Thank you, Hjörtur. Ladies and gentlemen, welcome to this quarter three presentation for Icelandic Salmon. Thank you all for taking the time to join us on this event, and also welcome to everyone that is watching us on webcast. I would like to thank Arion Bank to let us use this beautiful room for the presentation. This is the first time we have a live presentation on Iceland, and that is a natural consequence of being listed on Nasdaq First North in Reykjavík this autumn. After the presentation, there will be a Q&A session that will be open for questions from the audience, and it will also be possible to send questions for those who are watching on webcast to the mail address, questions@arnarlax.is.
Icelandic Salmon is listed on the Euronext Growth market in Oslo, and now also listed at Nasdaq First North in Reykjavík. The company is the sole owner of Arnarlax ehf. All operational activities in the groups is performed by Arnarlax ehf. Arnarlax Sustainable Icelandic Salmon is our common brand for our operation and for our products out in the market. Currently, we have four smolt facilities with a capacity of 7 to 8 million smolts, depending on the size of the smolts. We have operations in seawater on seven sites in the Westfjords of Iceland, where we have a total maximum allowed biomass of 23,700 tons, and all our production is ASC certified. We do our harvesting at our harvest plant in Bíldudalur, where we have a yearly capacity of 30,000 tons.
The production there is BRC certified. And then we sell all our fish out in the market with our sales team that is located here in Reykjavík to the domestic and the global markets. A summary of quarter three. After the harvesting stop in quarter two, we came back in quarter three with a stable production. We harvested 4,040 tons, up from 3,800 tons in quarter three 2022. We harvested from our autumn fish of the 2021 generation, and we will finalize that in quarter four, and then start up to harvest from the spring 2022 generation. The company had revenues in the quarter of EUR 42 million, up from EUR 34 million in quarter three 2022.
The EBIT for the quarter was EUR 2.95 million, and that gave an EBIT per kilo, euro per kilo of EUR 0.73. The cost level per kilo was high due to low harvest volumes in the beginning of the quarter and a higher production cost. Quality smolt is important for salmon production, and we have invested significant amounts into smolt production, and our smolt release continue in quarter three. Year to date, we have an average smolt weight of 232 grams, which is up 36% compared to 2022. The biggest smolt groups was 700 grams, and we see that the smolt quality and the survival rate of the smolts after release have been very good.
So we see a good effect of the focus we have had on investment in smolt and operational improvements in our smolt production. Our people in sales have done a great job. Market price was down compared to first half 2023, but we see that we have a good price achievement compared to the market. And in the quarter, Icelandic Salmon was listed at Nasdaq First North here in Iceland, in addition to the listing in Euronext in Oslo. We received a good attention for that, and the listing was done in Bíldudalur in the Westfjords the day after we had our Capital Markets Day in September. Also, the Capital Market s Day got good attendance, and we think it was a good success. An update on the licenses.
So we have the 10,000-ton application in Ísafjörður that is still in process. We have been waiting for a risk assessment for the sailing routes there. That risk assessment is now done, and we are expecting to have the licenses issued in near future. When it comes to the license application of 4,500 tons in Arnarfjörður and expansion of the sites there, that is still a work in progress. And we are not sure when this will be issued, but that is still a work in progress.
For our 1,000-ton application for our smolt plant, Gileyri, that is now advertised by the authorities, and it will be out for a hearing for a month, and we expect it to be issued after that. An update on the sales and marketing. We still see a strong interest for Icelandic salmon in the market. The product is known for its high quality and sustainability features. The carbon footprint with boat transport to the American market gives a 95% reduction compared to flights, and that's why we have a strong focus on the American market. In quarter three, we sold 23% of our production to the American market, which is slightly higher than quarter three, 2022.
Our contract share was during the quarter 6%, and that gave a positive contribution to the price achievement. I will then give the word to our Chief Financial Officer, Jónas Heiðar Birgisson, for a financial update. Thank you so far.
Thank you, Bjørn, and good morning, everybody. I'm happy to stand here in Arion Bank's facility and briefly present the financial position for Icelandic Salmon as of end of the third quarter. Now, during the third quarter, the group's assets increased by 15% within the period and were mainly driven by increase in the biological assets in sea by EUR 12 million, and additional increase of fair value of the biological assets by EUR 6 million. The group's trade receivables balance increased by EUR 13 million from the end of the second quarter, but there was a relatively low harvesting during the second quarter that had an impact on the balance at the beginning of the third.
