Welcome to fourth quarter presentation 2019 for Lerøy Seafood Group. My name is Henning Beltestad. I'm the CEO of Lerøy Seafood Group, and with me today, I have Sjur Malm, CFO. First of all, I will take you through the highlights in the fourth quarter. Sjur will take you through the key financial figures. I will come back and talk a little bit about the supply and demand, and also outlook for Lerøy. First of all, fourth quarter, EBIT before fair value adjustment of NOK 770 million, harvested volume of 43,000 tons, catch volume whitefish of 13,000 tons, EBIT all inclusive of NOK 70, excluded wild catch. Contract share for salmon of 38%. Net interest-bearing debt of NOK 2.6 billion. We keep the harvest guidance 2020 of 170,000-175,000 tons, and 183,000-188,000 tons, including associates.
Proposed dividend at NOK 2.30 per share, which is up compared to 2018. If we look at the turnover, we break the NOK 20 billion target. We are happy with that, and continue the positive development in turnover of Lerøy. If we look at the quarterly historic figures, the EBIT, we see NOK 770 in fourth quarter, which is improvement compared to third quarter 2019. EBIT per kilo all inclusive, NOK 70 compared to around NOK 10 in the third quarter. In Lerøy Seafood Group, we report in three segments, farming, wild catch, VAP Sales and Distribution. I will start with the farming. Highlights for this quarter, we see a small increase in spot prices of NOK 56 compared to NOK 55.40, and up 1%. NOK 7.60 up compared to third quarter.
Trout price achievement is below the salmon, but we see also that we have had a significant improvement in quality compared to same period last year. That's on the positive side. Contract prices is higher than spot prices. As we expected with last presentation, the cost is down compared to third quarter. The biomass we see is 1% higher than same period last year. As we said, we keep the same guidance as we presented the last quarter, and we are around 40,000 tons in Lerøy Aurora, 67,000 tons in Lerøy Midt, and 66,000 tons in Lerøy Sjøtroll. A total in Norway of 172,000 tons. Our share in Scotland, we will be 13,000 tons for this year, which is the same level as for 2019. Scotland will have a total volume of 26,000 tons. Total of 185,000 tons for Lerøy Seafood Group is the guidance of 2020.
For the wild catch, we catch the 13,000 tons, up 12% compared to the same period last year. We see that the average price is up 11%, and the price for cod is up 10%, and haddock up 14%, and saithe up 10%. On the industry side, we see that it's still challenging, especially because of increased raw material prices, which take time to increase in the end markets. If we look at the total volumes, for 2019, we catch the 22,000 tons cod, 9,700 tons haddock, 11,500 tons saithe, almost 10,000 tons of shrimps, and 9,800 tons others. A total of 62,500 tons compared to 66,000 tons in 2018. For VAP, Sales and Distribution, we have had a extremely good quarter.
We really see that in most of the activities, we take out the full potential of, not the full, but more of the potential in all the activities that we have in all the major markets. We had an EBIT of NOK 162 million compared to NOK 134 million same quarter last year. Sjur will take you through the key financial figures. Thanks.
Yes, thank you, Henning. This quarter marks the end of 2019, a year which has not fully met our expectation when it comes to earnings. Looking into our segments, there has been in the whitefish, a good year for the trawling business, the oceangoing fleet, while the land-based industry has been challenging. There is too much capacity, basically, in that industry, and with lower quotas, it's been a very challenging year for land-based industry in Norway, which has impacted then whitefish in 2019 and also in this quarter. Looking at the farming operation, Q4 has developed much as expected. However, we've had challenges in Aurora in the second quarter, particularly with algae, and we've seen a lack of growth in connection with keeping sea lice figures low in Central Norway.
We lost some 3,000-4,000 tons in Aurora in the second quarter and some 8,000-10,000 tons in Lerøy Midt, particularly in Q3 as well as Q4, which we already have stated in previous quarterly reports, but which is impacting then both Q4 and 2019 as a whole. With less growth, there is less volume also to divide costs. That has a negative impact both on sold volume and cost per unit. When it comes to downstream, this has been a good year. Very strong development from 2018. A good development in many markets, not all yet, so there's still significant potential, but the end of a good year. In sum, this is what is impacting this quarter, and here showing our Q4 numbers. We are a seafood company, not only a red fish company.
That is why, despite that you can see that harvested volume of red fish is down 13%, our revenue is about the same level as last year. There's been good activity in the quarter. Still, red fish is currently the key driver of profitability. You can see that on EBIT per kilo, operating margin per kilo, we're down about NOK 1 from last year. With lower volume and lower profit per kilo, those are key reasons to the decline in EBIT before value adjustment. When it comes to reduction per kilo in margin, as Henning has pointed out, we have a slightly higher spot price this year compared to last year, and we also have a slightly higher price realization, but we've also then had a negative development in cost, which is the reason for the year-over-year decline in profit per kilo.
