Welcome to Lerøy Seafood Group's third quarter presentation of 2025. My name is Henning Beltestad, I'm the CEO in Lerøy Seafood Group, and with me today, I have Sjur Malm, CFO. First of all, I will take you through the highlights of the quarter. Then Sjur Malm will take you through the key financial highlights. Then I will come back and talk about the outlook. First of all, I want to share this slide, which I always do on my quarterly presentation, is our fantastic value chain. Our goal is to create the world's most efficient and sustainable value chain for seafood. We believe that our value chain is providing what our customers are seeking. We really see that our development in markets together with strategic customer is developing the right direction. Highlights of the quarter.
It's been a quarter with low profitability on low spot prices for salmon and trout. It's been a challenging quarter in farming, but year-to-date development remains strong. Record earnings in the VAP, Sales & Distribution segments. Low quarters in wild catch offset by significant price increase. The harvest guidance for Norway in 2025 is reiterated at 195,000 ton. We see a positive working capital development and a net interest-bearing debt reduced from NOK 8.5 billion to NOK 8.1 billion. I will go through the different segments where we report. We start with farming, then wild catch, then at the end, VAP, Sales & Distribution. We start with farming. The spot prices is NOK 8 lower in third quarter compared to same quarter last year, which of course, have had a negative effect on our operational EBIT.
As guided in Q2, costs are up quarter-on-quarter in third quarter, following four consecutive quarters with cost reduction. It's a challenging biological development in this quarter, but biological performance year-to-date remains strong. As I said, we keep our guiding for 2025 at 195,000 ton. If we look historically on the development, we see that the 12 months rolling down at the right, is developed from 159,000 ton, fourth quarter 2023, up to 203,000 ton end of this quarter. It's a significant improvement in the volumes the last couple of years. We will go into the different regions. We start with Lerøy Aurora, a strong biological development in third quarter, a record net growth, high survival rate, high superior share, and continued high license utilization. As expected, cost third quarter in line with the second quarter.
It's been high seawater temperatures, which also continued into Q4, which has been a little bit more challenging than earlier year. Then we had one incident with ISA at the site that will impact timing of harvest volume in fourth quarter, with a higher share of volume in October. The estimated harvest volume is increased to 54,000 ton for 2025, and the guidance for 2026 is at 49,000 ton. The harvested volume in the quarter is 20,000 ton compared to 17,600 ton in third quarter 2024. The average size of 4.4 compared to 4.8 kilo. The operational EBIT in the quarter is NOK 9.5. We go to Lerøy Midt, the mid region. It's been a more challenging quarter with a high sea lice pressure. The harvesting weights is below plan.
Also the timing of the harvest has been negative due to the price is higher in September than earlier in the quarter where we took out a high share of the volume. Year to date development in line with recent year. Cost in third quarter increased quarter-on-quarter. We expect for flat cost quarter-on-quarter into fourth quarter. The estimated harvest volume reduced to 71,000 ton in 2025. For 2026, we estimating 73,000 ton. If we look at the volume in a quarter, we have about 21,450 ton in third quarter '25 compared to 16,931 in 2024. The average rate is 4.1 compared to 4.0 in 2024. If we look at third quarter 25, we have a negative operational EBIT per kilo value chain of NOK 3.1. We take the South region, the West region, Lerøy Sjøtroll.
It's been a significant year-on-year improvement. Biomass production slightly up year-on-year. High survival rate, high superior share, continued high license utilization. The year-to-date harvest volume is up 14,000 ton. Trout stands for 59% of the harvest in the quarter. Cost as expected up quarter-on-quarter for fourth quarter in basis of new generation of trout, expectation of a slightly quarter-on-quarter cost increase into fourth quarter. Estimated harvest volume is about 70,000 ton for 2025, an increase to 73,000 ton in 2026. The harvest volume in the quarter is 17,500 ton compared to 16,800 ton last year. The average harvest weight is 4.3 compared to 4.0 last year.
The operational EBIT per kilo value chain is minus NOK 1.5, same as we had the same quarter in 2024, a great improvement when we look at a negative price trend of NOK 8 in the same quarter compared to last year. A good direction on the performance in Lerøy Sjøtroll. Scottish Sea Farms. Strong biological development with the next generation of fish performing well. Lower price return impact result in the quarter. The volume in 2025 impacted by reorganizing site structure. Long-term potential significantly higher. We also see that with the guiding. The estimate for this year, 33,500 ton, for next year, we increased the guiding to 45,000 ton. A great improvement going forward in Scottish Sea Farms. We're very happy to see this development and the way we build the biomass going forward.