Now, on the liability side, there was a 13% increase that was mainly driven by a higher feed consumption and growth in sea, and also influenced by increased interest-bearing debts during the period, along with investments. Now, despite the decrease in the group's equity ratio, it remains strong at 63% at the end of the third quarter, and the group continues to maintain a strong financial position and is compliant to all its covenants. Now, in addition to our financial updates, I'm pleased to announce that we have successfully secured a EUR 100 million sustainable linked credit facility with a three-year tenure, which also includes an option of a two one-year extension. This achievement was made possible with a good collaboration with DNB and Arion Bank, and a new addition to our team, Danske Bank.
We initially aimed to have the refinancing completed before end of the third quarter, but that was extended until beginning of November, when we signed the facility agreement with the banks. The facility agreement comprises of a term loan facility, revolving facility, and an overdraft facility. Now, we value the ongoing support from DNB and Arion Bank, both of which that have played a vital role in our growth projects through the years. And we are also excited about the new partnership with Danske Bank, and we believe that will be a strong addition to our operation, and we look forward to working with them in the years to come. Now, back to our interest-bearing debts, including lease liability.
At the end of the second quarter, our interest-bearing debt amounted for EUR 44 million and had decreased by EUR 19 million from a year beginning. We see an increase of the interest-bearing debt within the third quarter, mainly driven by investments in seawater and freshwater equipments, and our working capital was negative due to increase in our accounts receivables within the period. Also, just to provide some perspective of our year-to-date activities, the group has committed EUR 19 million in investments within the year, and with a primary focus on seawater equipments and smolt facilities. Now, I've finalized my brief overview of the financial position. I'll give the word back to you, Bjørn. Thank you.
Thank you, Jónas. I will now share some concluding remarks, and I will start with the outlook for the industry, salmon farming on Iceland. The Ministry of Food, Fisheries and Agriculture have proposed a new strategy for salmon farming in Iceland. That includes traditional salmon farming, ocean farming, and land-based farming. The proposal came in October this year. There is been a hearing process now until fourth of November, and it's expected that the new law will be proposed in quarter one 2024, and that there is a conclusion of a new law in Althingi in the first half this year. Potential growth is proposed to be built around measurements for mortality, escapes, and lice.
How this system will work is not clear yet, but it seems to be clear that it could work both towards growth and reduced - or reduced production, dependent on the performance towards the KPIs. The ministry have also proposed that there should be just one farmer in each fjord to have a clear lines for the responsibilities in the operation. We are pleased to see that the authorities are taking such holistic approach to salmon farming in Iceland. We share the view that our industry has a great potential and that it should be well-regulated. We have been and will continue to work closely with authorities, local communities, research and business organization to find good and balanced way forward. And let me give you an update on our operation.
During the beginning of fourth quarter, we were reminded that we are working in nature and with biology, and that, nature has its own way. We experienced biological challenges in Tálknafjörður, threatening the health and well-being of our fish. This was due to lice. The responsible thing to do when this happen is to take out the fish. We have protocols for situation like this. Of course, it's something we don't like to do, but we need to do because of fish welfare. This means that we will have less fish available for harvest in 2024, and we will also have a one-off of financial effect in quarter four 2023, expected to be EUR 5 million to 6 million.
There are several lessons learned by the companies and by the authorities, and we have already taken steps to update our procedures and reduce the risk for similar incidents. During the coming months, there will be an evaluation of the incidents where the companies and the authorities participate to set a framework that prevent this from happening again. From our point of view, it's very possible to control lice levels in the Westfjords of Iceland if right actions are done at the right time, and this applies both to the companies and to the authorities. The situation for our biomass in Tálknafjörður at the moment is satisfactory due to the actions we made in October. But we also see some positive development in our operational performance. We see the good demand for our product in the market.
I have mentioned the positive development on the smolt production and our spring 2022 generation that we just recently have started harvesting on shows significant improvements when it comes to growth, feed conversion ratio, and survival rate compared to previous generation. Now, let me conclude on our outlook for rest of 2023 and 2024, and also some words about the longer perspective. Our volume guidance for 2023 is up from previously 16,000 tons to 17,000 tons, and the volume guidance for 2024 is 15,000 tons. The increased volume in 2023 is a result of growth beyond expected on our spring 2022 generation, which is produced in 200-meter, 200-meter cages on our site, Hringsdalur.
