Good morning, and welcome to Leer Seifi Group's Second Quarter Presentation of 2021. My name is Henning Belssa. I'm CEO of Leer Seapur Group. And with me today, I have Sjoerd Mann, CFO of Leer Seapur Group. First of all, I want to show you our fantastic value chain.
Our goal is to create the world's most efficient and sustainable value chain for seafood. And the large extensive investments We have made over a long period of time are now starting to yield results. But we still have a Way to go to achieve our goal. And but we believe with our employees And the focus in all parts of the segments will take us going forward. And we believe that we will reach this goal
in some
years ahead. But our goal is to be the leading in within fishery to be the best within industry of whitefish, To be the best in small production, to be the best in farming, to be the Best in processing to be the best in value added products production like smoked and sushi and widespread of these kind of products and to be the best in sales and distribution. And if we manage to do that, we will also be the preferred supplier by our customers and the leading customers all over the world. But first of all, this quarter, I will take you through the highlights, then Sjur, Mann, will take you through the key financial figures, And then I will come back and talk about the outlook and what we expect going forward. First of all, let us see for group report in 3 segments: Farming, Wild Catch and WAP Sales and Distribution.
And 2nd quarter highlights. We achieved EBIT before fair value adjustments of SEK 583,000,000. We had EBIT kilo all inclusive of 13.8 And in this quarter, we have a net interest bearing debt of NOK 4,200,000 and we paid NOK 2 NOK2 per share in dividend in the quarter. And we are on track to achieve our guidance from earlier this year. And we believe that we will reach about 210,000 tonne gutted weight for 2021.
And we believe we have a potential for further growth beyond this. It's been a very strong quarter for Downstream and also for Whitefish, and we estimate to fish about 72,000 tonne for 2020 If we look at Farming, the prices in 2nd quarter has been higher than same period last year. So up about close to NOK 5, up 8% and 10 NOK higher compared to 1st quarter. The first half and also in Q2, the trough market has been in a good balance. So also the price achievement for Trollto has been at a good level.
And but our price realization are impacted by quality downgrades also in 2nd quarter as we also had in Q1. The cost has increased from Q1, but lower than Q2 last year. And this quarter, we have had Factory production and expect lower cost going forward and for second half of 2021. And we expect that 4th quarter will be lower cost than 3rd quarter. The EBIT in Farming is NOK 10.6 compared to NOK 5.5 in the Q2 'twenty.
The guided volumes, the farming volumes, it's For Lere Ruhr in North, we expect 47,000 tonne, up from 35,000 tonne 2020. Leerimit, 70,000 tonne, up from 68,000 tonne and Leerajotol, 75,000 tonne, up from 68,000 tonne. And the total volume in Norway of 192,000 tonne. And then in Noskod Harburg over share, 50% of For Norskrad Hardwick is 18,000 tonne, which brings us to estimate of 210,000 tonne in 2021. For Wild Catch and Whitefish, We have had a good quarter, especially compared to last year.
So I think we have a NOK 70,000,000 improvement. The price realization in the second quarter is still impacted by restriction from COVID-nineteen. But we see that the prices now are increasing compared to 1st quarter. And also, we see a continuously price improvement going into second half of this year for Whitefish. We have a very favorable quarter situation for the remainder of this year.
Good volumes of especially Cod. And We see significant improvements in the land based industry, and it's really good to see that we step by step improve our activity and in this part of the value chain. And we believe that we also will see these improvements going forward, even though that we also need to handle increased raw material prices if that's the situation. But we feel that we have the right organization, the right structure And the right cooperation in our value chain to improve this part going forward. Yes.
Like I said, we have a very good situation Regarding the remaining of the our quarter, so close to 14,000 tonne of code compared to 8,800 tonne last year, SAID, 8,500 tonne, Head Dock 7,000 tonne compared to 3,700 tonne last year. So a remaining total of 29,000 tonne. And in addition to that, we have continued to fish shrimps going into Q3 and which also will lift this volume, yes. Then we have the WAP Sales and Distribution, very good quarter. We see gradually positive impact from less restrictions in the market related to COVID.
