Together with me to present the results today, I have Ivan Vindheim, our CFO. With that, I think we'll just go straight into the details. First of all, this quarter all in all was a satisfactory quarter for Marine Harvest. We managed to earn 932 million NOK in operational EBIT margin. First of all, the result is impacted by strong contribution from Norway. More than 830 million NOK here comes from the Norwegian operations alone. That is on the back of a drop in spot prices of NOK 6.5. All in all, we think the Norwegian operations are doing good. Another important area to note in this quarter is the market conditions in the American market.
This has to do with different issues, actually, both the supply increase from Canada at 29%, also a lot to do with currency weakening of the Brazilian real and also weakening of the NOK against the USD. I will come more back to the details around the development in the American market later on. We successfully converted EUR 348 out of EUR 350 million convertible to share capital in this quarter, the board has decided to pay out NOK 1.3 per share in dividend. On to the financial highlights. The operational revenue grew with approximately 300 million NOK this quarter. Operational EBIT, as mentioned before, NOK 932 million against NOK 970 million in the same quarter in 2014. Remember here, in this presentation, the numbers are compared without Chile. Because of accounting rules, we have to look at Chile as discontinued operation until the merger is finalized.
The net interest-bearing debt ended at 7.5 billion NOK, compared to 9.2 billion NOK at the end of 2014. The majority of the difference here is obviously caused by the converting of the convertible into share capital. Some will say it's a little bit high on the working capital side in this quarter, which is correct. Then you have to remember that Easter was in March this year, all the fish sold into Easter is paid in April. 83,000 ton compared to 74,000 ton Q1 2014. 10,000 ton increase here comes from the Norwegian operations. All in all, NOK 11.1 in operational EBIT against NOK 13 in operational EBIT in Q1 2014. Big variation between the different operating units I will come back to why. Into the market situation in this quarter. In Europe, the supply grew with approximately 17% that has caused weaker prices.
Looking at Russia being down more than 50% in this quarter, or close to 50% in this quarter compared to the quarter of 2014, Europe is still doing good. I think we can speak about good demand for salmon in Europe on the back of huge volume increases. Contradictory you see in the Americas, high supply growth, 29% from Canada into the North American market and weak prices overall. We have huge opportunities in the American market now. The American market is the least developed marketplace to work now with more value-added products and more convenient products for the consumers there bodes good for the future. This is also an opportunity in this marketplace. To the currency fluctuations that has impacted the market.
Norwegian salmon, all in all, has become more competitive both in U.K., also in the U.S., and that has obviously had an impact on salmon from other origins. The real in Brazil has weakened, causing the Brazilian market especially in March, to drop somewhat, and that has an effect especially on the Chilean side of the production side. Ivan here will come back to more in detail on the currency fluctuations but bear in mind that has impact in this quarter. A little bit about the price achievement by origin. If you here we compare to Q1 of 2014, we see that the Norwegian price achievement is better, up to 100%, with the 92% superior share in the quarter. We had 33% contracts in this quarter, the contracts are pulling us the right way compared to the first quarter of 2014.
In Scotland, good price achievement also due to contracts. The Canadian price achievement in this quarter was at 98%, same as for last year. Here we compare to Urner Barry in Seattle for the Canadian operations. We compare to the Norwegian NASDAQ, in Scotland, NASDAQ plus 1.74 NOK per kilo. That is the reference price. To explain the development in operational EBIT going from Q1 in 2014, our feed operations improved with 35 million NOK. Our farming operation worsened the result with 231 million NOK. That is explained by Scotland dragging it down more than 100 million NOK. It's explained by the result in Canada, down more than 50 million NOK. It's also explained by the Faroe Islands result, Norway pulling the other way. For farming isolated, the result is down NOK 231 million. On the market side, we improved the result with NOK 41 million.
