% to 18%, and we see that Asia drops from 15% to 14%. But from Faroes, There's a drop in the fresh supply sorry, our total supply from 19% to 13% And in Scotland, from it increases from 8% to 15%. Eastern Europe increases, especially from the Faroe Islands, from 1% to 13%. On the fresh sales, we see also a drop in Western Europe from 66% to 56%.
And this is mainly due to the changes in Eastern Europe, which goes up to 10% of the total and 16% of the Faroeys sales. The VAP share in this quarter was 28% compared with 50% last year, a big change. The sema price in the quarter was a bit up and down, started around 70 in beginning of the quarter, dropped slightly and then up to 75. And then by the end of the quarter, in the end of the 50s. So huge changes in the quarter.
But the average price year on year increased NOK 3.96 from NOK 59.36 to NOK 63.31 per kilo salmon and quarter on quarter from 54, 48 to 63,030, 31. On the next page, we see the development in harvested and sold quantity by Origin. The development in harvested quantity of salmon into the markets, so show an increase of 1% in the quarter. Volumes dropped significantly in Chile from 158,000 to 135,000 tonnes. This balanced out with the growth in other regions, especially Norway and U.
K. And due to the big demand in the market, Inventories were reduced by 27,000 tonnes in the quarter compared with an increase of 16,000 tonnes in the same period last year. The difference in the Movements of inventories is 43,000 tonnes, which is an indicator of the strong market. Average weight of harvested fish from 2 of the big suppliers, Norway and Chile. Norway, The average weight of harvested fish was 4.35, flat from last year and in Chile 4.4 kilos.
So slightly less availability of large fish. If you look at The markets, we see that the supply into the markets increased 9%. And this is the inventory movements, which is which caused this difference. And we see that there is a strong development, especially in U. S, which increased 22%.
That's an increase of 26,800 tonnes of salmon in this quarter. Also Europe, which is the largest market, increased 2% Russia, 46%. We see it, especially by the end of the quarter and into the Q3, some indications of lockdown in Asia, which has hampered the market by the end of the quarter and into the Q3. We see also overall that the Chinese market has dropped in this quarter by around 20%. If you look at the next slide, there is an overview of the expected development over the next couple of quarters.
We expect a very tight market going forward for the next couple of quarters. And overall drop of supply compared with last year, no growth. And that's mainly due to the fact that in Chile, there is less availability of fish, less biomass, and that will cause a reduction of supplies from Chile. And even if European suppliers are increasing somewhat. The overall volume over the next couple of quarters and also into the first half of next year will not crease, but be on the negative side of change compared with the year before.
So a tighter market going forward. If you look at the segment information, we see in The Faroe Islands, the volume in Faroe Islands increased 36% from 12,941 tonnes to 17,561. The spread is 14% from North, 75% from West and 11% from South. The fish in Fonigshoy harvested in this quarter was 9,800 tonnes, so that's the biggest single Farm harvested this quarter came out 5.3 kilo with very good numbers. So this is a big positive impact on the numbers in this quarter.
In Scotland, the volume increased also 34% from 7 dollars 1937 to 10,634 tonnes. This is spread on many farms, more than 20 farms harvested. The average weight in the Faroe Islands dropped from 5.4 to 4.9 kilo in the quarter. This is mainly due to the fact that we harvested 4.1 kilo in Vois. We started a bit early to harvest due to the market conditions and also that we have a lot of fish from this site for the second half of the year with limited harvesting capacity in the factory.
The average weight in Scotland was more or less flat or 100 grams up from 4.4 to 4.5 kilos. The small transfer in the quarter in Faroes from 2,900,000 to 3,200,000 pieces, 8% up and Scotland from 2,800,000 to 2.1, 27% down. The average weight in the Faroes increased significantly, 48%, from 2.86 from to 4.22 gram. In Scotland, flat from 76 gram to 77 gram. And the temperature in the waters in Faroes were more or less in line with last year, slightly down.
