Welcome everyone to the webcast of The Kingfish Company. Today, our CEO and CFO will present the Q2 2024 results. Our CEO will start with the presentation, followed by some financial insights by our CFO, and after that, we will open for Q&A, so Vincent, please start.
Slide. Are you gonna see the first slide? So good afternoon, everyone, and let me start with a few highlights of the second quarter. Compared to the second quarter in 2023, our sales volume increased by 36%, reaching 512 tons in the quarter. And alongside this volume growth, revenue climbed 31% to EUR 7.3 million. We have intensified our sales and marketing efforts, and we started new business with a number of food service distributors and retailers in Europe and in North America, and we project to further increase these efforts and distributors during the remainder of the year. A key highlight for the quarter is the improvement in our sales mix or in our size mix.
We increased the share of large size yellowtail to 53% of our total volume, and that was 37% in the second quarter of last year. This shift to larger sizes goes hand in hand with a larger proportion of our volume being sold to food service, which demands larger sizes. This, over time, we believe, will allow us to further increase revenue per kilo and margins. Finally, by way of introduction, I'm pleased to report that the Maine Superior Court has, upon appeal, upheld, for the third time, our municipal permit for the construction of our farm in Jonesport. This permit is now final. No further appeals are possible. However, we are still awaiting the outcome of a court challenge of our state permit, and we expect the result of that in the coming weeks or months.
When it comes to production, biomass production over the quarter was in line with previous quarters, at a total volume of 631 tons. However, of course, if you compare this to the second quarter of 2023, this represents an increase of 23%. Our standing biomass, again, compared to the quarter a year ago, has doubled and now stands at 1,075 tons, which is at capacity of the farm. However, this level of biomass is higher than what we need for our current pace of harvest, and this has an effect on biological performance. And as a result, productivity, which is growth per cubic meter per day, fell from 0.82 kilos in last quarter, in the second quarter last year, to 0.56 in this quarter.
As a result of producing larger size fish and at the same time keeping a lid on growth, our feed conversion increased to 1.47 in the last quarter, and also this is compared to 1.27 in a quarter a year ago. This is not a development that we want, but is the effect of keeping a lid on growth. However, we believe that as we while we ramp up our harvests in the coming quarter, we will reduce this figure again to values that we had before. We have now finished harvesting our 57 batch in production, and of course, we have, at this point of time, another 20 batches in various stages of production. As we are targeting a larger harvest size, we actually need to stock less juveniles than we did before.
This allows us to stock only the very best fish, and this will enhance our biological performance. When it comes to our genetic program, we have now set up our 4th generation, and we expect to produce the first eggs there in the beginning of 2025, and probably be full-on on the 4th generation in 2026. And again, this will help to further improve biological performance. When it comes to sales, as I mentioned, we've seen a significant increase, 512 tons in this quarter, compared to 410 in the last quarter, so that was a 20% increase, and 377 tons in the second quarter of 2023. At the same time, the volume increased by 31%.
Or sorry, the volume increased by 36% and revenue, the euros, by 31%. The difference in volume and revenue growth reflects a lower revenue per kilo harvest, and this is driven mainly by promotional activity. I will say something more about that. The expansion of our sales team in key markets will be completed within the next two months. By then, our sales team will be almost twice the size that it was before, and this should allow us to keep growing our sales at a very significant pace. While sales have been slightly below our internal projections, we believe this is largely due to the fact that the market for this new premium species is still emerging.
But we are confident that as this market matures, and combined with our increased marketing and sales efforts and investments, we will see strong growth going forward. Just on price or revenue per kilo, as I mentioned, we've seen a slight decrease. In the second quarter of 2023, we were at EUR 14.8 a kilo. In the last quarter, we were in EUR 14.2. This is mainly driven by promotional activity, both in retail, where every now and then product is put on ad, and also introducing the product to new markets and new distributors, where we put some incentives in place to drive initial sales.
When it come to the size mix, large fish, fish over two kilo, as compared to small fish, under one, under two kilo, we have improved that ratio, and in the last quarter, 53% of our volume was large-sized fish, and this compares to 37% a year ago. This reflects our increased efforts in the food service market. That market demands large-sized fish, and we are able to realize significant growth in that market. We need larger fish for that, and we are producing larger fish. We do expect this to continue to shift towards larger-sized fish in the coming quarters. As mentioned, this will help also in average price achievement and ultimately in margins. With that said, I'd like to hand over to Jean-Charles.
Yeah. Thank you, Vincent, and good afternoon, everyone. Let's begin with our key production financial metrics. So, while we anticipated more progress in reducing production costs during Q2, the farm has been performing very well, actually surpassing our initial expectations. Unfortunately, we were not able to fully capitalize in Q2 on the strong performance of the farm, which led to an increase in production cost per kilo compared to Q1. In our efforts to align the biomass growth with the sales, we deliberately reduced production volumes compared to Q1, slightly, and this also resulted in suboptimal farm operations, leading to lower productivity and an increase in the FCR, as Vincent mentioned. The rise in the FCR has been partially offset by lower feed cost, continuing the downward trend that we have had for over one year.