Consumer products improved the result with NOK 61 million. All in all, we ended at NOK 932 million for the quarter. A little bit about the Norwegian operation. I would say a strong result for Marine Harvest in the first quarter. The cost side here was in line with the cost of 2014, the operational EBIT was better than 2014. That on the back, as I mentioned before, that the spot price is down 6.5 NOK, i.e., our contracts has pulled the price up compared to the price achievement we had in Q1 2014. If you look at the cost side, you will see that the volume has an effect on cost. The feed cost is slightly up, not a lot, offset by non-seawater cost in this quarter. The volume effect has worked cost-wise, we are stable compared to the first quarter 2014.
In terms of increased treatment costs, that continues. That is a challenge for the organization. This quarter, the sea lice mitigation cost was at 1.65 NOK per kilo. That is high, that is on the back of high seawater temperatures in the quarter. Vary a little bit along the Norwegian coast, on average, close to one and a half degree up compared to normal temperature. This obviously is not good for the biological situation in Norway. If we then look at sales contracts in the quarter, 33% coverage around or a little bit north of 20,000 ton. We have around the same volume, 20,000 ton also for the second quarter contracted at good prices. In Q3, it's lower. Contracting is a continuous business, it's natural that it's lower in Q3 than in Q2.
We look at the Norwegian operation and breaks it down into the different regions, we see a fairly even result in the different regions, and I think good operational EBIT margins in most regions. In Region South, we harvest in this quarter from Agder and part of Rogaland for the most part. We have an operational margin at NOK 12.11 per kilo. Some issues here in terms of CMS, all in all, a satisfactory result in Region South. Region West, the record region also in this quarter, they were the best region also in first quarter of 2014, NOK 14.95 per kilo. Good result, a more challenging situation in this region in terms of sea lice going forward. Region Mid are improving the results compared to the result in 2014. Doing better, still have room to further improvement before we are satisfied.
Region North, on the other hand, is coming back gradually improving, I think we will see this region improving also in the next quarters to come. All in all, a good result for all regions, taking into account the spot price in this quarter compared to the quarter of 2014. To Scotland. We knew that Scotland was seriously hit by biological issues already in Q4, we announced that this would be a weak quarter as well. We are bouncing back in Scotland. The result is improving as we speak. When we now go into a new generation, I think we will see a quite different number from our Scottish operation. Gradually better also in Q2, from there on, I think we will be back on track in our Scottish operation. Low volumes in this quarter, also low harvesting weights.
We've taken out fish that has been damaged because of both jellyfish, AGD, some sea lice issues here. This has also impacted when we took out a lot of fish, both in Q4 at small sizes to a certain extent in Q1. This has impacted the average weight of the operation because you're pulling fish towards you. It's not ideal development. On the other hand, we see the local market here will be negatively impacted by strengthening of the pound. Scottish salmon will be even in more competition with the Norwegian salmon going forward. As I already said, cost improvements will come in the quarters to come. Over to our Canadian operation. As you can see from the waterfall here, hit heavily by a drop in prices.
In fact, our Canadian operation are reducing cost, not in line with the reduction in prices. We are fairly satisfied with the biological performance there. Sites are doing better and better also resulting in a lower cost. Overall, we're happy with the production performance. Obviously, the market situation is challenging. Which it is. They obviously selling mostly into the U.S. market the Canadian market. Here we have experienced a supply growth from the North American market of 29%, also more competition from Norwegian salmon in the U.S. market. Ireland, Faroe Islands. No fish in Faroe Islands this quarter, just a little bit in Ireland a break-even result. I don't want to comment use more time on that, because we didn't harvest fish, which was expected. Over to consumer product.
Consumer product consists of Mowi VAP and former VAP operations. We have improved the results with slightly north of NOK 60 million compared to the last quarter of 2014. Improvement in efficiency as we expected, and improvement in productivity. On the other hand, we're not satisfied with the result still. Our target is north of 5% EBIT margin for this operation. Especially here, our loss-making in the French smoke operation. Improving, but still challenging. We are starting up in U.K., a huge facility in Rosyth in Scotland, which obviously has start-up cost before we have fill it with products. All in all, improvements, but not to the extent that we are satisfied at this moment. Over to our feed operations. We produced approximately 38,000 tons.