When it comes to the volumes in third quarter, it's 7,200 ton compared to close to 12,000 ton same quarter last year, operational EBIT of NOK 1.2. Which is improvement compared to second quarter in 2025. The guiding summarized. For 2025, we start with Lerøy Aurora, 54,000 ton, Lerøy Midt, 71,000 ton, Lerøy Sjøtroll, 70,000 ton, a total of 195,000 ton in Norway 16.8 thousand ton in Scottish Sea Farms is a total of 212,000 ton. When it comes to 2026, we guide Lerøy Aurora a little bit down to 49,000 ton, still at a higher level than 2022, 2023, and 2024. For Lerøy Midt, we increased the guiding to 73, Lerøy Sjøtroll 73, a total of 195. Total our share of Scottish Sea Farms 22,500 ton, a total of close to 218,000 ton. Wild catch highlights.
It's been a seasonal low quarter. It's been an okay performance. Catch volume. The quota in 2025 is down 32% year-on-year, impacting catch volumes for the trawling fleet and a higher raw material price and volume in the land industry. Challenging operation conditions for 2025, positive to see that the price increase more than offset impact from lower quota. Further quota reduction expected in 2026, potentially increasing again from 2027. If we look at the price for the key species, we see it's been extremely positive development in the price increase quarter by quarter the last couple of years. For the catch volumes in the quarter, a total of 13,500 ton this quarter and the same level as we had the third quarter last year. The remaining quota for 2025 is 2,900 ton for cod, 9,200 ton for saithe and taken most of the haddock quota.
Around 13,000 ton remaining quota compared to 9,600 ton 2024. The sales processing, the VAP Sales & Distribution segment. We will go look at the key performance in the quarter. It's been a record quarter. Structural improvement continue to yield results in almost all units that we have out in the markets. It's a record 12 months rolling operational EBIT. Effects of structural improvement work, the reason for that is effects of structural improvements work, strong demand in end markets, positive development in emerging markets, and a strong positioning with strategic customer globally. We also see that the new branch offices in Asia are starting to show results and we expect continued positive profitability trend in 2023 and also into 2024. We see the EBIT margin in third quarter is close to 5%, which is at a very good level.
We see that the 12-month rolling now are up at where we set the target some years ago. We are going towards NOK 1.25 billion in EBIT in this segment. A fantastic job what they do in this segment, and we believe that we will see further improvement going forward. I will come back to that afterwards. Sjur will take you through the key financial highlights.
Yes, Henning, thank you. If you look at the farming, last four quarters, we've seen production higher than expected and costs lower than expected. This quarter, we said at Q2 that we saw increased risk due to a very warm summer in Norway. We have seen a production in Q3 which was basically in line with recent years, but not showing the same improvements that we've seen in recent years. As Henning has highlighted, the improvements in downstream segment has continued. In sum, this translate to this P&L. We can see the key value drivers on the latter lines. First of all, we see that harvest volume is up 15% compared to last year. That is then a reflection of the significant improvement in production year-to-date in farming. We're happy with the volume.
Obviously, we're not happy with the profitability on that volume, where we see that the profits through value chain is down from NOK 10 last year to NOK 2 this year. Looking at the drivers for that reduction in profitability, the spot prices for salmon and trout was down NOK 8 a kilo. Our price realization for farming is down NOK 10 a kilo this year compared to last year, which is a reflection of timing of harvest volume. Secondly, we can say then looking at the development in EBIT kilo in farming, that our cost is NOK 1 a kilo higher this year compared to last year. The cost in this quarter in farming is higher than in Q2. If you look at the wild catch segment, volumes are in line with last year.
It's positive to see price development, which is helping profitability, and it's also positive to see that the land industry is performing well in very challenging conditions. In sum, this translate to operational EBIT at NOK 15 million, which we obviously are not pleased with. There are positive signs, and we see that in revenue. We see the impact from the increase in production and farming, as well as the increase in volumes in value-added sales and processing. Looking at our balance sheet, the bigger change is related to right-of-use assets, which is basically wellboats, and we have more wellboats on contracts this year than last year. Secondly, it's related to CapEx and fixed asset, which I'll come back to on the next slide.
Other than that, I think the key development on balance sheet items is the quarter-on-quarter development in working capital, where we, through high focus, are able to reduce working capital in our downstream segment. The reflection of that is as shown here, a significant reduction in working capital. In a challenging quarter when it comes to earnings, we are pleased to see that the cash flow generation is healthy in a quarter with high CapEx, and we are able to reduce our net interest-bearing debt. This shows our CapEx for 2025. There are no changes to this. We will get back to CapEx for 2026 at the latter stage. As this highlights, we have invested through the value chain, in particular in new chilling technology in farming.
This slide is important in Norway with the current discussion on to which degree this industry is impacting and making ripple effects. We just want to highlight that our activity in Norway, which is vast, has massive ripple effects in Norway. We've done purchases from 5,000 suppliers of NOK 18 billion in 2024. We have our own employees, around 4,000, and the impacts in total in Norway is around 10,000 jobs, and we contribute significantly both through value creation and through taxes. Henning, I give the words back to you.
