Welcome to Lerøy Seafood Group's second quarter presentation 2026. My name is Henning Beltestad. I am CEO in Lerøy Seafood Group, and with me today I have Sjur Malm, who is CFO. First of all, I will take you through some highlights in the quarter, then give a short strategy and target update. Sjur Malm will take you through the key financial highlights, and then I will come back and take a short outlook of what we expect going forward. First of all, Lerøy is a leading global provider of high-quality seafood. We have a history reaching back to 1899. Fully integrated value chain, diversified portfolio of healthy products, and strong brands served across 80 countries. Listed in Euronext Oslo Børs since 2002 and have the values open, honest, responsible and creative. In total, we are 6,000 employees.
A turnover last year of NOK 34 billion , an operational EBIT of NOK 2.5 billion , and a total processed volume of 340,000 tons, and a harvest volume of 195,600, and a wild catch volume of 57,675. We are a seafood company. Our goal is to create the world's most efficient and sustainable value chain for seafood and have a global presence in all major markets around the world. At the same time, of course, our sources is mainly coming from the Norwegian coast. We are a fully integrated company, and our value chain is our unique position in the seafood market. There is not many companies like Lerøy globally today. Supplying salmon and controlling the value chain from roe to a branded product in the shop and from fishing boats all the way out to our branded products in shops and restaurants. Highlights of the quarter.
Strong biological development with positive cost trend in farming. Harvest guidance reiterated at 195,000 tons. Increased expectation for profitability in the wild catch. Lower margin in market operations compared to last year. Tightening market for salmon and trout. The board has proposed a dividend of NOK 2.5 per share for 2025, paid out during the quarter. The operational EBIT in the quarter is NOK 574 million compared to NOK 680 million same quarter last year. A short strategy outlook. We had a Capital Market Day in February 2026, and we will every quarter give an update on where we are towards these targets. We have a 220,000-ton target for 2030 in farming. The run rate is around 193,000 tons today. NOK 50 billion target 2030, we are around NOK 34 billion .
The most important in the short term is the NOK 1 billion reduction in cost and the run rate for the NOK 2 billion EBIT in market operation 2030. We have a 12-month rolling at the NOK 1.2 billion . In the short term, the most important is the cost reduction process. As of Q2, we see that we are going in the right direction. We have realized end of the quarter NOK 402 million , and identified and under execution is NOK 521 million . We have a gap to target of NOK 77 million . We are really working, structured, and motivated to achieve this hairy goal. I will go in and look at the highlights for the different segments. We have three segments: farming, wild catch, market operation, and we start with the farming.
It has been a quarter with continued strong biology, low mortality, high harvest weights of 4.8 kg compared to 4.7 kg last year. High quality, but some maturation on trout, which has affected the price achievement. The price is in line year-on-year. The SSI price second quarter 2026 of close to NOK 72 is about the same level as same quarter last year. There has been a quarter with high supply growth. We see in this segment, we have had a significant quarter-on-quarter cost improvement in farming. We keep the harvest guidance on 195,000 tons. If we go into the different regions, we start with Lerøy Aurora. It is a continuous strong biology development, strong growth rates, high survival rates, high superior share, high harvest rates.
The cost is lower compared to second quarter last year and first quarter in 2026, so it has been a good development. Even though we expect a little bit higher cost going forward the next quarter. The estimated harvest volume is increased to 55,000 tons, and the earlier guiding was 49,000 tons. The operational EBIT value chain is close to NOK 20 and a little bit higher than what we achieved the second quarter last year. Lerøy Midt continuously strong biological development, high survival rates, high superior share, high harvest rates. Cost lower compared to second quarter 2025 and also first quarter 2026. Expect a little bit higher cost in third quarter, but the cost 2026 is expected lower than 2025. Estimated harvest volume unchanged at 73,000 tons. Lerøy Sjøtroll, very good development in this region. Good biological development also here in the second quarter. Strong improvement in survival rates.
Low sea temperatures held back growth. Trout of 58% in second quarter. The farming cost is per kilo significantly down from first quarter 2026, and we expect a lower cost in third quarter and also for the whole year of 2026 compared to 2025. In this quarter, price achievement on trout has been influenced by some maturation. The estimated harvest volume is reduced to 7,000 tons, and the main reason for that is the extremely low sea temperature that we have seen through the summer. Scottish Sea Farms. It has been a difficult situation in Scottish Sea Farms the last couple of years, but we are really coming back. Low harvest volumes in second quarter and first half but have a high volume in second half of the year. The next generation of fish is performing well. Expect significantly higher volumes and a lower cost in coming quarters.