36,000 tons of feed in this quarter. Very low volume for this operation, but we are heavily contracted in the feed business at the moment. The contracts are running out and will be replaced and gradually diminish during 2015. The first quarter, we couldn't produce nearly at capacity. Saying that, a result of 4.8% EBIT margin for a feed operation running at less than half of capacity is not bad. We're satisfied with the operations. We obviously would have liked to produce more feed, which will happen going forward. As you know, I already stated in the fourth quarter, we expect this facility to produce approximately 80% of the need this year, which will again, increase profitability in this part of the business. Over to Chile and the Chilean operation.
We've used the same set of presentation as we always use on our Chilean operation, it is discontinued into the numbers because of the merger we are doing. Also affected by weak prices in the Americas and also especially the currency movements there. Both the real and the USD here is unfavorable for our Chilean operations. For Marine Harvest, we had a tough quarter. We took out one site in Region 11 because it was a bad site, and we saw the cost being lower to take out the site now than to continue to produce and lose gradually more money as we go. The decision cost us NOK 51 million, the decision was correct. To wait, we would have lost more. That explains part of the loss in Chile.
The other part is heavily explained by low prices, also higher cost on the biology side. It is a challenging situation, and especially due to SRS. In terms of the volcano that you have read about in the media, we had two sites impacted, no people hurt. We lost 2.4 million eyed eggs in Rio Blanco. It's a hatchery, basically a hatchery fry production unit. 6.8 million fry. To replace eyed eggs is easy and also with the setup we have now in Region 11 with the huge hatchery that we got from Acuinova to replace small fry is also pretty simple. All in all, this will not have an effect on Marine Harvest stocking plan, or harvest plan as for now. Everything has been replaced, and that's fortunate for us because it was not smolt that was killed.
All in all, it certainly has had an impact on the Chilean industry. Ivan, more on financials and harvest volumes and markets, the floor is yours.
Thank you, Alf-Helge, and good morning, everybody. As usual, we start with P&L. The first quarter of 2015 saw us make a turnover of approximately NOK 5.7 billion. This is up approximately 8% compared to the turnover in the first quarter last year. Bear in mind that all the first quarter 2014 figures and 2014 figures are adjusted for our Chilean operations, which is now recognized as discontinued operations. The numbers are 100% comparable. Profit-wise, operation EBIT in the first quarter this year, NOK 932 million, somewhat below the first quarter last year, NOK 917 million. If you go further down in the P&L and visit the major items first, the biomass adjustments, negative NOK 589 million due to a lower spot price at the end of this quarter compared to the spot price at the end of the fourth quarter.
The biomass is also down compared to year-end figures. Our associated company, Nova Sea, is recognized under income from associated companies, NOK 12 million. This is bottom line, including IFRS adjustment. The underlying profit for Nova Sea in the first quarter was NOK 14.8 in EBIT per kilo on approximately 6.9 thousand tons. You find all the details in the appendix. Earnings per share here is 0.94. This is the IFRS earning per share, which we do not focus on. The underlying earning per share of the first quarter was NOK 1.33. That number includes our discontinued operations in Chile. Harvest volumes in the first quarter, 83.4 thousand tons, which is up approximately 12% compared to the first quarter last year. Operation EBIT all inclusive, first quarter, NOK 11.17 per kilo. Return on capital employed, 17.6%. So much about the P&L. Over to the balance sheet.
Total balance sheet amounted to approximately NOK 36 billion at the end of the first quarter. This is somewhat down compared to year-end figures and somewhat up compared to the same quarter last year. The increase, compared to the first quarter 2014, is due to organic growth, but also the Acuinova Chile acquisition we did back in December. Net interest-bearing debt at the end of the quarter, NOK 7.5 billion and a very solid equity ratio of 51%. Over to the cash flow statement. As Alf-Helge said initially here, we tied up a substantial amount in working capital in the first quarter due to Easter. From an EBITDA of approximately NOK 1.2 billion, we had NOK 669 million in cash inflow from operations. We have an extensive CapEx program. In the first quarter, we spent NOK 426 million. This is ex Chile.