Okay, thank you, Sjur. I will take you through the outlooks. Yeah. Regarding targets, this is showing lights on where we are. We use these targets internally in the organization, and it's very important for us to have this and also to show these targets external. We will come back and evaluate on the targets in the beginning of next quarter presentation, and then we will have a summarize of where we ended in 2025. If we look at the VAP, Sales & Distribution, we are trending in line with the EBIT target of NOK 1.25 billion, following another record quarter. It's fantastic to see this development and how the whole segments and the units out in the market are working structured in the direction of achieving these targets through short-term actions and also long-term actions.
A fantastic performance the last couple of years in this development. When it comes to farming, also the same. Long-term strategic direction, we see improvements in roe and smolt expected yield results from harvest in 2025. This showed when we will take out the result from the earlier changes that we have done in genetics, roe, smolt, shielding technology, and also the implementation of Lerøy Way. We see that second half of this year, we expect and we are taking out improvements, even though we also see that we have external factors that can affect our production, like higher temperatures or a higher pressure of sea lice. On the quality of the fish that we have in the sea, we see that we have improved in the directions or the steps that we see in this map.
That's really good to see, and we have a strong, robust fish going into 2026. When it comes to development in biology and in farming year to date, it shows clear improvement. We see a net growth rate compared to the last five years' average of a 10% increase, a superior share of 5% increase, mortality down 15%, and biomass at sea +5%. Third quarter was more challenging. In this quarter, we see a net growth down 3% compared to the last five years' average. Superior share a little bit up 1%, mortality up 7%, and biomass at sea at the same level. High seawater temperature resulted in a more challenging biological situation, which the effect of this is a higher sea lice level, which has made it more challenging and more treatment on the fish. Improvement still visible in growth speed.
Average days in sea for fish harvested in third quarter is at 383 days, compared to 444 days in third quarter 2024. That's a very good development. For the shielding technology, we see continued reduction in treatments from submerged farming. We see a reduction of 50% compared to traditional. Superior share is a little bit down. Mortality is a little bit up in this quarter. We have faced some challenges, especially with the higher temperatures in the surface. Continued reduction in treatments in the third quarter also. Year to date, it's down 65%, superior share up 7%, and mortality is down 2%. For the shielding technology, the key focus areas in deep sea farming and where do we put the effort is on locations where there's been historically very high number of lice treatments.
We see that we really have had a great effect of the implementation of shielding technology and deep sea farming. One challenge has been the conditions in the temperature layering in summer with water stratification. That we see that down at 35 meters, it's been around 10 degrees and at the surface between 20 to 25 degrees. This has affected when we take up the cages. It's been some incidents with mortality. This will be changed going forward for next summer when we go into the season. We also need to continue to improve how we work with planning, streamlining operations, and that work has already started. We also need to improve feeding with potential to reduce feed factors.
Also to evaluate and analyzing all site based on new data and all the learning that we have done for the two and a half year, that's after the first output of shielding technology. We still have a strong belief in this concept, and we believe that this is really a part of the future for Lerøy in location where these technologies are suitable. We are investing heavily into shielding technology. There is mainly now four shielding technology in Lerøy. It's submerged farming, semi-contained farming, laser delousing, and a closed contained farming system where we decided to invest in three units, which will be ready from first quarter 2027. We invest in new solution also and trying to be innovative to have an even more sustainable production and to increase the performance in sea.
When it comes to supply, we see that this year, global supply of 10%, in Norway around 11%. If we look into next year, we see a negative growth in Norway, minus 2%, and globally at the same level as last year. To summarize, for farming, while third quarter was more challenging, the trends year-to-date are still positive. Contract share for value chain of 24% with positive impact on both farming and VAP, Sales & Distribution. Expect higher share of fourth quarter harvest volume in October and contract share of 35%. Expect a lower cost in 2026 compared to 2025. We keep our guidance for 2025 at 195,000 ton and we keep the same guidance also into 2026. A total including Scottish Sea Farms, 50% of Scottish Sea Farms of 217,000 tons in total. Wild Catch, challenging quota situation, but price development is positive.
Quotas 2025 down 32% for cod, haddock 2%, Saithe North unchanged, Saithe South plus 40%. Indications for 2026 is a reduction of 21% of cod, 18% of haddock, 15% of Saithe North and minus 24% of Saithe South. As I said, for VAP, Sales & Distribution, progressing toward profitability, target of 2025 also supported by contract position. Lower settlement and spot prices are building markets. Increased demand for integrated sustainable value chain and improved market share in some key markets utilizing potential of our value chain. A positive outlook for actually all the segments, even though there is a negative trend on the quota for Wild Catch. We want to inform that we will have a Capital Markets Day, 2nd and 3rd March 2026, in Bergen and Austevoll. There will be a limited number of spots