The estimated harvest volume is unchanged at 43,000 tons. If we look at the year-to-date 2026, we have harvested 13,500 tons compared to 20,000 tons last year. So we have for second half of the year, a volume of close to 30,000 tons. So there is a huge potential of improvements in Scottish Sea Farms going forward, and that is really good to see. So they have done a tremendous job turning this situation around from the last couple of years. Farming volumes, the guiding, 52,000 tons in Lerøy Aurora, 73,000 tons in Lerøy Midt, and 70,000 tons in Lerøy Sjøtroll, which is 195,000 tons. Our 50% share of Scottish Sea Farms gives us around 22,000 tons and a total of 217,000 tons. We have market operations in 18 countries, developed the last 20, 25 years.
We have sales to more than 80 markets and is the end part of our value chain. Market operations has been impacted by lower harvest volume and strengthening NOK, less favorable contract positions than in 2025. The operational EBIT is down to NOK 269 million versus NOK 351 million in second quarter 2025. A strong EBIT margin of 3.5% compared to 2.5% EBIT margin in first quarter 2026. We expect a good second half of 2026. Wild Catch highlights. Strong performance in second quarter 2026 considering a quarter. Catch volumes up 6% year-on-year, down 10% year to date. Prices significantly up year-on-year. Clear operational financial improvements in land-based industry and a significant inventory build in the quarter. We have increased profit expectation for 2026 from NOK 350 million- NOK 400 million and NOK 400 million- NOK 450 million.
A very good performance in the wild catch segment and a positive outlook going forward. The wild catch quotas and catch volumes. Second quarter, 1,500 tons cod, 1,300 tons saithe, 3,000 tons haddock, 2,100 tons shrimps, and 11,000 tons others, which is a total of close to 19,000 tons compared to 18,000 tons in second quarter last year. We have remaining quotas of 16,000 tons compared to 17,000 tons last year. Sjur will take you through the key financial highlights.
Yes. Thank you, Henning. I will sum up what Henning has said into our numbers. Looking at our P&L, we see the key value drivers on the latter line. On harvesting volume of salmon and trout, as explained, we have seen low water temperatures in Lerøy Sjøtroll impacting growth. That is one factor behind the lower harvest volume. Still, as you know, there is no changes to total guidance for the year. On margin in this part of our business, which is the sum of farming and market operation, we can see that the margin is slightly down compared to last year. Trying to decompose this, starting with farming, we are pleased to see a significant cost reduction from first quarter to second quarter, around NOK 5 a kg, and that is very positive.
We are seeing the biggest positive contribution in cost reduction in Lerøy Sjøtroll and this quarter the smallest in Lerøy Midt, but also then when we guide costs in Q3 flat-ish to slightly up, it is also a reflection of the fact that cost level in Q2 was lower than what we expected going into the quarter. Looking at price, we have an impact this quarter of the maturation on trout, which was around 10 million kilos of trout in the quarter, and we said that the price impact in our report was around NOK 5 a kilo compared to salmon. Also on the margin side, which is off-wing than the cost reduction in farming, is the fact that we have slightly lower margins in value-added or market operation this year compared to last year. That was that part of the business decomposed.
Looking in the wild catch business, I think the key takeaway is the fact that we have a quota on the year. It will vary a bit with time it is actually sold and recorded in our books. This quarter, we are increasing our guidance from 350-400 to 400- 450, which is then an indication that the business is going better than what we expected a quarter ago. Looking at what was booked this quarter, it is a margin not too far from last year. As written in our report, we have built significant inventory, which poses well for profitability in this segment in Q3 and Q4. In sum then, operational revenue is down. Key driver there is the lower harvest volume in salmon and trout. We see our operational limit is slightly down, and I have then talked through the key drivers behind that.
At our Capital Markets Day in March this year, we talked a lot about the capital and efficiency and that focus we have with us every day. In that light, it is positive to see that our total asset is actually reduced a bit this quarter, together with activity being at least at the same level as last year. No big changes worth mentioning is on inventory and also some comments going into second half. As Henning has commented and will comment on outlook, we are seeing a tightening market and that could increase together with higher volumes, will increase working capital in the market operation part. Higher feed cost will potentially increase working capital built in farming. Off-wing this is also the fact that we have a very high inventory of whitefish at the end of Q2, which will be sold in the second half.
That will limit the working capital effect of those factors. This quarter, we would like to say we have a strong cash flow, at least NOK 400 million in working capital, and despite paying out NOK 1.5 billion in dividends, the increase in debt is still at NOK 8.4 billion. CapEx, there are basically no changes to this slide compared to last quarter. This is developing according to plan. Key investment areas continues to be new technology in farming and an investment program for 2026, the Aquatraz, and Henning will comment on that shortly. We also like to include this slide to support the discussion in Norway, showing the ripple effects of our operations in Norway. This highlights that ripple effects of Lerøy is impacting the full country. We buy goods and services for 2025 of NOK 20 billion . We operate ourself in 50 municipalities.