If we include Chile, the number is approximately 500 NOK million. We also flushed our convertible bond of EUR 350 million, which had effect on the net interest-bearing debt. Those numbers you find in the items below cash flow from investments. We also distributed the dividend. I should also mention that Chile, all in all, had a negative cash flow of 245 NOK million. You find the reconciliation of the Chile figures back in the note. There you also find the reconciliation of the cash. A quite big amount is related actually to internal finance costs there. From an external point of view, the negative cash flow was not as high as 245 NOK million, which it looks like from this cash flow statement. All in all, net interest-bearing debt at the end of the quarter of 7.5 NOK billion. Over to the cash flow guidance.
The guidance on working capital for 2015 is unchanged, still 900 NOK million plus. This is tied up in inventory and other working capital items to support further organic growth. The CapEx forecast for 2015 is increased somewhat from 1.7 NOK billion to 1.9 NOK billion, mainly due to FX. As you know, we are reporting in Norwegian kroner and we have extensive operations in other currencies. When we set the CapEx plan, this is sometimes subjected to FX movements, and that's what we have seen in this quarter. Interest expenses down from 300 NOK million to 270 NOK million due to the flush of the convertible bond. Tax payables still at NOK 650 million. Dividend to be distributed, as you can see from the stock notice just released in the beginning of June, 1.30 NOK per share.
Dividend policy, no changes here, we have changed the debt targets due to the flush of the convertible bond. We are still chasing the long-term target of NOK 15 in net interest-bearing debt per kilogram. That gives a new debt target of EUR 950 million. Overview of financing. Apart from the flush, no changes, I will not spend much time on the details there. If there are any questions to the flush, we can take that afterwards. I'm not sure that all the details are of interest for the entire audience. Much about the financial figures. Over to supply development. Supply growth in the first quarter ended in the upper range of our previous guidance, mostly driven by higher than normal seawater temperatures in Norway on the back of a temporary increase in the MAB. We also saw, as expected, substantial supply growth in North America.
I think ourselves, Marine Harvest Canada, was the main provider. Supply from Chile is stable if you take into account release of frozen inventory. In terms of the supply in the first quarter, no big surprises apart from the very good growth conditions in Norway. The reference prices. The NOS in the first quarter was 40.72 NOK per kilo, which is, according to us, a good price taking into account the supply inflow of salmon in the EU of 17% in the first quarter. A good price in absolute terms. We see that the price in EUR is down, I guess we could say that we also got some help from a very strong EUR versus the NOK. In Americas, we are concerned.
If you look at the price for the Chilean salmon here, converted to head-on gutted, it was approximately $4.3, $4.4 if you include sales margin, and that's below break-even price in Chile. We saw that the price increased somewhat from a low level towards Lent, but after Lent it has decreased. We are still under break-even in Chile on price. The price for our Chile operation remains a concern. We also saw a drop in the price of our Canadian salmon. If you convert this reference price to head-on gutted to farmer, you are somewhat below NOK 40. That, we think, is mostly driven by the supply growth in North America, plus a strong U.S. dollar, which makes the European salmon more competitive towards the Canadian salmon in the American market. That being said, it doesn't help for our Chilean salmon either.
Over to demand. Markets are fantastic demand in Europe in the first quarter. They absorbed as much as 17% of the volume, at least if you compare to last year figures. In absolute terms, at a very attractive price level. EU is developing very satisfactory. As expected, Russia and Ukraine is significantly down due to the trade sanctions we all know about and the negative effect. You cannot read it from these numbers, but Brazil was substantially down in March due to FX. The strengthening of the U.S. dollar has reduced the purchasing power for our Brazilian clients. This development has continued into April. We are monitoring the development in the Brazilian market closely. We saw a 7% growth in the U.S. Other markets are developing very well.
Once again, in Europe, a fantastic demand and at very attractive prices, taking the inflow of salmon into account. Then over to the supply outlook. We are more or less at the same level on total numbers for 2015, a growth of approximately 2%-5%. I think that's more or less in line with the consensus. We are not presenting the 2016 figures here, but we also believe in a modest growth for 2016. From an overall basis, we think things still look very favorable from a supply point of view. There are, of course, some variations between the regions, but at the end of the day, we think, at least in the long term, salmon is a global product. In terms of the second quarter, we think the supply growth will be somewhat lower year-on-year compared to the first quarter figures.