If you look at the margin, We see that, especially in Faroes, there is a huge increase from 86,000,000 to 343,000,000, 300% up. The margin was 36% compared with 15% and the revenue, 67% up from €574,000,000 to 961,000,000 And this is, of course, mainly due to the fact that the price increased significantly. Essen Scotland also increased margin 84 percent up to DKK 53,000,000 compared to 29,000,000 and the margin up 9%, the revenue up to DKK559 1,000,000. On the next page, there is an overview on the performance in the regions. And in the Faroe Islands, The key performing indicators have developed good in the quarter.
The TGC, which is the growth on fish, was very, very good, 3.2 in average for all harvested fish, which is more or less the same as last year, but stable on a good high level. The FCR, which is the feed conversion rate, improved compared with last year from 1.1 down to 1.03 in average for all harvested fish, which is very, very good. And the cost in the Faroe Islands came slightly down around NOK1, which is the pure farming cost from last year. We fed the fish 18,500 tonne in the quarter feed use, which is 24% up compared with the same quarter last year. So a very good biological development in the quarter, strong key performance indicators here in the Faroe Islands.
In Scotland, we still struggle with small weights. It would take time for us to increase the weight of smalls. But if you look at the same key performing indicators like growth, fee conversion rates, etcetera, we see that there is some improvements, 5% improvement on growth compared with last year. The TGC is 2.64 The FCR improved 4%, down to 1.11%, which is very good. The cost dropped the farming cost dropped slightly, NOK 35 per kilo.
The overall cost dropped more, but the farming cost was 35% early down. The feed consumption in Scotland was down mainly due to the fact that we have reduced the biomass by the end of the quarter, so down by 15%. We are good in line with our plans with integration. We are now using all the FEED from or not all, but the majority of the FEED is from Hafsprung, which is, of course, also which is creating a good operation, both with Husbrunn and also for unharvested fish. And we are aligning and simplifying systems, structure, practices to enable best practice.
We are rolling out the so called fresh approach, integration strategy, which will simplify and strengthen our operations. And I am confident that the smarter farming model that we try to implement, will our next year show significant improvements in the operations in Scotland. If you look at the VAP, Value Added Products, We see lower activity. There were high prices on fresh salmon and we used this opportunity to improve the overall value for the company. So the revenues in the quarter It was down compared with last year, €259,000,000 compared with €308,000,000 The volumes were 33% down compared with 16% down on revenues.
The EBIT was 89% down from DKK 49,000,000 to DKK 5,000,000. And the operational EBIT, the margin was NOK 1.13 per kilo. And the share of raw materials used for WAP was 28% compared with 50% last year. If you look at the FAF segment, we see an improved margin of DKK57 1,000,000 and a margin on 17%. So this is mainly due to the increased activity in the Feed division, because we see that The raw material source for fish meal is significantly down, 52% down and external fish meal sold, and this is mainly from inventories, is slightly up, 10% up to 2,961 tonnes.
On the next page, overview on the feet. We see an increase of 22% up to 27,272 tonnes. The majority of the feed is sold internally. The external feed sales decreased from 5,962 tonnes down to 850 6 tonnes. Obviously, the market fluctuations on raw materials, slightly increase in raw material prices compared with the quarters before.
Now Agne will go through the financials and ESG.
Thank you, Rein. As Rein has mentioned, the positive development on the prices have had a positive impact on our financials, but also the volume growth that we have seen in this quarter. So revenue increased by 43% to 1,000,000,000 €618,000,000 in this quarter. And the operational EBIT increased by 2 24% and amounted to €407,000,000 in this quarter. And the main contribution is the Faroe East Farming segment, which has tripled its operational EBIT, but also a strong increase in the Scottish Farming segment and some increase in the FAF segment as well.