This is due not only to the market price for fish meal and fish oil that are going down, but also, to the introduction of new feed formulation in the farm that we've tested and started to implement, about a year ago. Energy costs are decreasing this quarter, primarily due to technical reasons, as we moved into a lower energy or to the lowest energy tax bracket in Q2, and we will remain in this, low tax bracket until the end of the year. So while the energy prices have remained stable, the summer rates were slightly higher than usual. We are also still feeling the impact of last year or last year's, inflation, which has led to increased costs for services, particularly, and employee expenses.
However, the inflationary pressure has now stabilized, meaning that the Q2 cost base reflects now the new normal. So we expect production cost per kilo to decline as we return to optimal farm operations in the next months. Q3 costs are likely to remain in line with the Q2, but we anticipate some reduction in Q4. Let's move to the profitability slide. The main driver of our path to profitability is increasing sales volume and optimizing the product mix. In Q2, our path was slowed by the higher production cost, as I explained, which temporarily halted the upward trend in gross margin improvement that we had over the last quarters. On a positive note, you see that the SG&A cost per kilo continued to decline, despite the strategic investments we are doing in our sales and marketing organization.
The full impact of these efforts in sales and marketing will be felt in the Q4 this year. Our EBITDA is now nearing breakeven, and we expect to reach that milestone as we continue to ramp up our sales. We are now in a positive cycle. The sales increase, we will continue to reduce production cost and move closer to profitability. On financing and liquidity. At the end of Q2, we had over EUR 18 million of liquidity, including EUR 13 million in cash and deposit. For the first time in Q2, we fully paid the interest on our main financing facility with PCP in cash. We partially paid in cash in Q1, and before this interest were capitalized. The interest rate in Q2 was reduced by 150 points, so very significantly.
We take reflecting our achievement of all our sustainability targets, so we have reduced our CO2 footprint, we have reduced our FFDR, and we have kept all our certifications, which resulted in this very nice 150 points reduction of the interest rate. Additionally, we are still benefiting from the cap we have on Euribor at 2%, and this all result in net interest payment for the quarter of EUR 1.7 million over a debt of EUR 75 million. The Q2 cash usage was also impacted by the final EUR 2 million payment for the upgrade of our grid connection, and our working capital also increased by EUR 2 million, primarily due to EUR 1.3 million increase in frozen inventory and biomass.
So we are closely monitoring our liquidity position to ensure that the company will remain fully financed as we ramp up the sales towards the farm maximum capacity in the next few quarters. So in summary, we have faced some challenges in Q2 due to the higher production cost as we are making these tactical adjustments to better align the production and sales. But the overall farm performance has remained very strong, and also the sales growth is accelerating very strongly. So we expect the cost improvement in the coming quarters as we transition to optimal farm operations. We continue focusing on increasing sales volume, refining our product mix, and optimizing operations, and I think we are on the right path toward profitability. Wi th sustained effort and prudent liquidity management, we remain confident on our ability to achieve our long-term goals. So on this note, I hand over to Vincent again.
Just for concluding remarks, we are ramping up sales. We are quarter- on- quarter increasing our sales, and we expect that to continue. Our biological performance in this quarter was somewhat impacted by the need to control biomass growth, but we do feel this is temporary, and we anticipate to regain or even surpass our previous performance while we ramp up harvest. And harvest, of course, very much related to sales. To further fuel our sales momentum, we are continuing to invest in our sales team and in our marketing efforts. In the next months, we will complete the strengthening of our sales team, and we expect to significantly increase sales over the quarters to come and get closer to maximum capacity of this facility for now. And with that, thank you for listening, and we can be ready to take your questions. So if you'd like to ask a question, please unmute, state your name, and go ahead.
Hey, it's Alex Aukner from DNB. You said you're doubling your sales team. Did I understand it correct that that cost is now already reflected in your current cost base? Or will there be added costs related to this doubling of the sales team?
We've not yet finished strengthening the sales team. Some of the people will join in Q3 or very beginning of Q4. So as I mentioned, the final cost will be reflected in Q4 financial statements.
Okay. How many people are you adding?
I think that gets a little bit too detailed, but, we have a significant sales force. I can say that.
Covering Europe.
United States
... U.S. and some export markets.
Yep.
How much of your sales is currently going to the food service segment?
More than half.
Okay.
Yeah, I'm a bit careful on this, communicating this to our competitors.
Okay. Thank you.
Other questions?
Don't be shy.
Yeah, maybe I can do a follow-up question just on the finance costs. I think, in the first half, you had finance costs on your borrowings of just above EUR 6 million, but you report EUR 1.7 million in Q2. Is there some exceptional factors in Q2, or is that the level it's gonna be going forward?
No, but be careful between the cash finance cost and what they are reported in the P&L according to IFRS. So the EUR 1.7 million we've paid now, it's standard as long as we have the cap on Euribor until the end of the first quarter of next year, and as long as we maintain all our sustainability target, leading to this reduction of the interest rate by 150 points. So yes, this is supposed to be a standard cost for the next quarters.