Welcome to Q1 presentation of Lerøy Seafood Group, 2023. My name is Henning Beltestad. I'm the CEO of Lerøy Seafood Group, and with me today I have CFO Sjur S. Malm. First of all, I want to start with our fully integrated value chain. Our goal is to create the world's most efficient and sustainable value chain for seafood. We have high ambitions. Some of them are, we want to, we have a goal of having more than NOK 50 billion in turnover in 2030, being the number one farming, but sales and distribution company.
We have a target of achieving NOK 1.25 billion in EBIT for VAP, Sales & Distribution in 2025, reducing the total GHG emission by 2030 by 46%, achieving a wild catch EBIT of more than NOK 500 million and a total farming volume in 2025 of 205,000 tons in Norway. First of all, we start with the highlights of the quarter. It's been a quarter with a record revenue up by 26%. We have an operational EBIT of NOK 26.60 per kilo, all inclusive.
Farming volumes are impacted by some challenges in biological situation in H2. We expect the harvest volume to be around 193,500 ton in 2023. We have seen a positive development in VAP, Sales & Distribution. There is an overall strong demand for seafood. There has been a very strong seasonal quarter in wild catch. The total EBIT for the quarter is of NOK 989 million. We report in the three segments, farming, wild catch, and VAP, Sales & Distribution. We start with the farming part. This has been a quarter with low harvest volume.
Some price realization well below spot prices driven by 18% contract share, and we also have some impact from winter wounds and not optimal harvest profile taking out the high prices in the end of the quarter. We have an operational EBIT of 26 NOK compared to 15 NOK in Q4 2022. We have a healthy performance in Lerøy Aurora with more challenging biological in Lerøy Sjøtroll. In this quarter, 50% of harvest volume in quarter from Lerøy Sjøtroll. If we look at the different regions, we have first Lerøy Aurora harvested volume of 5,700 tons.
We see a strong improvement in biological performance, but this quarter is impacted by harvesting of low volume with low harvest weight and not optimal harvest profile. That means that we have more volume in the beginning of quarter and less volume end of quarter when the price is at the highest. As in 2022, there will be a significant seasonality in the harvest volume, slightly higher harvest volume expected in second quarter 2023. We expect the total harvest volume in Lerøy Aurora to be around 47,000 tons, up from 40,000 tons last year. So a significant increase in volume. If we look at EBIT per kilo, we achieved the Q1 23.8.
If we look at Lerøy Midt, this is the best region in this quarter, harvested 8,700 tons, had a high harvest weight of 4.2 kg. It's been a quarter where we built the biomass. Also some challenges into this quarter after a challenging biological situation second half of 2022. Increase in cost year-on-year driven by higher feed cost as the most dominant factor. Slightly higher cost expected in coming quarters. We expect 64,000 tons gutted weight in 2023 as it looks today. The operational EBIT per kilo in this quarter is 35.7 NOK. A fairly good result in Lerøy Midt.
If we look at Lerøy Sjøtroll, also impacted by challenging biological situation in H2 2022. Also here, price realization is impacted by not optimal harvest profile. The harvest volume in Q2 expect to be lower at a slightly higher cost. Significant improvement initiative in all part of the value chain initiated and expect to yield gradually positive development, including improved sea lice treatment capability. Going into this summer, we will have a much higher capability than what we had last year. The expected harvest volume also here is 64,000 tons for 2023. The EBIT per kilo is around 21 NOK, and we harvested fish of 3.7 kilos, so a low weight compared to last year.
Norsk Havbruk AS has also had a very challenging second half of 2022, which gives low harvest volume in this quarter and harvest of fish with a high cost base. The contract level has been 61% in this quarter, and there's still a challenging biological status, and the expected harvest volume in 2023 is of 37,000 ton. If you look at the total farming volumes in 2023, 47,000 ton in Lerøy Aurora, 64,000 ton in Lerøy Sjøtroll. Total in Norway of 175,000 ton is equal to 2022 total volume. We expect to be up 20,000 ton for 2024 to 195,000 ton and a further increase into 2025 to 205,000 ton.
If you look at the wild catch, it's been a very strong quarter with strong catch efficiency and positive development in prices with the exception of haddock. Higher prices are challenging for the land-based industry, but signs of underlying operational improvements in the land industry. We see a lot of improvement in the different facilities. Lower fuel consumption driven by fewer operating days, but also less consumption per operating day. The fuel price is up 40% year-on-year, and the cost of fuel NOK 24 million above Q1 2022. A very strong quarter, a total EBIT of NOK 229 million in this quarter.