The VIP segment was however lower on operational EBIT compared to the same quarter last year. Fair value adjustments in this quarter were lower than in Q2 last year. It amounted to 176 €1,000,000 The main drivers behind that are changes in the size distribution and the biomass at sea, where we, especially in Scotland, have slightly higher time to harvest for the biomass. We Paid DKK41 1,000,000 in this quarter in revenue tax and DKK102 1,000,000 in corporate taxes. And the profit after tax was reduced from €472,000,000 to €428,000,000 Operation EBIT margins increased from 16% to 25.2%.
And this was amongst our better quarters for many years. It's one of the strongest quarters that we have had over the past 5 years in terms of operational EBIT and the best 2nd quarter that we have had since 2018. For the half year, the first half year of this year, the total Operational EBIT amount to SEK631 1,000,000 and adjusted earnings per share accumulated in the first half of the year amount to NOK7.75. If we look at our balance sheet, which is still very strong, Our intangible assets amount to slightly less than SEK4.5 billion. And our property, plant and equipment increased by NOK329 1,000,000 and amount to euros 4,550,000,000 Our biological assets amount to slightly less of SEK2.5 billion and inventory increased by SEK33 1,000,000 to SEK809 1,000,000 in this quarter.
Receivables have increased by €129,000,000 to €619,000,000 Cash and cash equivalents have also increased by 86,000,000 and now amount to 553,000,000 Equity is slightly less than SEK9.4 billion, an increase by SEK6 SEK67 1,000,000 in this quarter and equity ratio is 67%. Cash flow from operations in this quarter increased compared to last the same quarter last year from SEK111,000,000 to SEK522,000,000 And cash flow from investments were minus €245,000,000 and cash flow from financing minus 107,000,000. Net cash at the end of this quarter were 179,000,000 And if we look at the net interest bearing debt, we have reduced the net interest bearing debt by NOK 36,000,000 throughout the quarter. We have made investments of of NOK245 1,000,000 and paid dividend also in this quarter amounting to NOK216 1,000,000. But our Cash flow from operating activities amounted to minus SEK400 1,000,000 have reduced the net interest bearing debt to SEK448 1,000,000 and the same goes with changes in working capital, which has reduced with further €49,000,000 so that we end up with a net interest bearing debt of $1,903,000,000 by the end of the quarter.
We still have undrawn significant undrawn credit facilities. Our bank facilities are the same as the ones that we secured by the end of 2019. And we have undrawn credit facilities amounting to €1,523,000,000 by the end of this quarter. And on top of that, we have an accordion option of €150,000,000 And finally from me, some main events on ESG that has occurred during this quarter. We have now published our 4th sustainability report.
And what makes this report special compared Previously is that it now includes the Scottish Ham company as well, so that we can increase the transparency across the entire group and provide a better picture of how we progress on the ESG agenda as a group. In this quarter, we also made some improvements in regards to the capacity that we have for in the farming service operation in Scotland As we acquired a sister ship of our farming supply ship here in the Faroes, Martin, which we use for mechanical delousing, We acquired the sister ship and it is intended to be put into operation in Scotland and is being equipped now with a new technology for mechanical delousing, which we have high hopes for, which we expect can improve the fish welfare even more and reduce mortality when we do mechanical sea life treatment in Scotland. The ship is called Pakenes and will be deployed in operation in Scotland soon. And finally, Hafsbrum was recognized in this quarter with Best aquaculture practice certification, BAP, which is very important now where we supply increased volumes of feed to our Scottish operation. In Scotland, we are 4 star BAP certified as the 1st European salmon farmer.
So having Hafsprud and BAP certified is an important step forward. And with that, I will leave the outlook to you, Hif, Rein.
The Outlook for the global harvest of salmon in the market is very tight. We expect a reduction of Global Harvest in the 3rd quarter and also in the second half of 2020. So the market is expected to be tight, especially from the supply side. When we look at our own operations, we expect 106,000 tonnes of total harvest from Baccafrost Group, same as we have announced earlier. We expect to release $4,500,000 smolts in the Faroes and $11,000,000 in Scotland.
