Good morning, and welcome to Lerøy Seafood Group's second quarter presentation of 2021. My name is Henning Beltestad. I'm CEO of Lerøy Seafood Group, and with me today, I have Sjur Malm, CFO of Lerøy Seafood 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. The large, extensive investments we have made over a long period of time are now starting to yield results. We still have a way to go to achieve our goal. 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.
Our goal is to be the leading within fishery, to be the best within industry of whitefish, to be the best in smolt 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. If we manage to do that, we will also be the preferred supplier by our customers and the leading customers all over the world. This quarter, I will take you through the highlights, then Sjur Malm will take you to the key financial figures, and then I will come back and talk about the outlook and what we expect going forward. Lerøy Seafood Group report in three segments, Farming, Wild Catch, and VAP, Sales and Distribution.
Second quarter highlights. We achieved EBIT before fair value adjustments of NOK 583 million. We had an EBIT kilo, all inclusive, of NOK 13.8. In this quarter, we have a net interest-bearing debt of NOK 4.2 million, and we paid NOK 2 per share in dividend in the quarter. We are on track to achieve our guidance from earlier this year. We believe that we will reach about 210,000 ton gutted weight for 2021. 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 ton for 2021. If we look at farming, the prices in second quarter has been higher than same period last year. Up about close to NOK 5, up 8%, and NOK 10 higher compared to first quarter.
The first half and also in second quarter, the trout market has been in a good balance. Also the price achievement for trout has been at a good level. Our price realization are impacted by quality downgrades also in second quarter, as we also had in first quarter. The cost has increased from first quarter, but lower than second quarter last year. This quarter, we have had a satisfactory production and expect lower cost going forward and for second half of 2021. We expect that fourth quarter will be a lower cost than third quarter. The EBIT in farming is NOK 10.6 compared to NOK 5.5 in second quarter 2020. The guided volumes, the farming volumes, it's for Lerøy Aurora in north. We expect 47,000 ton up from 35,000 ton 2020. Lerøy Midt, 70,000 ton up from 68,000 ton.
Lerøy Sjøtroll 75,000 ton up from 68,000 ton. The total volume in Norway of 192,000 ton. Norskott Havbruk, our share, 50% of Norskott Havbruk is 18,000 ton, which brings us to estimate of 210,000 ton in 2021. For wild catch and whitefish, we have had a good quarter, especially compared to last year. I think we have a NOK 70 million improvement. The price realization in the second quarter is still impacted by a restriction from COVID-19, but we see that the prices now are increasing compared to first quarter. We see a continuously price improvement going into second half of this year for whitefish. We have a very favorable quota situation for the remainder of this year. Good volumes of especially cod.
We see significant improvements in the land-based industry and it's really good to see that we step by step improve our activity in this part of the value chain. 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. 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. Like I said, we have a very good situation regarding the remaining of our quota, so close to 14,000 ton of cod compared to 8,800 ton last year. Say 8,500 ton. Haddock 7,000 ton compared to 3,700 ton last year. A remaining total of 29,000 ton.
In addition to that, we have continued to fish shrimps going into third quarter and which also will lift this volume. We have the VAP, Sales and Distribution. Very good quarter. We see gradually positive impact from less restrictions in the market related to COVID-19. We also feel that underlying demand from seafood remains very strong and it's improving going forward. In this quarter, we have especially two startups in Spain, in Madrid, and also in Italy. We all know that with these kind of startups, it's also some cost involved and some focus that will be a potential of improvement going forward when we get these activities up and running like we want to have them.
For VAP, Sales and Distribution now we really feel that we have a very good setup, a good base with good capacity, and are ready to develop the seafood category together with our partners in all major markets all over the world. This quarter, EBIT of NOK 161 million compared to NOK 114 second quarter 2020. Sjur will take us through the key financial figures.
Yes, thank you, Henning. Some small technical issues. In this quarter, which basically is a 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 tons. This year we're heading towards 192,000 tons. Obviously, that's not already harvested and as always, there is risk involved in the autumn period. Our report today is that we are currently heading towards that target. That would imply a significant growth over the last years, and an organic growth following investments in our own value chain. At least we are happy on development and production volume and farming recent years, and we believe we have potential to grow further.
