Okay. Welcome to the presentation of the Q2 of 2019. And together with me to present already introduced, but Ivan Windijn on my right side. And this one you don't need to read and then we go on into the Q2. It was a very good quarter for us, actually best second quarter ever for the company with an EBIT of EUR 211,000,000 This is mostly backed up by higher volumes, so 26% higher volumes than the corresponding quarter the year before.
But also very good price achievement in the quarter as well as strong demand for the product. And if you take a look into the combination of price achieved and the volume sold, we see that consumers spent 3% more money on salmon in this quarter than the corresponding quarter before. So very good development in the business. Cost has improved from Q2 2018. Also in terms of our business, which is we have a feed division and they set a record in terms of feed sales and production.
We opened a new factory in Scotland in this quarter that has contributed to that result. But I have to say that Norwegian operation in Bjorgen has delivered fantastic in the Q2 and is a really machine for feed production, a really good plant. The board decided to rebuild the smokehouse in Kritsen. That's a smokehouse that burned down in July last year. And we will launch the next movie launch, the brand launch.
We started with Poland in the Q1. And then the next one will come in France. 2nd half, first we go to high end restaurants in France and then we go to retail after introduction into restaurants. Moo!vy has been very well received in the market in Poland. We are in most of the supermarkets down there and also in very high end restaurants, an excellent product.
Then we bought a company called Kostrommen in Bermenge in this quarter. We paid SEK790,000,000 for that company, SEK 150,000,000 per license because there was a lot of fish in the company and equipment as well as 4 really good locations. For us almost the location was the most important part because then we have control in a very important area for moving. And Nulschoyr in terms of fish health and production is key for us. Board has decided on a quarterly dividend of NOK2.6 per share and this is to be paid out for the Lucky shareholders in Q3 2019.
A little bit about financials, even we'll go more thorough through this later on. But important, top line growth in the quarter, 15% compared to the same quarter last year. So now over EUR 1,000,000,000 in sales in Q2, a record for us. Operational EBIT almost or up even more, 21% up, so very strong performance operationally and volume wise 26% up, up to 98,000 tonne. So a quarter where most of the divisions or most of the business units delivered good numbers and I'll get back to that a little bit later.
If you see on the EBIT per kilo here, how much we make per kilo produced in the different production countries, Scotland was the best in the quarter with almost €3, €2.92 per kilo Norway at €2.45 and then you can see the rest of the numbers. Ireland, small operation for us at €266,000,000 only organic almost only organic salmon produced and sold at a very, very good price. This is the spot price development in the quarter. And through the Q2, we saw a falling price in most markets from 10% to 15% in the different markets where we sell. But lately, we have seen increased price, especially in the Canadian price on the West Coast almost $1 a kilo up in price over the last few weeks.
And obviously, on the Norwegian side, it's low prices in August. That's normally it or lower prices in August. And then when you see through that and see into next year and increase in volumes about 4%, I think the fundamentals are very much in place in this business. This is price achievement for the different or the biggest units we have. The Norwegian operation achieved 100% compared to 91% last year.
And you see Scotland 108% compared to 97% and so it goes. Canada is all spot and Chile is also 31% on contracts. So per share is the quality of our fish, 90% in Norway, 96% in Scotland, 92% in Canada, 90% in Chile. And if you say that the spot price is 100%, quality will then drag the price achievement a little bit down and contracts, long term contracts will drag it up. So this is how we account for in a simple way how contracts and how our contracts perform compared to the spot price.
Then to explain the improvement in result from Q2 last year. Q2 last year, euros 175,000,000 Feed improved, not a lot, to €2,200,000 Remember, we are in a construction phase or commissioning phase in the Scottish factory that took the results somewhat down, but still improved from last year. Farming on the back of for the most part volumes up €35,000,000 market 7,600,000 up that's sale of whole fish into markets. Consumer products down 7,100,000 euros on the back of fierce competition, especially in some European markets. And all in all, up to €211,000,000 in the quarter.
Norway, by far our biggest units. Out of the EUR211,000,000 made, EUR126,000,000 was made in Norway. Overall, a good result. Reading South had a huge progress compared to the corresponding quarter the year before. We'll look at that a little bit later on.