We have employees which live in 190 municipalities. The impact direct and indirect in taxes is close to NOK 2 billion in 2025. This is important. This industry is very, very important for Norway. Then on our Capital Markets Day, we shed some light on key drivers within market operation. Primary processing, which is the slaughtering and filleting, first step of processing of salmon and trout. Sales and distribution, which is basically where Lerøy came from, in Hallvard Lerøy, which is sales and distribution of seafood globally, both operations out of Norway, but also our sales offices in different parts of the world. Then we have the consumer product part, which is higher value-added processing of products. For those who would like more input, please see our CMD. I will just highlight some of the key drivers within market operation this quarter, starting with sales and distribution.
We see up to the right, volumes are slightly down compared to last year. Profitability is slightly up. We have a healthy cost control, and we are seeing slightly higher margins this quarter than what we have seen in recent quarters. That was a good quarter. In consumer product, as Henning has highlighted, we are not 100% pleased with the profitability this quarter, which is down from last year. This is driven by, firstly, the fact that we have less favorable contract positions this year, but also we have one unit which had a low profitability level this quarter, which will be significantly improved in coming quarter. We expect, as of today, significantly higher profitability in this part of our business in second half of 2026.
Also fair to comment is the fact that you can see that the work on cost is continuing to lower the cost position, which is good. Finally, within primary processing. As said at the Capital Markets Day, we are then moving all primary processing to be reported within market operation in one business unit, and we believe this will strengthen the competitiveness of our business over time. This is done with effect from 1st of January, which is explaining the higher volume. We see that this is a low margin business, but it is still then a margin running stable and good business. In first half, the impact is around NOK 50 million, and we expect full-year impact from this change to be around NOK 120 million, then moving the reported profit from farming to market operation. Also, as said, within Wild Catch, we have a quota for the year.
We show this model on the Capital Markets Day. I would just like to give an update to back why are we now estimating NOK 400 million- NOK 450 million in operational EBIT this year. This is the model. This is development in key drivers, and the core driver, compared to previous quarter, is the fact that volumes are slightly down, but also we have then reduced the fuel consumption and the fuel price. These are key factors, together with continued high prices, to why we now estimate profitability between NOK 400 million and NOK 450 million on operational EBIT level, which is a significant increase from sub NOK 300 million last year. We have a look forward, and I give the word to you, Henning.
Thank you, Sjur. I will take a short outlook at the end. We start with the Atlantic salmon supply side. I think the first thing we should look at is 2025 numbers and the increase in supply of 12% that year. We see in 2026, we see a global increase of about 3%. But I think most of this increase has already been taken out in 2026. I think going forward, we will see lower volume globally into the market. We also expect a 2.6% increase in supply growth for 2027. The extreme increase in supply is, in a way, over. We also see that the major markets is demanding more Atlantic salmon, and especially the overseas markets.
And we see running into the summer, in July and in August, we also see that the demand is increasing with higher prices than last year. If you look at the different segments in Lerøy, as I said, we have a very strong biological performance, and we believe that this will continue. The cost reduction program is progressing as planned. This will be significantly reduced the impact of higher feed price, which is expected in 2027. We expect a harvest volume of 195,000 tons this year. And we believe that we have, with the biological improvements that we are doing in the farming value chain, we believe that we are on a good track to also for our long-term goals. Wild catch price development outweighs lower catch volumes and significantly higher fuel price. A positive operational development in land industry also starting to show in financial.
It is really good to see, and we believe that this improvements program that has been running in the industry of white fish is really starting to show results. Market operation, lower salmon and trout prices are building markets the last couple of years. Increased demand for integrated sustainable value chain. Strong demand in emerging markets. For second half of 2026, operational EBIT is expected to be in the same range as H2 2025. In the long term, the guidance and long-term ambitions, repeat in farming, 195,000 tons in the short term. Cost per kilo lower than 2025 for the whole year 2026. And we believe that we are on a track to 220,000 tons in volumes in 2030, and also the number one relatively cost position in all regions.
The wild catch price development outweigh lower quota and higher fuel cost, and indicative operational EBIT of NOK 400 million-NOK 450 million , and for 2030 profitability growth with the quota growth. As we see that there will be a growth for the expectation for quota is 10% up for cod and about 17% for haddock. Market operations 2026 compared to 2025, continued growth at slightly lower margins. And we believe that we also, with the improvement programs in this segment, we also believe that we have a good direction towards the NOK 2 billion EBIT for this segment. Then at the end, I want to dig a little bit into new technologies that we are doing in farming. And we are doing a lot. And we have the shielded technology and the submerged farming, which we have been a pioneer in the development of this.
And we are doing laser technology. We are doing semi-closed systems. We are doing. The technology improvements and development is really going fast. Now we, especially for this region, which has been historically the most challenging region, we are now investing into closed cages from end of this year. And we have made a small movie showing how this will look, and we have great expectation that this technology would make great improvements and also will give us in a better positions to increase the volume in the west region. Then thank you very much and enjoy the movie.