To 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. Also we are seeing operational improvement in the land industry, which is helping profitability. That's positive. Looking into the downstream operations, combining four last quarters, our run rate in operating result is close to NOK 600 million. It's basically doubled since 2018. We believe that the long-term trends and what we are heading towards is 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 red fish, which again is related to winter wounds, which brings a lower price realization and also impact time of harvest and production volume. 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. Looking into the numbers themselves. On red fish, 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. A significant improvement in red fish profitability, but the potential would obviously have been even higher with less downgrades. In white fish, we have a lower catch volume. Those catches have still higher value, and we have a significant improvement in the land-based industry. You can see there's a significant lift in the profitability per kilo in white fish.
In sum, this brings our operating result EBIT from NOK 322 million to NOK 583 million this year. A significant improvement. Key driver in associate is Norskott Havbruk plus Scottish Sea Farms, which I will return to. We see that the pre-tax profit is up 91% from last year. Looking at the same for year to date, we can see that harvest volume of red fish, meaning salmon and trout, is basically the same. Our profitability per kilo is lower. Our cost is lower, so that's related to price realization. In white fish, you can see profitability is exactly the same, a lower volume. We have excellent quota situation for second half. 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 started impacting the price and the market.
It's a tough comparison. This brings EBIT year to date at just above NOK 1 billion, which is down NOK 100 million from last year. There'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. You see the pre-tax 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 to invest in our value chain. The most significant investment currently is the new smolt facility in Central Norway, which is according to plan. Our non-current asset is up 7% from last year. Looking at the biological asset or then red fish 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 and weight is increased even more. The current cost of biomass is lower per kilo than one year ago. No big changes in other inventory. Revenue is up, receivable is up. In general, we believe we have a very strong balance sheet, a high equity ratio, net interest-bearing debt at around NOK 4.2 billion. Looking at the cash flow here shown as changes in net interest-bearing debt. I think the most interesting is looking at year-to-date figures. The two key factors in the second quarter is the acquisition in Denmark and it's the dividend payment. That's the reason to why net interest-bearing debt has increased. If you look on numbers year to date, we can see that year to date, the EBITDA is about the same level.
Tax is a little bit down. The big change in operating cash is release of cash flow this year compared to the opposite last year, which brings a better operating cash. Cash and investment is not that changed, but you can see our CapEx is lower. 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 NOK 1.3-ish billion, NOK 1.4 billion. Dividends are up from last year. You can see overall our net interest bearing debt increased close to NOK 900 million last year and close to NOK 700 million this year. The increase is less this year despite the higher dividend and the key quarter over there is the development in working capital. This slide we've included to show the development in the different segments.
What we see is that farming is up, wild catch is up, and Sales and Distribution is up. 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 2021. That impact price realization, it also impact harvest volume. This quarter is a quarter with a very low harvest volume, a high share of downgrades, and basically a 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.
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 here to date, with Q4 as the lowest quarter, and we will see a significant improvement in quality. 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 the good production. In this region, it was very cold in Q1, and we caught up 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.
Our investment there is the new smolt facility, which is en route to be finished around New Year. That will give room for organic growth for the years to come. In Lerøy Sjøtroll, we've had several challenging year before. The underlying theme there, which we have communicated, is that there is ongoing improvement that's driven by investment in smolt, in wellboats, 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, our cost is down. 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 trout prices did not develop as positively as the salmon prices.
We are en route to the 75,000 tonnes we've guided, which implies a significant growth over recent years, and we are en route to see lower cost, particularly in Q4, and step upwards a little bit in Q3. Within our wild catch segment, this has basically already been covered. Our catches are down in some species and the prioritized catches have been shrimps and haddock, which has a higher value. That brings a higher catch value, a higher profitability in the trawling fleet, and we are seeing improvement in the land-based industry. 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 and consolidation of Seafood Danmark. Also looking away from that, we are seeing and that company is consolidated from 1st of April.
We are seeing very positive development in many of our assets. In this segment, we have 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. We believe we are en route to grow this part of our business. It has a substantial potential. As I said, the last four quarters is not too far from NOK 600 million, which indicates not the potential, but indicates a good growth from what we saw some years ago. Scottish Sea Farms is owned by Norskott Havbruk, which is again owned 50% by us and 50% by SalMar. This quarter, a very high harvest volume, and actually the highest harvest volume ever recorded in the company. We are en route to reaching the guidance of 36,000 tons.