We normally see higher volumes compared to the first quarter due to seasonality. We also think that will happen this year. Once again, from an overall basis, the supply outlook looks still very favorable. Although we are struggling somewhat in some markets due to various reasons. Then over to our own figures. We are still, if we include our Chilean operations, at 440,000 tons full year. Some minor adjustments between the regions, not any substantial ones. I think that's all on that item. I would like to give the word to Alf-Helge again. Thank you.
Thanks. Yes. If you look a little bit into the future here and lift your eyes a little bit, the outlook in Europe is, I would say, fantastic. If you see the growth of 17% in Europe, and if you saw the previous slides there, this market growing with 100,000 ton over the last 24 months at very good prices, demand for salmon, it's hard to question that. In terms of the American market, we monitor this closely. We also put a lot of effort into producing new products, introducing new products into actually new business areas for salmon in the U.S. market. It's timely and it's highly needed, and it's the most immature salmon market in the world in terms of product development. It's still only 380,000 ton consumed in the U.S., and we think the opportunity there is really good, to put it bluntly.
On the back of low prices, it's not maybe the smartest way to market salmon, but it works, as they say. In terms of the Norwegian government and the white paper, this has been in question for a long time. That came in this quarter. I think it is a responsible approach by the Norwegian government. Overall, this is bringing the industry in the right direction. There are obviously some issues that needs to debated and clarified, but all in all, good for the industry. I think improved biological control here, if we want to develop this business for the future, if we want to grow this business into 2050, and it's going to be a leading business in Norway, there's no other way. You cannot continue like we are doing today. Kudos to the Norwegian government for this. AquaChile, this merger process continues.
As we said in the last quarter, we expect to finalize it in Q3, and then a quarterly dividend of NOK 1.30 per share will be distributed shortly. With that, I will open up for questions, and please state your name and employer, and we will try our best to answer.
Thanks.
Yeah. Thomas Daur with Arctic Securities. In light of this reporting, when you have Chile as discontinued operations, can you say something about the net debt target if you were to exclude Chile? I guess Chile is included in that guiding. Can you also maybe say something about what you hear from the industry in general in Chile in terms of how many smolts that may have been adversely impacted by the volcano? Thanks.
You can take the first.
I can start with the net interest-bearing target. You're right, Thomas. This is including our Chilean operations. We haven't merged yet, so we will revert to a new debt target when we merge. In Marine Harvest, apart from our reporting, it's business as usual. We do not adapt to a new regime before it's final. From an operational and financial point of view, it's business as usual. We deal with this as Marine Harvest does this.
The next question was more in the line of speculation on how many smolt that has been lost in Chile. We have numbers on our own operation. We lost 2.4 million eggs, we lost 6.8 million fry. That will not have a major impact. We know that. The best advice I can give you is maybe to look at the SalmonChile numbers, but we don't have specific information outside on our own operations. More questions? There's one in front here.
Georg Liasjø, ABG Sundal Collier. A follow-up on Thomas' question. If you were to have the balance sheet now on, say, on a pro forma basis, what would be the impact on the current net interest-bearing debt from excluding the Chilean operations? Also, how much of the CapEx is related to the Chilean business?
We-
The working capital finance.
Yeah. That was not little. If we start with net interest-bearing debt, we are to merge Marine Harvest Chile on a net interest-bearing debt-free level. Consequently, this will not affect our net interest-bearing debt. In our agreement, they will pay us for 50% of the Acuinova acquisition. Consequently, we will be refunded approximately half of the amount related to that acquisition. If you, at least from a reporting point of view, compare our net interest-bearing debt today to what it will be, all else being equal, it will actually be a little bit better. By the amount, half of the amount related to the Acuinova acquisition. Then you asked about our CapEx for Chile. We do not report our CapEx per region. We prefer to have some flexibility when we are allocating the CapEx as we go along.
