Welcome to Lerøy Seafood Group's second quarter presentation 2024. My name is Henning Beltestad, CEO in Lerøy Seafood Group, and with me today I have Sjur Malm, CFO. First of all, I will take you through the highlights in the quarter. Sjur Malm will take you through the key financial highlights. Then I will come back again and talk about the outlook for the company and also the industry.
First of all, we start, as always, with our main goal is to create the world's most efficient and sustainable value chain for seafood. We have invested through the last 20 years, going from a sales and export company to be a fully integrated company on red fish and on white fish, all the way to our own brands in shops and products in HORECA and distributions segment. We are proud of what we have done. We also see a huge potential of improvements in the whole value chain.
The quarter, we had an operational EBIT of NOK 906 million. It's been a quarter with strong biological development from farming in Norway. Also we see a strong improvement in biology and earnings in Scottish Sea Farms. Really good to see after some challenging years behind us. Continued positive development for VAP Sales and Distribution segment. Significant year-on-year reduction in Wild Catch earnings due to lower quotas. We see that we are affected, especially in this quarter. Guidance and targets is maintained. In second quarter, we paid a dividend of NOK 2.50 per share.
Lerøy Seafood Group reports in three segment, Farming, Wild Catch, VAP Sales and Distribution. We start with the farming highlights. As I said, a strong biological development in first half 2024. We have increased the harvest weights to 4.7 kg in second quarter, compared to 3.9kg second quarter 2023. Shielding technology remaining promising. Quarterly harvest volume increased by 24%. There has been a quarter where we see substantial spot price decline second half of the quarter. This quarter, timing has never been more important. Cost increase year- on- year, but adjusted for inflation, cost are down.
Lerøy Aurora in north of Norway. Very strong biological performance with high survival rate. Price achievement positively impacted by high share of harvest early in the quarter. Low harvest volume driving, as expected, quarter -on- quarter increase in cost. We see a large increase in the harvest volume in third quarter 2024 at significantly lower cost. Estimated harvest volume is 47,000 ton for 2024.
If we look at the EBIT performance, it's a strong performance at NOK 37 per kilo through the value chain. Lerøy Midt, also a strong quarter. Continues strong in biological development. Increased harvest volume going from 10,000 ton to close to 16,000 ton. Increased harvest weights also here from 3.9kg to 4.6 kg. Reduced cost. We keep our harvest guidance of 70,000 ton. For third quarter, we see somewhat higher harvest level at about same cost level.
Successful first harvest of submerged salmon at Fugløya in August 2024 was harvested last week with good results. Lerøy Sjøtroll continued in improvement in key biological KPIs, increased harvest volume, increased harvest weights, significantly an increase in survival rate. But some issues with the ISA accelerated harvest and high harvest volume in June at low prices end of the quarter.
We will start first harvest of submerged and shielded production in third quarter 2024. Harvest guidance unchanged at 58,000 tons. We had an operational EBIT per kilo value chain of NOK 13.5 in this quarter. Norskott Havbruk, 50% owned by Lerøy and 50% owned by SalMar. Really good to see the improvements that is done in Scotland. Strong biological development in the quarter, and the next generation of fish is performing well. Significant year-on-year increase in harvest volume, harvest weights, and growth while reducing mortality. If we look at the harvest weight, it is going from 3.5kg to 5.3 kg in second quarter 2024. That is really good to see. We see a significant potential for growth beyond 2024. Good performance by Norskott Havbruk, and we are really happy to see this development.
Farming volumes, the guiding, we keep the guiding at 175,000 tons in Norway, 47,000 tons in Lerøy Aurora, 70,000 tons in Lerøy Midt, and 58,000 tons in Lerøy Sjøtroll. Our 50% share in Scottish Sea Farms is 18,500. So a total of 193,500 tons. We keep our target for 2025 at 200,000 tons in Norway. That means an increase of 25,000 tons going into next year. Wild Catch highlights this quarter, a significant quota reduction, catch volumes down 25% year-on-year and reduced profitability. Positive price development, I think it is the highest cod prices I ever seen as long as I been involved in Lerøy Havfisk. Reduced cost, significant decline in catch value. Challenging outlook for remainder of 2024 and 2025. Quota advice for 2025 indicates lower quotas and new regulations will allocate quota from the trawling fleet to the coastal fleet.
It will be ups and downs in this segment going forward. But we keep improving, especially on the industry side and also on the fishing side, catching other species that can keep the volumes and the income as high as possible. Wild Catch quota for the second quarter. The catch volumes is 17,800 tons in second quarter 2024, compared to 23,700 tons. The remaining quota in total is 12,600 tons compared to 28,000 tons. Which will be challenging, especially for the industry, to have enough raw material at fair price level. Sales and processing operation in 14 countries. We have a good base now in developing in all the major markets, especially in Europe, but also good branch offices in Japan, China, and North America, which gives us a good spread in more than 80 countries.