And we also feel that underlying demand from seafood remains very strong, and it's improving going forward. In this quarter, we have especially 2 startups in Spain, in Madrid and also in Italy. And we all know that with these kind of start ups, it's also some cost involved and some focus that Can that will be a potential of improvement going forward when we get these activities up and running like we want to have them. But for WAP Sales and Distribution now, we really feel that we have a very good setup, a good base with good capacity and already to develop Seaford category together with our partners in all major markets all over the world. But this quarter, I think EBIT of NOK 161,000,000 compared to NOK 114,000,000, second quarter 'twenty.
Danjur will take us through the key financial figures.
Yes. Thank you, Henning. Some small technical issues. So in this quarter, Which basically is the report on where we're heading compared to our goals. There are some things we are happy about And obviously some things we are not 100% happy about.
Look into the farming operation. In 2019, our harvest volume was 158,000 tonnes. This year, we're heading towards 192,000 tonnes. Obviously, that's not already harvested. And as always, there is risk involved in the autumn period.
But our report today is that we are currently heading towards that target. That would imply a significant growth over the last years following an organic growth following investments in our own value chain, But at least we are happy on development and production volume in the farming recent years, and we believe that we have potential to go further. If you look into the Whitefish business, Henning has already commented upon the fact that we've done good choices when it comes to utilizing our quota. And also, we are seeing operational improvement in the land industry, which is helping profitability. So that's positive.
Looking into the Downstream operations, Combining 4 last quarters, our run rate in operating result is close to SEK600 1,000,000. And in 2018, it's basically doubled since 2018. So we believe that the long term trends And what we are heading towards is kind of like confirmed in this quarter. That doesn't mean that everything was perfect. And obviously, Our core challenge this quarter has been related to downgrades on Redfish, which again is related to winter wounds, which brings lower price realization and also impact harvest time of harvest and production volume, but price realization is the most obvious factor.
That is a key challenge to improve, and that's obviously one of our absolute key focuses for the years to come. Then looking into the numbers themselves. On Redfish, we see we've harvested 6% less volume this quarter compared to last year. Our profitability per kilo is significantly up compared to the period last year. Our cost is down And price realization is up and also contribution from downstream is up.
So a significant improvement in Redfish profitability, but the potential would obviously have been even higher with less downgrades. In Whitefish, We have a lower catch volume. Those catches have still higher value and we have a significant improvement in the land based industry. So So you can see there's a significant lift in the profitability per kilo in Whitefish. And in sum, this brings our operating result to EBIT from SEK 322,000,000 to SEK583,000,000 this year, a significant improvement.
Key driver in associate is Nosgoth Harburg for Scottish Sea Farms, which I will return to. But we see that pre tax profit is up 91% from last year. Looking at the same for year to date, we can see that harvest volume of redfish, meaning Salmon and trout is basically the same. Our profitability per kilo is lower, our cost is lower, that's related to price realization. In Whitefish, we consider profitability is exactly the same, lower volume.
We have excellent quarter situation for second half. And what's also worth mentioning in the comparison number is Q1 2020 because we were perhaps lucky in that we sold significant volume of the quota last year before COVID start impacting the price and the market. So it's a tough comparison. This brings EBIT year to date at just above SEK1 billion, which is down SEK100 1,000,000 from last year. That's a significant improvement in associates.
Net finance is down. One reason is that we had significant impact from basically market turmoil connected to COVID And changes in, among others, currency rates last year. And you see the pretax is at same level as last year. Looking at the balance sheet on the asset side, we have made one acquisition in Denmark. We have also Continued invest in our value chain.
The most significant investment currently is the new small facility in Central Norway, which is according to plan. And our non current asset is up 7% from last year. Looking at the biological asset or Then Redfish in C, you see that number is up 7%. If you look into the notes of the report, you'll find that the standing biomass in weight is increased even more. So the current cost of biomass is lower per kilo than 1 year ago.
No big changes in other inventory, revenues up, receivables up. But in general, we believe we have a very strong balance sheet, high equity ratio, net interest bearing debt at around CHF 4,200,000,000 And looking at the cash flow Here showing us changes and net interest bearing that I think the most interesting is looking at year to date figures. But the 2 Key factors in the Q2 is the acquisition in Denmark and it's the dividend payment. And that's the reason to why net interest bearing debt has increased. If you look at numbers year to date, we can see that Year to date, the EBITDA is about the same level.
The taxes is a little bit down, a big change in operating. I think cash is release of cash flow this year compared to the opposite last year, which brings better operating cash. Cash and investment is not that changed, but you can see our CapEx is lower. And the reason to why it's the same level is the acquisition in Denmark as the core driver. When you look at CapEx for the year, we are currently heading towards NOK1.3 ish, NOK1.4 billion.