The day we start to report the CapEx per region, then we have given away that flexibility. We would like to keep that as a business secret. In the long run, if you disregard one year, in the long run, you can use the volumes for the CapEx need. Then you, of course, have to adjust for any structural investments. Consequently, if you look at our CapEx in the first quarter in Chile, you will see that the CapEx there is above the depreciation level because we have just made an acquisition of Acuinova and we, yeah. We are also ramping up from a historically very low volume level if you go back to 2010. The CapEx level in Chile for some years now have been higher than the depreciation.
That doesn't mean that will continue because the day we start to maintain our volumes, then we can start to talk about maintenance CapEx, and that's something else. We like to keep the flexibility internally on where we spend our CapEx amounts. Sometimes we actually change plans during the year if we see any incidents. For instance, what we have seen now related to the volcano. It didn't affect us because we are contracted this externally. It could, and then we had to do some adjustments, but we don't. I don't know if that was a good question. At least it was very long.
The same applies to the working capital with respect to not disclosing the splits?
Yeah. That's right. I'm sorry. You have to bear with us and accept the total amount.
Thank you.
Marius Skaar, Carnegie. You said that the contracts had pulled up the results for the first quarter. We have seen that if you look at Fish Pool forward prices, for instance, there's been a pretty big drop in the forward prices for 2015. Can you say something about how your own contract prices have developed so far in 2015?
Yes. I think, as you correctly stated, compared to the first quarter, the contract prices are at a good level compared to the first quarter of 2014. I would say also forward-going contracts are at very favorable prices.
Kolbjørn Giskeødegård, Nordea Markets. One specific question on sea lice. You say that you have severe sea lice challenges in the U.K. in the recent months. You are being accused of having one standard in Norway and another one outside of Norway. Comment on that. The second one is more a general question on the cost development, both biological cost and feed cost in the quarters to come. What's your expectations on the level there?
First on the question on Scotland. Not as of now. This was last fall, we had the issues in Scotland, and I'm the first to admit mistakes. We had algae blooms and jellyfish in the Hebrides, and including even AGD, and we could not treat at that moment because of the situation of the fish. We should have taken the fish out earlier. I'm the first to admit that. That was a mistake. When it comes to standards for sea lice, we do the same in all countries. We fight for as low number of gravid females as possible because we think that if you reduce the reproductive phase of the lice, we are better off as an industry. Our strategy, exactly the same all over the place. A mistake in Scotland last year, that I'm the first to admit.
There's a reason also why I have been speaking about this being a big problem. If you look at the sea lice cost in Norway increasing this quarter is NOK 1.65. If it was not a problem, I would probably not have spoken about it either. I see what they write in the papers, but my conscience is pretty clear. In terms of cost development. Well, on the biological side, we've not seen the top yet. I think we will see slightly increased cost in different regions. In Scotland, cost will come down, but from a high level. In Canada, I think we'll stay at a good level. In Norway, it's a little different in different regions. In some areas, we're more hampered by the sea lice than in others.
All in all, maybe a slight increase, but offset now with good fisheries in Peru, on the fish meal, fish oil side, and also other raw materials on feed, and developing in a favorable way. I think over time, we will see the cost again dropping in Norway, at least if this continues. As you all know, feed costs, you put feed into the fish, and then you release the fish. I expect slightly cost increase both because of feed and because of sea lice in the nearest quarter to come, and then a drop. That's what I see in the Norwegian operation. In Chile, well, we have to come down. Certainly because of this quarter being an incident where we took out one site. We will see lower cost in Chile going forward, but from a very high level.
Yeah, just a follow-up question again, Thomas Daur at Arctic. You have tended to indicate a break-even level for your Mowi pool operations, and since you have merged these entities, can you say something about your ability to be profitable going forward at various break-even levels?
Like the salmon price?
Yeah, you tended to indicate like a NOK 41 break-even level for Mowi pools operations.
Yeah, when you start to negotiate with the customers, it's never a good start to give those numbers in advance. That's why we have stopped doing that. We have learned. Sorry again.