We also see that we have a price increase for Cod. The Haddock is down, the Saithe is more stable. Wild catch, if we look at Q1, total volume 8,000 tons compared to 10,000 tons last quarter last year. Saithe up to 5,000 tons from 3,500 tons. Haddock, same volume as last year. Shrimps, 1,500 tons and other 2,900 tons. A total of 25,000 tons compared to 25,000 tons last year, and that's a good performance taking into consideration that the quotas are down, especially for the Cod. We see also for the total year 2022, we achieved the same volume as in 2021. Good performance in the catch.
The hub sales and distribution, high prices weakening NOK are key drivers for significant year-on-year increase in revenue. We see a significant improvement of profitability year-on-year with the operational EBIT of NOK 96 million compared to NOK 26 million same period last year. We expect a significant improvement in earnings in 2023 compared to 2022. Demand decreased in some markets, but the overall demand for seafood remains very strong. This shows our hub sales and distribution segment. We are a strong distribution network in Europe. In addition to that, we have a sales office in Japan, China and America. Sjur will take us through the key financial highlights.
Yes, thank you, Henning. We have historically reported the EBIT before biomass adjustments as a key operating variable. Following inputs from investors and other stakeholders, we are from this quarter moving to the so-called operational EBIT, which is basically the standard of reporting in this industry. There are no big changes. This is highlighted in our notes, and there is appendix at the end of this presentation showing the change per quarter last year. One significant change is that while we historically have included production tax before EBIT, and now it's after. Looking at the financials for Q1 , Henning has already talked through key drivers. We see that the harvested volume of Salmon and Trout is down 11%.
This is following a challenging situation, second half 2022 and a low standing biomass going into the year. Through the quarter, our focus has been on rebuilding biomass. Looking then on the margin of this volume, it's up from last year. This is driven by higher price realization because costs are also up. Looking on price realization, it's significantly higher than last year, but also significantly lower than spot prices in the quarter, driven by contract share, timing of sales, and quality. Looking on cost, we see that the inflationary drivers, which also helps price realization, including a weakening Norwegian kroner, also impact cost. Costs are significantly up from Q1 last year, and the biggest development is within feed cost.
In sum, the margin of Salmon and Trout is up just about NOK 6 a kilo. Looking into wild catch segment, we see volumes are the same. Hunting has shown that the mix of catch volumes are basically lower value species because there is more Saithe and less Cod, but we see that we're able to keep the same margin as last year. In sum, this gives operational EBIT of NOK 989 million compared to NOK 889 million last year. Looking on earnings per share, I will return and comment upon the results tax proposal, but that is not included in Q1 as it is not approved by the Norwegian Parliament.
Uh, if it is approved, uh, before summer, it will have an impact, uh, on our Q2 reporting, obviously on tax rate, but also on, uh, balance sheet, uh... "Q2" is correct. * "tax rate" is common financial term, no specific glossary entry, keep as is. * "balance sheet" is commo
In our view, we have a strong balance sheet. We are rated investment grade, we did issuance of green bonds in Q2 of this year of NOK 1.5 billion. Looking at change in net interest-bearing debt and cash flow items this quarter, we see the impact from working capital build. We built NOK 600 million in Q1 . Our best estimate today is that that figure will be in the range of NOK 1 billion-1.5 billion for 2023. Obviously, that development will be hugely dependent on price development. On CapEx, the resource tax obviously will impact our ability to do investments going forward. Still, investments in 2023 are mostly investment decisions made before the resource tax proposal.
Our best estimate today is CapEx in 2023 of around NOK 1.3 billion. Included in larger investment is the upgrade of the white wild catch facility in Båtsfjord. Some comments on the resource tax proposal. Firstly, on the process, initially, the Finance Committee of the Parliament was supposed to give come out with something today. This is postponed. It's likely that we will see something in the coming week. The timetable after that is likely that there will be a voting in the Norwegian Storting end May. That's the best indication today. The proposal itself is to increase the tax in the sea phase by 35% on top of normal corporate tax of 22%.
The sea phase is not the full operational EBIT in farming because the sea phase is only one part of the process of making a salmon. What is outside is, for example, smolt, harvesting, transportation, value-added processing. The key question obviously is what will be the efficient tax rate if this proposal is approved. That tax rate will be dependent on many things, but the two key drivers are what is the operating or what is the profitability level in the sea phase, and secondly, how large are the investments in the sea phase, because those investments are tax-deductible. When it comes to the first point on how big is profitability in the sea phase, that is too early to say.