Dividends are up from last year. And you can see overall net interest bearing debt increased Close to SEK900 1,000,000 last year and close to SEK700 1,000,000 this year. Reduction is or the increase is less this year despite Higher dividend and the key quarter over there is the development in working capital. Then this slide we've included to show the development in the different segments. And kind of like what we see is that farming is up, Wildcatches up and sales and distribution is up.
So we get into the underlying assets behind this development. In Aurora, as we've highlighted, since basically Q4, we would see significant challenges with downgrades in first half of twenty twenty one. That impact price realization. It also impact harvest volume. And this quarter is a quarter with a very low harvest volume, high share of downgrades and basically poor quarter.
Still, margins is higher than last year and cost is lower than last year, but also Q2 last year was a weak quarter. What happened last year was that we saw a significant improvement in quality into second half, where the majority of biomass was harvested, and we see much of the same development this year. So of the volume we are going to harvest in 2021, 70% is going to be In the second half, it will be at a significant lower cost point than what we've seen year to date, with Q4 as the lowest quarter, and we will see a significant improvement in quality. So at least the company at Decent market conditions are set for a substantial increase in profitability in second half. In Central Norway, We've had a good production.
So in this region, it was very cold in Q1 and we caught up And when it comes to production in Q2, also here, we have had significant impact of downgrades in the quarter, which is impacting profitability. Cost development is down, so Price development is the reason why we do not see the same kind of increase in EBIT kilo as we see in spot price development. For investment here is the new small facility, which is on route to be finished around New Year, And that will give room for organic growth for the years to come. In Leve Schottel, we've had Several challenging year than before. And the online theme there, which we have communicated, is that There is ongoing improvement.
It's driven by investment in smalt, in well boats, in vaccines across the value chain in better operation, and we see that that trend is continuing, and it's very visible in that margin chart. This quarter cost is down, but also here we are seeing impacts from downgrades, which is impacting the margin level and is a key reason to why there's not a bigger increase from Q1 to Q2 where there was a price increase. Also worth mentioning is that the truck prices did not develop as positively as the salmon prices. We are on route to the 75,000 tonnes we've guided, which implies a significant growth over recent years. And we are on route to see lower cost, particularly in Q4 and step by us a little bit in Q3.
Within Wild Catch segment, this has basically already been covered. Our catches are down in some species and they prioritized catches have been shrimps and haddock which has a higher value. And that brings a higher catch value, higher profitability in the trawling fleet and we are seeing improvement in the land based industry. So this is still challenging, but it's still a significant improvement from last year. In our Downstream operations, there is one effect from the acquisition of a consolidation of Sifu Danmark.
But also looking away from that, we are seeing very and that company is consolidated from 1st April. We are seeing very positive development in many of our assets. In this segment, we've started a lot of activities and new factories over recent years. So we have continuously been seeing some start up costs. Currently, those are related to Spain and Italy, but we are we believe we are on route to grow This part of our business has a substantial potential.
And as I said, the Last four quarters is not too far from SEK600 1,000,000, which indicates not the potential, but indicates a good growth from what we saw some years ago. Then Scottish Seafarm is owned by Noskot Havok, which is again is owned 50% by us and 50% by by Sverdrup Hallmark. This quarter, very high harvest volume and actually the highest harvest volume ever recorded in the company. So we are on route to reaching the guidance of 36,000 tonnes. Cost development This impacted, among others, by harvest volumes out of Shetland, and we expect a cost reduction in the coming quarter.
Also in quote, Scottish Seafound entered an agreement with Keg seafood to buy Keg seafood's UK asset during Q2 and the likely transaction will materialize in Q4. And then we will be in position to give more indication of that potential. At least, it is an indication that Sysco, the C Firm has intentions to grow. And then the outlook there, Henning.
Yes. Then we're going to Looking to the future, I will start with the supply side, the demand side and what we Expect from going forward and we start with the supply side. If we look at 2021 first, you see Europe is expected up 10% Norway, up 8% and Americas up 9% down 9.5% And we have Chile down 15%, so a global growth of close to 3%. If we look at 2022, we see a slower growth in Europe, 2.5%, Norway is up 3%. And we see higher growth in In Americas, and with 7.1% and a global growth of 4%.