Also, associates, which I will return to, particularly then Norskott, has a challenging second half, and that is why income from associate is down. In total, EPS is NOK 0.94 this year compared to NOK 1.41 last year. Key drivers in the quarter is related to both volume and to profitability per kilo. Looking then at the year as a whole, we see that the harvested volume red fish is about unchanged. You can see that our EBIT per kilo is substantially down. This is related much to cost. It's related partially to price realization, perhaps about 1/3, and then 2/3 related to cost. That cost development is what we are not pleased with for the year, and it's related to lower volumes to divide cost upon.
These are the key factors to why our EBIT is down from around NOK 3.6 billion- NOK 2.7 billion in 2019. Also then key drivers for the reduction in earnings per share from NOK 4.90- NOK 3.50. Our balance sheet is obviously impacted by changes in IFRS. Then IFRS 16, which demands us to put in all rental agreements on the balance sheet. You can here see the right of use asset, which is a new asset class of around NOK 2.4 billion, which is a key driver then for a higher total non-current asset this year compared to last year. Also, in addition to this, we have invested heavily, particularly in the smolt facilities. Looking more at the current assets, you can see that our biomass is a little bit larger.
As Henning has already pointed out, cost level is a little bit higher, so it's kind of balanced. We've been able to manage to have lower inventory as a group in 2019 compared to 2018, which is good for working capital. Prices at the end of 2019 were very high, which is impacting receivables. We have a good cash position. In total, we would say we have a strong balance sheet. It appears the equity ratio is down from 60.4%- 58.8%, but much of this is related to IFRS 16 adjustment. If we hadn't had IFRS 16, our equity ratio would have been higher than last year. Key points for us is that we have a strong balance sheet. We have a pretty stable development then in net interest-bearing debt. Looking more at the development in net interest-bearing debt and cash flow.
In the fourth quarter, I think the key point is some build in working capital. This relates to receivables, relates to some growth in biomass. It also relates to some increases in debt to suppliers. I think on an annual basis, it's more interesting to look at the cash flow on an annual basis. EBITDA is impacted by IFRS 16. We can see further down, there's a line called installments paid on lease liabilities, which last year was included in EBITDA. EBITDA development like for like is some NOK 4.2 billion-NOK 3.5 billion, which is then reflecting what we touched upon earlier. We see that we paid less taxes, but we also see that we had a more positive working capital development in 2019. Thus underlying the cash from operation is not that much changed compared to last year. We have invested less. We paid a higher dividend.
In some you can see there is an impact from IFRS 16, and it hasn't been for that level would have been basically unchanged. The board has communicated and our target and objective is to reach 18% Return on Capital Employed. That is our target. At this period, we actually averaged above that. We have been above the last three years. This year we are slightly below. Key reason is the lower production and harvest volume in farming, combined with the fact that we have invested heavily for the growth of our business in coming years. In the years to come, we believe there is potential to have a higher production out of the assets that is in our balance sheet at the end of 2019. Lerøy has paid a dividend for many, many years, so we are a stable dividend provider.
You can see that on the left-hand side here is the absolute level of dividend. It's been, I would say, growing and quite stable. This year, the board proposes NOK 2.30, which is an increase from last year, represents about 2/3 of earnings per share. That represent a 4% dividend yield. Henning has already touched upon the profitability in different segments. I just highlight that. As you can see, lower profits in farming is a key reason for lower operating result this year compared to last year. In Aurora, we've had the development we have expected for Q4. We had some growth challenges as highlighted in the start of the year. It's returned to normal second half. Good growth gives a good development in cost and development in this quarter as expected.
Unfortunately, start of this year in January, we are seeing some challenges with the winter ulcers, which will impact then both our production, and so we don't currently have the full production we had expected. It will also impact the quality and the price realization. That will impact profitability, EBIT per kilo in the first quarter. For the year, we continue to believe in good numbers from Lerøy Aurora, and we have also invested quite a lot in smolt here. Average size this year will be around 300 g, which should give good growth opportunities for the years to come. As already highlighted in Lerøy Midt operations in Central Norway, we had some challenges Q3, early Q4, as highlighted in our previous quarterly presentation. Following, we have a lower production, particularly in one generation, which is impacting cost this quarter and will also impact cost in first quarter.
We expect lower cost level in first quarter than this in Q4, and there is a potential for lower cost in 2020 compared to 2019. Looking at our operation in Vestlandet, previous Hordaland, in Lerøy Sjøtroll, development has been much as expected this quarter. A good lift in profit levels from Q3. The particular interesting part here is development of the new smolt facility. We will again release post-smolts in March, and we have high expectations that that will start impacting our results from late 2020 and even more in 2021. I think we already touched upon key points from Henning on wild catch. You can see there is a positive development in prices. There is a good development in volume. The trawling business, the ocean-going fleet has had a good quarter. It's been very challenging quarter and a very challenging year for the land-based industry.
