Thank you for taking time to watch this Q1 presentation for Icelandic Salmon. My name is Bjørn Hembre, and with me today I have our CFO, Róbert Róbertsson. After the presentation there will be a Q&A session where you can ask questions by raising your virtual hand or typing your questions in the chat. A short overview of the company: Icelandic Salmon is a company listed on the Euronext Growth in Oslo and at the Nasdaq First North list in Reykjavík. The company is the sole owner of Arnarlax ehf, which performs all the operational activities in the company on Iceland. We are present throughout the value chain. We have our own smolt production with capacity that is sufficient for 25,000 to 30,000 tons of harvested volume.
We have our farming operations in three fjords in the Westfjords of Iceland with a total Maximum Allowable Biomass of 23,700 tons. All production there is ASC certified. We have our own harvesting plant in Bíldudalur in the Westfjords with a capacity of 30,000 tons, that harvest plant is BRCGS certified, which is a food safety standard. We also have our own sales team that do all the sales in the global and domestic market. If we take a closer look at the highlights of the quarter one was 1/4 where we EBIT-wise ended close to break-even with a negative EBIT of EUR 100,000, improving from -EUR 3 million in quarter one 2025. Prices in quarter one 2026 were significantly lower than in quarter one 2025. The harvested volume in the quarter was 3,700 tons compared to 1,100 tons in quarter one 2025.
Harvest was from the 2024 generation in the quarter. There was a satisfying performance on biology in sea, but still some challenges related to low winter temperatures. The temperatures were higher than normal in the first half of the quarter but decreased to low levels at the second part of the quarter. Due to BKD, Bacterial Kidney Disease, we harvested out of site over autumn 2024 generation at a low average rate to safeguard fish welfare and manage winter risk. Due to the low weight, the cost of production became high on the fish group and is reflected in the financial results. The biomass in sea was 27% higher at the end of Q1 2026 compared to Q1 2025. The market price in the quarter was weak compared to previous years and/or price achievements towards market price not as good as usual.
Since the smaller fish mainly goes into the European market, where our extra logistic cost into the market towards Norway, Faroe Islands, and U.K. has a negative effect on our FOB price achievement. The share of downgraded fish in the quarter was 14.8%. We see that there are still room for biological improvements during wintertime, where extra winter wound vaccine and larger size of the fish going into the first winter in sea are important mitigating measures. We also have sites that are performing very good through the winter, and especially our spring 2025 generation, where we saw a mortality in the quarter of 0.34%. On the other hand, we also saw a good performance cost-wise in all other parts of the value chain with good utilization of capacities, strongly affected also by our cost-saving program that was implemented in Q3 2025.
Smolt production was operating well, and we are in line of putting out the planned amount of smolts for 2026. I like to mention that none of the fish groups we have in our smolt facilities today have ever been detected with Pox virus. This means that we now have that under good control, and this virus has, over the last year, caused us major challenges in the smolt production. I will then give the word to our CFO, Róbert Róbertsson. There you go, Róbert.
Thank you, Bjørn. Good morning, everyone. This is the first of two slides providing a high-level overview of the group's balance sheet, which remained broadly stable quarter-over-quarter. Total assets decreased by EUR 5 million, mainly due to a reduction in current assets. This reflects the harvest of approximately 3,700 tons and a negative fair value adjustment of EUR 2.2 million. As communicated in previous updates, under the amended loan agreement, both the interest coverage and leverage covenants are waived for 2026. The remaining financial covenants are minimum liquidity of EUR 10 million and minimum equity of 35%. Available liquidity at the end of the quarter amounted to EUR 40 million and the equity ratio at 44%. We expect a limited pressure on covenant compliance to continue throughout 2026. Total liabilities were unchanged from previous quarter at EUR 153 million, and net interest-bearing debt, including leases, stood at EUR 131 million.
On the next slide, we present the development in net interest-bearing debt during the quarter, and it increased by EUR 1.6 million, while the isolated increase in net debt was EUR 2.2 million. EBITDA reached EUR 3.2 million in the first quarter. The taxes paid during the quarter amounted to EUR 2.2 million, and they are production taxes for harvested volume in the second half of last year, 2025. The negative net investment in working capital amounted to EUR 800,000. The first quarter is typically the slowest growth period in sea, with lower temperatures, reduced feeding activity, and consequently lower investment in biological assets and working capital compared to the rest of the year. Net CapEx investment amounted to EUR 500,000, which is below expectations. This is due to timing of investments within 2026. However, we keep the guidance for CapEx investments at EUR 4.8 million for full year 2026. Net interest paid amounted to EUR 2.2 million.
With that, we conclude the group's financials, and I hand the word back over to you, Bjørn.
Thank you, Róbert. If you look at the sales and market update, there was a slight positive development in market prices from Q4 to Q1. Compared to the Q1 2025 price, the prices were down with EUR 0.66 between years volume weighted for our sold volumes in those quarters. The price achievement was affected by that we had a big share of small sizes that mainly goes into the European market, where we mentioned logistic disadvantage is reflected in our FOB price achievement. In addition, prices on smaller sizes were lower during the quarter than on the bigger sizes. The volume sold to North America decreased from 15% in Q4 to 10% in Q1. This was partly driven by tariffs into the U.S. market, but mainly due to the lower share of 6 kl+ fish harvested in the volume.