Historically, we have been selling the Salmon in a production process basically at cost, and that is not possible going forward because that would mean that we could never, ever do an investment again outside the sea phase. We need to make new agreements based on market terms. It's clear that obviously compared to the operating profit in farming, it's not 100% of that that is going to see the increased tax. It's the share. We will get back to our best estimate of that share in the Q2 report. When it comes to the investment incentive, what we and industry have said in close to 400 hearing notes to the Storting, is that this tax is not investment neutral, which is what Norwegian politicians tend to say.
That belief and that view has just been strengthened the more we work with this topic. If you look on the total assets of Lerøy, which is only part of it that is farming, obviously, and within farming is only a small part that is in the sea phase. If you look at the farming asset base, if we take out fish and licenses, which are the two biggest items, and look at the tangible assets, our estimate is only that around 10%-20% of that is within the tax regime. That means that there are very, very few tax incentives for making investments following this new tax regime. In sum, we strongly believe that this will not be tax or investment neutral.
It's, in our view, kind of like obvious that if we reduce operating tax, now operating cash flow after tax, and there are no investments for incentives for making investments, then we will see fewer investments. That in turn will impact the development of this industry in Norway. On that, there is a debate in Norway, do our industry contribute today? These are some figures from 2022. We have around 3,600 employees in 60 municipalities, mostly along the Norwegian coastline. We paid last year around 2 billion NOK in taxes and fees. It's obviously that we already today contribute significantly. Then the big question is obviously, if you reduce investments in industry, what will happen to the ripple effects?
What this slide shows is that last year we bought goods and services from 5,100 suppliers above NOK 19 billion. The ripple effect of this industry are huge. We see from the dots, where our own activity is and where our suppliers are based, and obviously, this is mostly along the Norwegian coastline. In our view, it's obvious that this tax will not be good for Norway, because the ripple effects, the risk of reducing ripple effects is probably larger than the income from taxes. That is why we strongly oppose it, and also why we believe it's imperative that this tax decision will have a big impact on the development of this industry in Norway.
Henning, I give the word back to you to look at outlook.
Thank you, Henning Beltestad. We start to look at the last updated numbers from Kontali on the supply side. We see there is not much change for 2023. It's basically no growth globally. Norway is up 1.4%. We see United Kingdom is up 8%. In the rest there is no significant changes. If we look into 2024, it's still very early, and it depends on how the industry managed to cope with the this summer and also the fall. It looks like it will, you know, on the positive side, we'll get a 5% increase. It's still a long way to go.
The more challenging part is to look at the market side. Of course, the prices has been fantastic. The demand for Salmon has been good and with extremely high prices. We see also some dark shadows, and especially in EU, where you see the last quarters has been going down, and from Q1 last year to this quarter is down 11%. That's not that positive, and it remains to see what the effect of the extremely high prices are towards the consumption in this market. If you look at other markets and the U.S. market, it's basically keep the same volumes and at a very high price level.
That's impressive by those regions. This is showing the extreme increase in prices. You see the start of Q2 starts around 80 NOK, and it ends over 120 NOK. You see it's really volatile and that's also its explanation why When we time the volume not as it should be in when you look at the prices, you know that it have a large effect on our price achievement in this quarter.
We never seen a price increase like this, to, you know, if you go back to third, Q4 , we have a price level under NOK 60 and over double price now in end of Q2 . Now in Q1 . That's challenging to operate in the markets with these extreme fluctuations. If we look in our segments, yes, as Sjur said, you know, we're waiting to get the conclusion on the resource tax. We expect a harvest volume of 193,500 tons in 2023. The Q2 harvest volume will be in line with the Q1 harvest volume.
It's been a inflationary trend fueled by a weakening NOK will give a higher cost in 2023, counterbalanced by operational improvements. We have a lot of initiatives, improvements initiatives on the farming side that we are sure that will show some improvements going forward. We look at the wild catch, demand development varies across the species. The price of Cod is up, the prices of Saithe is stable, but the price of Haddock has been a little bit down. We expect with a 15% quota, reduced quota for Cod, we expect a good price for Cod. Haddock is up 8%, and we see that the price of Haddock is going down.
Saithe north +11% and Saithe south of +90% will give a good available quantities for these species going forward. Also might be a reduction in price of Haddock and Saithe. If we look at value-added and distribution, we expect improved earnings in 2023. Resource tax of course adds uncertainty, but hopefully now we get a conclusion and that we know what to pay in tax. It's easier for and having clear guidelines on how we're gonna price our products that will help our customers to take position in more long-term. A weakening demand in some market segments, but overall demand for seafood remains very, very strong.
We have a positive view on the market, but we are not satisfied with the resource tax of course, and we are not satisfied with industry that are not growing. We really need to work hard to change that. Thank you very much.