On contracts, 31% of our sales for this year have been contracted. We have a strategy to allocate around 40% of expected volumes on contracts at any time. And in Hafsbrun, we expect to sell 120,000 tonnes of feet. It might be slightly more depending on the growth in the second half of the year, but it has been good over the summer. The business development for Baccafrost is focused on the growth strategy.
The focus is to reduce the risk to secure a healthy and sustainable growth for the group. And We see a lot of possibilities in our continuous journey. And we will focus on this on our Capital Market Day, on our upcoming Capital Market Day on the 14th September, where we will look into our plans until 2026 and go through the different options, especially with focus on these plans and investments and how we can grow our operations sustainably and reduce our risk. So that will be the main agenda on the Capital Market Day, which will be shortly. So with this, I will open up for questions.
You have to unmute your microphone if and then just go ahead with your question.
It's Alex Sorgen from DNB. In terms of the smalt transfer, you're Transferring substantially larger smalt into the sea at the moment, could you make some comments on how that the initial reaction Has been in terms of sea growth?
Yes. As you know, we have increased our capacity on large small significantly over the last couple of years and we see that now in our numbers. We have, in this quarter, nearly doubled the weight of the smalt. Some of the large groups that were Transferred last year were harvested less than 1 year after transfer. So we have so far, we have seen a positive impact on mortality, positive impact on growth, TGC and also a positive impact on fee conversion rate.
So, so far, there has been a positive impact on all our KPIs and as expected, a reduction of the risk of our operations.
Okay. Thank you. Can you also make some comments in terms of your highest paying markets
Well, As you know, we try to differentiate our products and produce a salmon, which is with higher not with the lowest feet costs, but highest quality of raw materials in the feet. And we try to and need to market this fish as a premium in the market. And in general, we obtained a premium in the market. But of course, it depends on the market conditions, how those are and especially when during the COVID-nineteen, this has had an impact. This was a lower impact in the Q2.
And thus the COVID-nineteen are effects are less, We see a positive impact on our availability to obtain a larger value on our sales in all markets.
Okay. Thank you. So final question for me. Can you make a comment on the working capital buildup in the
Well, We are building up some more biomass due to the fact that the fish grows more and we have more fish in the water. So that's where we are building more working capital, especially.
Okay, thank you.
Anyone else?
Hey, Christian O'Brien speaking, Kepler Cheuvreux. I have a quick question on Scotland. In Q3 last year, you recorded extraordinary mortalities. How is the autumn looking right now for you in Scotland? And how is the cost side looking there, you think, over the Q3, Q4 period?
Well, this year, we have not seen any of these issues as we saw last year. Hopefully, everything will become going forward. So of course, that's positive. The big change in Scotland will be when we are releasing larger smalts. That is the big driver on reduction of costs for our operations in Scotland.
And that will take some time. We have, however, now stocked some fish in our new RAS systems in Applegross. So there is Some small improvements going to be seen next year, but the big change will be when we have the big capacity up running. We have broken ground now in Scotland for the RAS development. So that capacity will start to be available in 1.5 years from now.
So it will take another 3 years 3 to 4 years before We will see the big game changer in Scotland. So the costs in general are higher in Scotland. We focus on making taking the low hanging fruits. So some small changes, but not a big impact before these 3 to 4 years.
Thank you. On transport costs, you recall in your presentation that they are still higher than pre COVID terms. Can you do something on sort of improving the medium term? Or what are you thinking regarding this here? I saw some news regarding chartering in an airplane and these things.
Well, the costs on air transport are still high. The initiative that you referred to on the airplane is mainly But we as we have as you know, we have operations our own operations in U. S. We see significant possibility to improve the freshness of the product by harvesting fish today, supplying that fish into the market already tomorrow and even with slightly lower costs done today. So the impact will be mainly on we think that instead of Supplying 3 days old fish, we can supply 24 hours old fish, so more or less close to Live Fish into the market.
So that's quite important. We see also that with this initiative, we can reduce the CO2 impact from the air transport. We can halve the CO2 impact because as we have our operations on the other side, we can reduce the ice that we transport. We can reduce traveling from farrows by ship and by truck. So we have calculated close to 50% reduction on CO2, at less costs and fresher fish.