But they were harvesting from very good sites. So we harvested in regional south from basically mostly in Agder and Lourgoland where fish farming has good conditions in general. It's typical that obviously when we go back to Hodoland, sorry to say when you are in Hodoland, but then results fall down a little bit more. That has to do with fish health and for the most part the mortality rates on the fish. That can be fixed.
Regional meat impacted by harvesting of smaller fish. We had to take out a few sites because of PD and that's forced harvest in that region. And then you harvest out fish at 1 kilo, 3 kilo, takes your cost up and price down and impact your results negatively. Region North, stable good result and good performance in the quarter. And what we have seen over time now is that Region North performed very well.
A little bit to the biology. Sea life is a little bit increasing in region south and region mid and region north is stable. This is obviously a key for how growth is given out in or not given out, but we have to buy it very costly in Norway. And then in Q3, we see we have 2 ISO sites that we're going to harvest from. So we'll see somewhat lower harvest rates in Q3.
And as I said, higher costs because of that. Unfortunate, but that is biology for you. Norway sales contract portfolio very stable, I would say, around 22,000, 23,000 tonne in Q3. And if you see compare a little bit up from Q3 2018, but not a lot. This is contracts on good prices and to stable customers going forward.
So it kind of sets a good stable floor for our business. Q4 up. Q4 is obviously the season for smoked in Europe and we have normally higher contract share. And you can see compared to Q4 2018, the contract share is slightly up in Q4 'nineteen. Then to the regions, I won't go a lot in details here, but you can see the improvement in the region south.
It's tremendous. It's from €1.1 to €2.57 or €2.6 if you round up. And as I said, this is for most part because we have been harvesting from very good sites in Agder and Ruhveran for the most part in that quarter. Region Mid goes the other way around from 263 down to 188 on the back of what I explained before, harvest from harvest out PD fish and for most of that and some challenge with sea life pressure in the area. So we have to take out smaller fish.
And then region North making 2.97, which is a very good result in this quarter. All in all, 2.56 against 2.45 or 2.45 this year against 2.56. Then on to the other regions. Scotland, actually our best performing region in this quarter, increased volumes from almost 9,000 tonne of fish in the quarter in 2018 to 16, so not quite doubling but close. And that has a profound effect on the result.
At the same time, harvesting from very good sites in areas and good production, good price achievements or slightly down but from quarter before, but offset by higher volumes and much, much better cost. So very good contribution from Scotland in this quarter, €46,500,000 So we're very satisfied with the Scottish operation. Then on to next one, which is Canada. We are both on the East Coast and West Coast of Canada, so out of Campbell River north of Vancouver on the West Coast and Newfoundland and New Brunswick on the East Coast. Here we had better volumes than corresponding quarter driven by that we bought a company on the East Coast in 2018, which harvested some fish at least.
And what we saw in this quarter was a price decline or price achievement wasn't that good in the quarter, in the second quarter. But as I said, this has recovered during Q3. Cost reduced year over year. However, Canada is still at a high level. So we have much more work to do there to get this into the cost level where we are satisfied.
Chile, Chilean operation, another good result, euros 28,200,000 in result compared to €18,000,000 in 2018. Increased volumes as well in Chile from almost NOK 10,000 to NOK 15,000 and around the same contribution per kilo. You see price went down on Chilean fish in the quarter, but cost improved. So all in all, a good quarter. If you look at Chile as we speak, I have to say that there is there has been stocked a lot more fish.
There are some challenges when it comes to resistance towards some medicine against sea lice that needs to be handled and we have a plan in place. But if there's anything that is a concern for the industry in Chile. In the same way almost like the Norwegian industry, I would have to say. Cost expected to increase somewhat in Q3 versus Q2, not a lot, but a little bit on the back of what I said with sea lice and somewhat more SRS. Those diseases and sea lice they go together.
So if you have control on sea lice, then your operation usually goes very well. Then on to our 2 small but nice operations. We have 1 in Ireland and 1 in the Faroe Islands, both over time delivering very good numbers. Island, as I said, organic, especially Irish salmon for special markets achieve a very good price, has the highest cost in our operation, but is branded and sold at very, very good money. So making €2.66 per kilo, up from €2.21 last year.