We really believe that being fully integrated also on the market side is the way to go in the future. Highlights in this quarter, continued positive development in the segment. Higher profit compared to second quarter 2023, driven by operational improvements, high utilization in processing capacity in Norway, production prices better reflecting raw material prices. The expectations for continued positive profitability trend in second half, based on a belief on higher volume development in the key markets out there. We see that we lift the 12-month rolling, EBIT step-by-step. Believe that we will continue this development going into 2025. Then I give the word to Sjur.
Yes. Thank you, Henning. Then I am going to go through our financial statement, which basically is summing up what Henning has just presented. Starting with our profit loss statement, you can see the key value drivers on the lateral lines. On harvest volumes, our harvest volume is up 24% compared to last year. That is driven by improved biological performance, which is positive. It is also partially driven by some ISA-related accelerated harvest in the end of the quarter in Lerøy Sjøtroll. But good biological development overall and a high volume. Looking at the margin of that volume, we see that it is down around NOK 4 a kilo compared to last year. Those NOK 4 can be divided in price realization and cost. It is roughly equally divided.
Price realization is NOK 2 lower in this quarter, despite the significant weakening of the Norwegian kroner. That is a reflection of, firstly, the fact that salmon prices fell quite substantially during the quarter. Secondly, also that we harvested a bit more towards the end of the quarter in Lerøy Sjøtroll due to this ISA accelerated harvest. On cost, our costs are up basically on inflation driven by feed cost, which is up alone NOK 3 a kilo. Adjusting for feed cost alone as inflation factor, our cost is down and compared to overall inflation, our cost position is down. I would say overall, a healthy quarter in the red fish value chain.
Looking into whitefish , as highlighted, quotas are significantly reduced. That is the basis for operation, and both on the trawling fleet and also on the land-based industry. A lower quota means a lower catch volume m eans a different there is less cod and more lower value species. It does a lower cost, but as you see, there is a substantial fall in profitability. This year in the whitefish value chain is down NOK 100 million compared to last year. Looking then on our operational EBIT, which is down from NOK 950 million to NOK 906 million, knowing that whitefish, Wild Catch is down NOK 100 million, we know the other constitutes value-added processing and farming. They are both up.
If you look beyond this operation, as Henning highlighted, it is very positive, the development in U.K. and our Scottish operation, the joint venture with SalMar. Substantial improvement compared to last year, and that is impacting, obviously both our EPS and it is also impacting return on capital employed, which we see is up to close to 16% this quarter compared to 14% the same quarter last year. Looking at the balance sheet, it is quite a lot of data point. I think the core highlights is obviously the fact that it is a strong balance sheet. It is 50% equity share.
We are an investment-grade company, and it is also a quite big balance. This is a capital-intensive industry. We have done a lot of investments, which I will return to on next slide, where investments more recently is towards more fish welfare, particularly on the smolt side and on shielding technology. If you look on working capital, it is quite working capital-intensive industry, and our balance sheet has a substantial positive working capital item in sum. That is due to the fact that it takes the time it takes to grow a salmon. But a strong balance sheet, no big changes compared to last year. Looking at development in net interest-bearing debt, we had had a positive profitability, which reduces net debt.
We have increased working capital, which is basically driven by cost of biomass, which again is driven by feed cost. CapEx and also change in working capital, it is also related slightly to the fact that we have a larger share of the biomass in Lerøy Sjøtroll than what we have had recently. On CapEx, I will return to that on next slide. We have paid a dividend of NOK 2.50 per share. Net finance is up slightly from last year due to higher interest cost. Net debt at the end of the quarter is NOK 6.8 billion. Looking at CapEx, we would say that we have maintenance CapEx around NOK 900 million - NOK 1 billion with today's weak Norwegian kroner, perhaps NOK 1 billion is the better estimate.
On top of that, we are investing in particularly the factors Henning has highlighted and we will return to, which relates to smolt quality, roe quality, shielding technology. This year we are investing significantly into particular smolt quality and shielding technology. If you compare this slide to the similar slide previous quarter, the investment estimated in shielding technology was then NOK 500 million, now it is NOK 350 million. That is related to the fact that one of the suppliers of the semi-closed system is not able to supply four out of five units. We still believe we will be able to reach the overall target on shielding, which Henning will return to. Estimated CapEx then around NOK 1.6 billion.
In addition to this, we have bought MTB estimated close to 1,000 tons at around NOK 150 million. There is a lot of discussions in Norway relating to what is the footprint of this industry. This obviously relates to resource tax and a lot of the political discussions. There are some claimants saying that this industry does not make a footprint, and we have taken this slide to answer that. The best answer is basically just showing the facts. This slide is showing the some of the footprint of Lerøy's operation.
As you can see, it is a footprint along in a complete or overall of Norway. We are buying goods from 60 different municipalities. We have employees in 60, and we buy goods from 250 municipalities. We have close to 4,000 employees, and including indirect jobs, it is around 10,000 person in jobs related to our operation. Last year, we paid NOK 2.1 billion in taxes in total. We believe we have a substantial footprint and which is positive for also Norway. All right.