It seems like the general low prices in Q3 compensated for the tariffs to the U.S. market. With higher prices in Q4 and Q1, we see a volume effect of the tariffs. The access to 6 kl+ fish also reduced the volumes to the Asian market from 16% in Q4 to 14% in Q1. That said, we sold 48% of all our 6 kl+ fish to the North American and Asian market. We also see a positive development that China now is also buying more 6 kl- fish for use in industrial production. The contract share ended at 11% for the quarter and was a positive contribution to our price achievement. Our sales department did in Q1 make an agreement for trading fish for a third party for the year of 2026, which will be a good contribution to our portfolio.
It will secure our ability to supply fish weekly to our customers and create some profit for the sales department. It should be mentioned that this is a limited volume but an important strategic move for the only salmon farmer in Iceland that has our own sales department. Let's look into the future and the outlook as we see it. We keep the guided volume for 2026 at 21,300 tons. We do still see the potential for harvesting 26,000 tons on the existing licenses, and most CapEx is made to reach that goal. We foresee a slight cost increase in Q2 2026 due to some biological challenges experienced in the beginning of the quarter on our spring 2024 generation that will be harvested out in the second quarter this year. We expect then a lower cost into Q3 and rest of the year.
Cost reduction is driven by better biological performance on the 2025 generation that we will start to harvest in July, and also the previously mentioned cost-saving program and a general better utilization of capacities with increasing volumes. We have at the end of Q1 2026, 26% higher biomass in sea compared to the end of Q1 2025. This makes the foundation for better MAB utilization for 2026 than previous years, and this has a good effect taking the fixed cost per kilo down. The contract share for the year is expected to be 10%. The aquaculture license we have of 10,000 tons was renewed in May 2026 and is valid for 16 more years.
There is continued work on the 10,000-ton license application we have in Ísafjarðardjúp , where the risk assessment for sailing is now being finalized, and that is the final step towards approval for that license. This license was given out in 2024 but revoked due to this missing risk assessment of sailing, among other things that are now in place. The process with the new aquaculture law is still going. The law has been approved by the sitting government and is sent over to the Industrial Affairs Committee in Alþingi for further process there. There is a good dialogue with the authorities and the industry about the content of the law with the ambition to create a sustainable growth in our industry going forward on compatible terms with other farming nations. The aim is to have the law approved in Alþingi before the summer.
We see many positive things in the law proposal and also things that are at this point unclear since there are many paragraphs that will be decided in regulation after the law is approved. Shortly summarized, we expect more compatible terms, potential for growth, and also more surveillance from the authorities. The last thing is to strengthen and secure a sustainable growth of the industry that the government is aiming for. I will thank you for listening to our presentation. We will now move directly into the Q&A session that Róbert will control. Please raise your virtual hand or type your question in the chat, and we will answer as good as we can. Do you follow up questions? [crosstalk]
We have a first question from Ole Trøan. Do you still expect a cost in box at EUR 6 kl for the second half of 2026? I think, as we have indicated in the presentation, the cost level will be slightly higher quarter-over-quarter from Q1 to Q2, but we expect the cost level to go down in the second half of the year. Yngve asks if Alþingi approves the new law before summer, what impact can it have on your volumes in years to come?
I could maybe answer that question. As it looks now, it could give some more flexibility in the utilization of the Maximum Allowable Biomass we have. It's hard to put exact numbers on this since we don't know fully the framework, but the intention of the law, as stated by the government, is to have a sustainable growth. We, of course, expect a positive effect on the volumes to come, but hard to put exact numbers, and that will, of course, be a topic for future guidance when we know the framework exactly.
Yngve asks, what is the planned stocking volumes in 2026 versus the volumes in 2025?
The number of smolts put into sea this year will be approximately the same number as last year, but with a slightly different profile on the average weights, where we have focused on the size of the smolts at the end of smolt season to secure that we have sufficient size on the fish going into the first winter in sea. Number-wise, we will be at approximately the same level, but with bigger fish at the end of smolt season, so with an increased output biomass. With also the aim to move the profile of the harvesting to more harvest in the first half of the year as a consequence of this output plan.
Yngve asks, any ongoing cooperation with the other land-based players to get access to post-smolt in the near future? Bjørn, maybe you can answer that.
Yes, we have a good dialogue with all farmers. We know that in the land-based players, as you say, Yngve, there are building up capacity for post-smolt production. We have an open dialogue about that, and that is an obvious potential for access to more smolts if we see a potential for growth. The alternative is, of course, to extend production in our existing facilities. That will be like an evaluation we are doing going forward when we see the potential for growth we have on our existing facilities, both licenses and access to land, to extend the smolt production. That will be kind of a continuous evaluation going forward when we see the actual potential for growth.
The second part of the question, I assume with the MAB regulations, you can have some nice effect volume-wise.
I agree with that is, of course, the intention with the law. The sitting government has in their program that they want growth in the economy in Iceland, aquaculture is maybe their main tool to get this economic growth. That means that the law needs to prepare the ground for better MAB utilization and further growth in the fjords where we are operating.
Oh yeah, I don't see any further questions. There are no raised hands. Feel free to reach out after the meeting. You can send me or Bjørn an email if there are any further speculations or questions that we didn't cover here.
Yeah. I think we conclude for this presentation today and the Q&A, and wish you all a great day. Thank you for attending.
Thank you.