Faroe Islands down a little bit. We have only 3 sites in the Faroe Islands, so we don't even harvest the whole year, but okay result in this quarter as well. Then on to our biggest division when it comes to number of people working there. There are some people that believe that Norwegian fish farming is kind of founded on we could do all our value added in Norway, bring all the employment back to Norway and this will go just fine. These people that's working in our plants in Europe, in Asia, in the U.
S, they are the one actually laying the foundation for the good results in Norwegian fish farming. If it wasn't for these people developing new products close to market aligned with what the customer want, we wouldn't be able to supply. And people want fresh fish and they want it their way and you get the order in the morning at 7 and you have to deliver the same day And you cannot do it from Norway. A lot of Norwegian politician doesn't seem to get that fully out I think. And it's very important to state this because obviously we in Movy, we are the company actually value adding the most fish in Norway.
We fillet it and then we take the fillets down. But the final value added with the exception of frozen products has to be done close to market. So maybe we are not making a whole lot of money in this division this quarter, but they're really driving the development in the business. We're happy with that. It's a very tough business to be in.
We have smokehouses in Poland, in France, in U. K, in U. S, in as a starter and a lot of small factories that is making sushi and sashimi slices and so on into the markets. They are, as we said, creating demand and we see increased consumption, but the competition here is fierce. And as you can see, we're not making a whole lot of money here, €4,900,000 down from €12,000,000 But we are going at it and we want obviously to improve it and we will.
We have factories that is doing fantastically well. A few mentioned here, Peters is in Belgium, Rosyth in Scotland, STECK in Holland and Miami and Dallas as well, really good improvement. And then we had tough competition in our factories, especially in Poland and France, and especially in the smoked segment. So that is the world we are living in. But at the same time, they're securing a good price for Norwegian salmon.
That's what these guys and the development of a very healthy and good product. It's easy to be taken into this election that's just coming up that everything has to come back to Norway. I just have to warn you against that because it can backfire big time. Fish feed is something we do in the market in the place where we operate. We built a fantastic factory in Bjorg.
I guess windmills is off the chart and everybody doesn't like windmills anymore. But here we are running a factory on windmills and nobody is complaining. It's very clean energy and we combine it. If you see the tanks out there on the side, we combine it with LNG, which is one also fairly clean source of energy. And we have built a factory employing in this division 150 people in Scotland and Norway.
So maybe not a lot, but extremely important for the society in Bjorg and in Kallakan in Sky where the lowest plant is delivered. Delivered a good result or decent result, EUR 3,000,000. We want more. The Norwegian unit was close to 7%, but then we are in commissioning in Scotland. So that was on a negative side in this quarter.
At the same time, we see that when we are getting this plant in Scotland to start up, we see that we can produce even more. So we are we can go the capacity was at 170. I think we can do 240 when we have debottlenecked the whole plant. And this is important for us. The same we did in Norway we build, we are a little bit cautious.
We had the capacity in Brugen at 220,000,000 when we started. And last year we did 350,000,000 ton 350,000 ton. The Bjorgen plant has been operating for 5 years, produced 1,500,000 ton in those 5 years and was paid back in 3 years. So you see that we can really develop industry also in the rural areas. But I wouldn't put my value added sushi factory in that place.
Then on to financials, Ivan, you know much more about this than me and also he will comment on markets volumes going forward.
Thank you, Alfa Jens, and good morning, everyone. As usual, we start with the P and L. As Arfaelge correctly said, our 2nd best quarter ever. Also in terms of turnover, more than SEK1 1,000,000,000 in the second quarter and just exactly SEK2 1,000,000,000 in the first half. So yes, a good first half year for us and particularly a good second quarter.
Operational EBIT, €211,000,000 If we go further down in the P and L, no biomass adjustment this time around. Restructuring costs of €90,000,000 that is related to the Kritsen fire and the restructuring of that factory. As some of you are aware of, the board decided to rebid the factory announced in our stock release in the quarter. The €90,000,000 amount is fully aligned with the message we gave back then. Income from associated companies, that is 1st and foremost NovaSe, a very good farmer in Newland, where we own 48%.
They had EBIT per kilo of as much as 3.15% this time around. It's really, really good. I haven't seen anyone manage to compete with that so far. So we are very happy our ownership in our sea in general, but particularly this quarter, obviously. For net financial items, quite stable or normal this time, EUR 12,000,000 negative.