Cost development is impacted, among others, by harvest volumes out of Shetland. We expect a cost reduction in coming quarter. Also in growth, Scottish Sea Farms entered an agreement with Grieg Seafood to buy Grieg Seafood's U.K. asset during second quarter. The likely transaction will materialize in Q4. Then we will be in position to give more indication of that potential. At least it is an indication that Scottish Sea Farms has intentions to grow. Then the outlook, Henning.
Yeah. Yeah. We're going to look into the future. I will start with the supply side and demand side and what we expect from going forward. We start with the supply side. If we look at 2021 first, we see Europe is expected up 10%, Norway up 8%, and the Americas down 9.5%, and we have Chile down 15%. 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 a higher growth in the Americas with 7.1%, and a global growth of 4%. 3% this year, 4% next year. It's not a dramatic growth in supply. We believe that the market is coming more and more back, especially the HORECA segment, which will increase the demand for seafood and especially salmon and trout going forward.
If we look at the price development, we see it's bumpy, like always. We see that this year we started with first quarter NOK 52, second quarter NOK 63, and so far in third quarter, NOK 60. If we compare the second quarter last year with second quarter this year, we see third quarter this year and third quarter last year, we see an increase of NOK 30. 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. We have a positive view on the future. Also if you look at the fourth quarter last year, 2020, it was down to NOK 43.
Yeah, we believe that we will have much higher prices second half year 2021 compared to 2020. If we look at the supply side in Norway, on a monthly basis, we see we had a very good growth the first quarter, and in second quarter was especially the June, where we had a good growth of 17%. Then we will see the rest of the year, we have a growth of between 3% and 8%. Yeah. We believe that the market will increase the demand month by month going to the end of this year and also into 2022. Same if we look at the worldwide. A 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, second quarter, EU up 2%, U.S.A. up 24%. A really good increase in U.S. It's very positive to see that a market with these sizes is growing with these numbers. That's very positive. We also have the other markets up 6%. In this market, we also believe that the demand will be good going forward with good availability of the right sizes. If we look at the other markets, Brazil is up 51%, China is down 25%. I think the main reason for that reduction is availability of fish from Chile. We also see that Norway's position in the Chinese market is stronger now than what we have seen historically the last 10, 12 years. 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. We believe that this will be solved in short term. We believe, like I said again, that we will see a gradual lift of restriction related to COVID-19 and a positive demand development. We expect significant growth in harvest volume and lower cost from improvements, efforts, and investment in smolt facilities. We keep our guiding of 210,000 tons, including associates, Scottish Sea Farms, our share of associate Scottish Sea Farms, and we expect a contract share of 20% in the quarter. We have a significant potential in whitefish. The quota situation for us and the remaining quota is very positive, especially for the cod where we have 14,000 tons left on a quota for second half.
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. We see a significant potential for further development of our downstream value chain. We report a lot on finance and growth and cost and prices and demand and supply, but I think now 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. We also need to perform on sustainability. We have set ambitious targets for the reduction of an emission of climate gas, the science-based target.
We commit ourselves to go for a goal of reduction of 46% by 2030 compared to base year of 2019. This target is in accordance with the 1.5 degree goal in Paris Agreement. Our target was approved by a science-based target the 6th of May. 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. Overview of Lerøy's emission in Scope 1, 2 and 3, and projections for reduction. We see that some areas will make a stronger impact than other areas. For us, of course, all areas, Scope 1, 2, 3, will be important. We will work with a good plan to reduce in all parts.
If we look at the most important scope, we have the Scope 3, which is fish feed. That means that we really need to work hard together with our suppliers in achieving our goals. Also Scope 3 downstream transportation, where we have a huge potential of improvement. We believe that the new raw material need to be more fillets, not whole fish sending all over the world. We believe reducing that and more to value added products in Norway, more fillets will help us going forward achieving this goal. We have good capacities of filleting in all our regions. We will focus a lot on that going forward to achieve this 2030 goal. We have to come up with smart solution and work hard together with our customers and to work very hard together with our suppliers and especially within transportation.
That's what we had for this quarter and thank you very much for watching.