Thank you. I will take you through the outlook of what we do. Start with some of our strategic targets, and we believe that these targets still are achievable, being number one farming company, including VAP Sales and Distribution in 2025, NOK 1.25 billion EBIT in VAP Sales and Distribution in 2025. Reduction of 46% in total GHG emission by 2030, and achieve 200,000 ton harvest in 2025 in Norway. For VAP Sales and Distribution, we see continuous strong progress and promising outlook. We see on the left, the rolling 12 months, same quarter. Last year, we were at NOK 400 million. In second quarter 2024, we are up at NOK 827 million. We have, yeah, 55% lift for 2025, going up to NOK 1.25 billion in EBIT.
We believe with the investments that is done, all the dedicated work in improving all activity in this segment will take us to this goal. That is through short-term actions and long-term actions. Short-term actions, higher utilization of VAP factories through volume growth, achieving economy of scale. Improvement of VAP factories in certain European markets with expected substantial uplift in 2024. Lerøy Way principles implemented with clear targets, roles, and responsibility, action plan, market plans, and a culture for continuous improvements in the whole segment, in each company, and each department, and all the way to all our employees in the segment. The long-term actions, we have consumer products in our own value chain, sustainable logistics, implementing Lerøy, and increased flexibility and price achievement. We see step by step that we improve also on long-term goals.
For farming 2025 harvest, we targeted 200,000 tons, so that is a lift of 40,000 tons from 2023. We guided 175,000 tons this year, so a step of, yeah, up 25,000 tons compared to 2024. This will be done through operational efficient, through roe, smolt production, and technology development. Where are we? This picture is showing the effects on different initiatives that is done the last years and when it will give effect on harvested fish. If we start with the genetics. Genetics improvements that has been done the last couple of years will, step- by- step, give effect, not that much on this year, but we will see large improvements in first half next year and second half next year.
When it comes to improvement in roe production, we already see that we have effect on the fish that we harvest first half, same second half, and then we will see a high increase in the effect on first half and second half of 2025. For the smolt, it is the same, then we added also the results on shielding technology. We had the first harvest of shielding technology last week, and we will now start to take out some fish with this technology, and we will see the result of this end of this quarter and last quarter of the year. Then we will see a larger effect step by step going into 2025. This plan will take us to the 200,000 tons in production through improvements on these four areas.
If you look at the first half of the year, we had a strong biological performance. If you compare it to the last five years average, we see that we improved the net growth rate by 8% in first half of 2024, a reduction in mortality of 21% and 44% less lice treatment. It is a continued positive development in key biological drivers explained by improved roe, smolt, genetics, and new technology. Quality downgrades are gradually less of an issue during H1 2024 due to winter wounds and stinging jellyfish, and less winter wounds Moritella expected next winter because of shielding technology and less treatment. Vaccination against Moritella in process also for a large share of our fish put into sea. A five-year low for lice treatment year to date, second quarter.
If we look at the shielding technology, compare it to the traditional farming, and we look at the fish put into the sea fall 2023 and spring 2024, we have a reduction in lice treatment of 96%, which is really promising. The new shielding technology that we started, we put the first into sea in July last year. This has been a development of four to five years, so it is not a quick fix to start this, but we feel that we are on the right track. Results so far, shielding technology shows exceptional results, rapid learning curve in the organization, low level of lice treatment, improved fish welfare with higher survival rates, and also increased quality. Investment, additional CapEx in 2024 of NOK 350 million to reach target. Current situation, we have 30% of our salmon in numbers shielded as of start of August 2024.
We have a good speed on this development and implement it into our operation at a high speed. Shielding technology on seven sites in Lerøy Midt and five sites in Lerøy Sjøtroll. End of the year, we expect to have 35% of all the salmon in new technology. First harvest of shielded salmon last week, and we will speed up the harvest going forward, and it will be really interesting to see the results that we can achieve from this. As I started with, we are creating the world's most efficient and sustainable value chain for seafood. All what we do to improve is integrated, implemented in a good structure in the whole organization, and all people are involved to take us towards this goal.
Then, of course, it is really exciting to harvest the first fish of the deep sea farming, and we will now step by step see the results. Last week, we made a film from the first harvest of the fish. So, enjoy. To sum up on the farming side, strong biological development in first half 2024. Contract share at 2024 currently around 30%. Expect to see significant improvements from roe and smolt quality, new farming technology, process improvement, and implementing Lerøy Way. For the Wild Catch, challenging quota situation in 2024 and 2025. Quotas for 2024 is down 34% from cod and 43% haddock. Quota advice for 2025 indicates substantially further reduction.
For VAP Sales and Distribution, increased demand for integrated sustainable value chain, improved market share in some key markets, utilizing the potential of our value chain and large variation in profitability in different units, and clear potential for continued growth in profitability in 2024. I will say that the future look bright. Thank you.