The volume in 2024 is affected by the situation we have been through in October this year, and as mentioned on the previous slide, we also expect a financial effect in quarter four due to the same challenges, estimated to EUR 5 million to 6 million. The contract share in quarter four is expected to be 15%, and for 2024, we expect a contract share of 10%. The biological challenges in October is not expected to have an effect on harvest volumes for 2025, and we still see the potential for growth up to 26,000 tons within our existing licenses. And we are positive to get there soon based on the results we see on the smolt quality and the performance on our spring 2022 generation.
I will at the end like to thank our hardworking employees that are fully focused on their job, either it's headwind or tailwind, to run our operations in a good way towards the future. It's a significant job done, and that is well appreciated. I have then come to the end of the presentation. We will now open for questions from the audience, and it's still possible to send in questions on the email questions@arnarlax.is. I will then give the word to Hjörtur, who will lead the Q&A session, and Jónas and me will be here on stage to answer questions. Thank you.
Hello, yeah. We'll start from questions from the audience, and then I will move to the email. Is there any questions from the audience, for now? Oh, there's one. Oh, well.
I think everyone can hear me. I'm just testing.
Oh, we need it on the microphone.
Okay, we get the other one, [crosstalk] of course. Here we go.
Hello, thank you for the presentation. I'm just wondering about the guidance for 2024. Is it 14,000 or 15,000? Thank you. Because on the header it says 14.
I'm sorry for the misunderstanding. It's 15,000. The guidance for 2024 is 15,000 ton.
Okay. Any more questions from the audience? No. Okay, I will go to the email then. We have some questions here from Ola Trovatn . "Does the EUR 5 million to 6 million one-off for Q4 include all effects of the biological challenges, including the lower expected sale prices?
That includes everything as we see it now. That's how we have estimated that number. Yes.
Okay. Then he asked: "How do you plan to improve sea lice treatment capacity going forward? Will this require additional output capacity in stand by the sea lice season?
First of all, I hope that we, together with the authorities, find a better system for taking action when we see rising lice levels. But we will also make sure that we have sufficient capacity available. We have been, over the years, dealing with the lice in a good way, and there is no reason that we shouldn't do that for the future either. So, I'm pretty sure that we'll have a good system to deal with the lice for the future.
Okay. He also asks, "Is the cost of feed from your supplier higher in Q4 compared to first half of 2023? Do you expect it to increase in Q1?
Can you repeat the question?
Is the cost of feed from your supplier higher in Q4 compared to first half of 2023? And do you expect it to increase in Q1 than 2024?
We see a quite similar level. The expectations for Q1 is... Oh, I have to look it up. I don't have the answer there. Sorry.
No problem. And then he asks, the last question from him is: "How much of harvest volumes in Q4 are 21 generations versus 22 generation?
I need to do some brief calculation here, but it was for the quarter or for the year?
Yeah, for the quarter, Q4.
Yeah, for Q4, it's 80% plus 22 generation.
Okay. Yes, any questions from the room? No. Okay, I will have some questions here from Axel Jacobsen . He asked, "Will the recent sea lice issue impact 2025 volumes?
No, we don't expect the lice issues to affect the 2025 volumes. This was fish that was planned harvested in 2024.
Yeah. Okay. "Excluding EUR 5 million to 6.6 million impact in Q4, do you expect cost to level off from the Q3 level?
Yeah, if we exclude the one-off, we expect a decreased cost in Q4.
Yeah. Okay. He also asked here, the last question from him is: "Can you comment on how many individuals were culled due to the incident?
No, we don't have comments to that. That will be... No, we don't have.
Yeah. Any questions from the room? No. Then I have one last question here from Bjarni Gíslason. He asked: "How big is the expected decrease resulting from the biological challenges in 2024, or what was the previous outlook?
No, we haven't given any previous outlook. We have the guidance for 2024 was done today, so we haven't said that before.
Yeah. Okay, any questions from the room? No. Okay. Then I would just like to thank you all for coming and showing up on the stream, and, yeah, and enjoy the rest of the day. We have some salmon here in the front, who's in the audience, and drinks. So looking forward to see you again. Thank you.