Basically, the change from 2018- 2019 is a change in profit level in the land-based industry. Including then increases in depreciation and amortization, as we have invested quite a lot for developing the land-based industry. We expect to see results from those investments in this year, and then a more positive development. This is Norskott Havbruk Scottish Sea Farms, which is the operation we jointly own together with SalMar in a 50/50 joint venture. As highlighted the previous quarter as well, second half 2019 did not develop as expected. Challenges early in the year is impacting volume and thus impacting cost. Thus cost level in second half of 2019 is higher than what we had aimed for and what we had expected. We expect now a lower cost level in first quarter 2020, but also harvest volume in 2020 will be impacted.
We expect to see significant growth in 2021 and get back to kind of like the growth pattern we have been planning for. Part of what's going to support that is the new smolt facility.
With the first smolts delivered in this quarter. Henning has already touched upon our downstream operation. It's one of the best quarters we have ever seen. It's a good margin development. There's still potential in several markets to lift the profitability level. We are doing everything we can to make the positive development seen in 2019 to continue into 2020. With that, taking the word back to you, Henning.
I will take you through the outlook and supply and the demand. First, if we look at the supply side, we see that in Europe we expect a 3.5% increase in volumes compared to 9% in 2019. For the Americas, 4.8%, and a global growth of only 3.9% compared to 7.4% in 2019.
If we look at the prices, we see very volatile prices the last months of the year, and we see from September at NOK 40 and then end of December up to NOK 80. Doubling price within two months time. Volatile price level this quarter. It also shows the good demand that we see for the Atlantic salmon and the willingness to pay for a fantastic product. If we look at the harvest volumes in Norway, we see it's negative numbers in the first quarter, and we will have a 2%- 7% growth per month for the rest of the year. Which should be possible to handle in a good way. If we look at Europe, we see more negative growth in first quarter.
We see that the U.K. is down and Faroe Islands is down in January, February and March and the total is down 3%, 4% and 3%. Then we will have 2%-10% growth per month the rest of the year. If you look at Americas, the slaughtering is high at the moment, up 6% in January, 10% in February, 7% in March. Also especially in the Chilean countries is facing some challenges with the key markets that they sell to. It can be a challenging price situation from these production areas in the start of this year. In total, we see a stable growth month by month and the lowest growth in first quarter, which also is reflected in the price levels that we are facing in the spot market at the moment.
If we look at the Atlantic salmon consumption, for Q4, we see EU is up 3%, other markets up 2%, USA up 9%. The year as a total, 2019, 6% in EU, 7% in other markets and 8% in the U.S. If we look at the outlook for us, we believe that the seafood market will remain strong both for red fish and also for white fish. We keep our guidance for salmon and trout this year of 183,000-188,000 tons and we increase the guidance for next year from 200,000-210,000 tons. We expect a contract year for salmon of 40% in Q1. We see a significant potential in white fish and further development of integrated value chain. This is our value chain. We invested heavily the last 20 years to build this fantastic value chain.
Our target is to create the world's most efficient and sustainable value chain for seafood. We have a good start and as I said, we have invested strongly into whitefish and redfish and also all the downstream activities in all the central markets in Europe and also in other regions. One of the largest investments that we're doing at the moment is the post-smolt facilities. We just started to build Belsvik two, which will be one of the biggest smolt facilities in the world with a biomass of 5,000 tons. This factory is expected to be the step two of this Belsvik is expected to be ready within third quarter 2021 and the first output in March 2022. If we look at the Laksefjord, we had an accident last year which delayed this project a little bit.
We are now seeing the end of the production on the building production, and it will be finished around fourth quarter. This will give us larger smolt, and we will see increased volume this year, but especially for 2020, we will see a large increase in volumes coming from this facility. This new smolt facility in Vestland is finalized. 4,000 tons biomass capacity. We will have a new release of post-smolt, 500 g, in March 2020. The average size of released salmon smolts in Lerøy Seafood will be around 300 g this year. This will impact fourth quarter 2020, and with a major potential in volumes for 2021. In this quarter, we also got the new trawler, which we had the first trial in February. This is adding capacity as a substitute for the smaller older vessels. It's development of Nordtind design.
It's the world's first Demersal trawler built with live fish tanks prior to sedation and slaughtering, to improve quality. It's the world's first Demersal trawler built with battery hybrid solution. It's a triple trawl for shrimps. The first catch, we had a catch period of 17 fishing days. We had harvested 890 tons herring and gutted fish, and also 300 tons saithe. A very good start with a total catch value of NOK 38 million . A tremendous start for this new vessel, and we are really proud of that. All the people that have been involved in this project and the fishermen have done a fantastic job in the development of a world-class vessel, I will say. We built a strong European distribution in Lerøy over the 20 last years.
We now have a good fundament, a good position in all the major markets in Europe, and gives a huge potential to develop the seafood category going forward. The latest will be in Italy, where we will open a Fish Cut distribution center later this year. At the end, we will host a capital market day in May, June 2020, and we will come back with further information and invitation about this market day. That was all. Thank you very much