So 3% this year, 4% next year. It's not a dramatic growth in supply. And we believe that The market is coming more and more back, especially is the demand for seafood and especially in salmon and trout going forward. And if we look at The price development, we see this is pumpy like always. But we see That this year, we started with NOK 50 1st quarter NOK 52, 2nd quarter NOK 63 NOK and so far In Q3, NOK 60.
And if we compare the 2nd quarter last year with 2nd quarter this year, we see it's up. Now it's Q3 this year and Q3 last year, we see an increase of NOK 30. So That's a kind of explanation of or A reason why we can claim that the market is increasing again, and we are seeing the end of the COVID '19 impact on the demand of seafood. So we have a positive view on the future. And also, if you look at the Q4 last year, 2020, it was down to NOK 43.
So yes, we believe that we will have Much higher prices second half year twenty twenty one compared to 2020. If we look at the supply side in Norway on a monthly basis, we see we had a very good growth in the first quarter. And we had a in 2nd quarter, especially the June, where we had a good growth of 17%. And then we will see the rest of the year, we have a growth of between 3% 8%. So yes, and we believe that the market will increase the demand Step month by month, going to the end of this year and also into 2022.
And same way, if we look at the worldwide, a good increase good growth first half and a negative growth second half, which also will affect the price level in combination with higher demand. If we look at consumption, 2nd quarter, EU up 2%, USA up 24% and a really, really good increase in U. S. And so it's very positive See that the market with this size is growing with these numbers. So that's very positive.
And then we also have the other markets up 6%. And we also in this market, we also believe that the demand will Big good going forward with good availability of rightsizers. And if we look at the other markets, we Brazil is up 51%, China is down 21%, 25%. And I think the main reason for that reduction is Availability of fish from Chile, but we also see that the Norway's position in the Chinese market It's stronger now than what we have seen historically, the last 10, 12 years. And So and we think that the China market will also come back.
There is some restrictions, some difficulties at the airports that make it special at the moment. But we believe that this will be sold in short term. And we believe, like I said, again, that We will see a gradual lift of restriction related to COVID-nineteen and a positive demand development. And we expect significant growth in harvest volume and lower costs from improvements, efforts and investment in small facilities. We keep our guiding of 210,000 tonne including associates, Scott De Cifan, our share of associate Scott De Cifan.
And we expect the contract share of 20% in the quarter. And we have a significant potential in Whitefish. The quarter situation for us and the remaining quota is So very positive, especially for the cord where we have 14,000 tonne left on a quarter for second half. And also going into 2022, we see that the quotas is coming down, And we should expect that the prices second half and going into 2022, we will see a higher price level for Whitefish. And we see a significant And then it's, we report a lot on finance and growth and cost and prices and Demand and supply, and I think now it's we really Feel the focus from consumers, from the world in general and from investors.
And the focus now is increasing a lot on sustainability. We have said that we want to create the world's most efficient and sustainable value chain for seafood. And so we also need to perform on sustainability. And we have set The ambitious targets for the reduction of in emission of climate gas, the science based target. So we commit ourselves to go for a goal of reduction of 46% by 2,030 compared to base year of 2019.
And this target is in accordance So with the 1.5 degree goal in Paris agreement. And yes, And our target was approved by ScienceBaseTarget the 6th May. And but this is a hairy goal. We believe that with our organization, with our focus, we believe that we can manage to do this. And we will do our best in all parts of the value chain to reach this.
And overview of LERA submission in scope 1, 2 and 3 and projections for reduction. We see that some areas will make a stronger impact than other areas. But for us, of course, all areas, Scope 1, 2, 3 will be important. So we will work with a good plan to reduce in all parts. But if we look at the most important scope, we have the scope 3, which is fish feed.
So that means that we really need to work out together with our suppliers in achieving our goals. So and also Scope 3 Downstream Transportation, where we have a Huge potential of improvement. We believe that we need to The new raw material need to be more fillets, not whole fish, sending all over the world. And we believe reducing that we and more and more to value added products in Norway, More affiliates will help us going forward, achieving this goal. And we have good capacities of filleting in all our regions.
And we will focus a lot on that going forward to achieve this 2030 goal. So we have to come up with smart solution. And We work hard together with our customers and to work very hard together with our suppliers and especially within transportation.
Yeah.
So that's what we had for this quarter. And thank you very much for watching.