So this is a project that we hope will have many different aspects. And it works especially for the East Coast of the U. S. As we have our operations there and can manage the whole value chain with our own trucks and delivery directly to customers. Any other question?
Karlan from ABG Sundal Collier. It seems that it's going in or you mentioned the improvements and potential for improvements in Scotland. But it also seems that the operations and performance at the Faroes It's better than a year ago. Could you could this leave some potential for lower costs in the second half of this year? Or are there other cost drivers moving in the other direction?
Yes. In Faroes, we are in a good development with low free conversion rate, low and good growth. Those numbers are quite good. We see also a potential that we over the next year or 2, as we see as we will see the big effect from large malt that we can reduce the cost further as the risk picture in general will improve. That should have some positive impact.
But in general, We have good numbers now in Faroes. We had also some issues last year. As you remember, we lost some fish. This year, We have not had any kind of incidents, and of course, we should not. We have in Kvaalpa, we have upgraded and install totally new equipment.
And we have probably done the strongest farm that we have ever seen in order to mitigate that risk. So That should move things in the right directions. But I would recommend that you keep the same numbers on the cost side in your calculations.
Sounds good. And then could you please add Some details on the new mechanical delousing system that you are installing on the new supply vessel. Is it Entirely new? Or have you been using this system at the Faroe Islands?
We are using it in the Faroe Islands as well. So we are using the same technology in this boat as what we are doing in Faroes. But this is actually also used in Scotland. So We have results and people trained for this, both in Faroes and in Scotland. But we need more capacity.
And We see also that in general, when we have our own people handling this kind of complex equipment. It is important that we use best practice and also the knowledge that we get from one farm to another. And we hope that, that can have a positive impact also in Scotland, when we will start using our own boats instead of only relying on external boats.
Okay. Thank you.
Any other question?
It's Alex Jones from Bank of America. Can you maybe comment on the Feed division and how you think about the margin outlook into the second half of the year?
Yes, I think that the biggest change right now in the Feed division is that we see a significant increase of the operation. And this is mainly due to the upscaling of production to our Scottish operation. As you remember, we had contracts in Scotland that we had to respect. And Now these contracts are fulfilled. So now we see a significant uplift in the production at Hafstrum to Scotland.
And that has a positive impact on the cost because the capacity utilization is much higher. So that is, in general, positive for the cost right, in the feeder division and the utilization of the fixed costs there. The market outlook for raw materials in general are tight. It seems like costs are still high on raw materials. So at the moment, our best guess is that they will remain on the same level, on the same high level as they are at the moment.
And our intention at the moment is to remain with the same recipe that we are using for our salmon, both in Faroes now and in Scotland, the same with a high utilization with high inclusion of marine raw materials because this is one of the fundamental drivers for the superior quality fish that we provide with high omega-three and our very healthy ingredients of raw materials from marine sources. Is that okay, Alex? Or anything else you Yes.
That's great. Maybe just one more question on the farming weights In the Faroes in the second half of the year, do you expect to go back towards more normal levels? Or should we expect them to stay a bit lower than usual?
Well, right now, we have slightly lower weights. We have a bigger biomass at the moment, and we are increasing the capacity here in the processing site in Libra right now, as we big. So it's important that we also have some contingency on the processing side. So we are doing that at the moment. The markets in the Q2 were strong, so we used that.
But there will be at least here in the Faroe, there will be at least one site that we will harvest at lower average weight in the 3rd quarter, which will impact the average weight in the Faroe Islands. But our strategy remains the same that we want to produce large fish and there will be larger fish from other sites. So it is a bit up and down. And if you look at the quarters, there is a slight variation in the average weight. So it's not a change of strategy.
It's just that we have to adapt to the market conditions and of course, the actual picture in the processing in our operations.
Great. Thank
you. Very good. Is there any final question or Are you good? Very good. Thank you very much.