And underlying earnings per share, EUR 0.29 volumes, 98,000 tons, up as much as 26% year over year. Of course, the big driver of the results we achieved in the quarter. Return on capital employed or return on invested capital annualized close to 22%. Then over to the balance sheet or what we call the financial position these days. The total balance sheet now amounts to €5,600,000,000 So we are growing.
You can see up €1,000,000,000 year over year, driven by both acquisitively and, I would say, 1st of most, organic growth. We have close to 27,000 tons more biomass in sea year over year. We have bought in last year auction. We also have invested heavily several in various greenfield projects. We acquired Norman Harvest last year And recently, we have acquired Costa Ammann, but Costa Ammann doesn't impact these numbers.
So you have a growth strategy and I think the numbers, they are quite evidently here. Net interest bearing debt, €1,100,000,000 so somewhat below our long term targets, but in line with at least our internal forecast for this quarter. Equity ratio of solid 53%. Turning over to the cash flow. We started the quarter with a net interest bearing debt of €1,000,000,000 Then we made €248,000,000 in operational EBITDA.
We tried up some working capital, a rough increase in biomass. We paid taxes of as much as €82,000,000 So the lion's share of the taxes this year is now paid. Net CapEx in line with our budget and forecast to the market, €69,000,000 of the investments and dividends received, euros 70,000,000 is related to a dividend from the associated company NovaSeq, which we have just talked about. Net interest expenses paid in the quarter around €15,000,000 so quite normal dividend is the dividend the Board decided to distribute after the Q1. All in all, net interest bearing debt at the end of the quarter of €1,100,000,000 And as you can see from more or less the footnote, this is euro.
So we are a euro company and 50% of the salmon is sold in euro. Cash flow guidance, no changes since the Q1 apart from taxes paid. It's now €160,000,000 for the year, up from €140,000,000 due to higher earnings. So you could argue for the right purposes. Then a quick overview of our financing.
We are very, very proud of this financing, particularly me and my team. So we have a bank facility with the best banks out there according to us and I guess also according to them, TMB, Nordea, ABN, Rabo. The two last ones, they are Dutch, Donske Bank and SEB. We also have a senior unsecured bond of €200,000,000 5 years tenure and a Urebor of 2.15%. This is unsecured money and Urebor, as you are aware of, is negative, so very attractive terms.
And our senior unsecured Schuldscheid loan, I guess not many of you are aware of this. This is a loan in the German private market. It's first and foremost banks and insurance companies investing in this. 7 years tenure and Urebor of as low as 1.70%. This is also unsecured money.
So really, really cheap financing and extremely important to us. That's why we always take every opportunity to bother the audience through it. Long term debt targets, EUR 1,400,000,000
unchanged.
So much about the financials, then over to the fundamentals. 1st, supply development in the quarter. In the upper bound of our forecast, 8% year over year, our forecast or expectation was in the range of 3% to 7%. We have had more growth in Norway than expected, but also the Algeblum drove the volumes in Norway in the quarter. This was in the northern part of Norway as I guess most of you are aware of and it resulted in advanced harvesting.
Chile in line. Prices, a lot of negative figures this time. We are not used to that. Remember that last year, we were at a record high level. So we are down 10% from a very high level in Europe and 30%, 40% in Americas from also a very high level.
If you blend this with the contracts, according to our calculator, the value of the market has still increased by approximately 3 percent year over year. So the underlying demand, the way we see it, is still very healthy. Then over to the demand or the consumption of the fish produced. As you can see from the first line here, EU increased by as much as 8%. So this is the main market for the salmon, accounts for almost half of the market, so very important to the European farmers, but also to all global farmers in general.
So a very good development in Europe and all countries are increasing. So we're very happy with the, again, the development in Europe. Russia is challenging, has been challenging for a long time due to political issues. This has turned from a fresh market to a frozen market, and we think that will be the case as long as the situation is in Europe. So down 11% this quarter because of the Chilean fish was redistributed to the fresh market in Brazil.
Selling fish fresh is always more profitable. And as you know, it's much shorter to ship or truck the fish to Brazil than to ship it to Russia as frozen. Very good development in Americas in general, 6.5% increase. Brazil stands out, as just mentioned. U.
S. A. This time, 3%. U. S.
A. Is the biggest single market for the summer, close to 500,000 tons and almost now half of the European market. So the U. S. Is extremely important to us.
So the footprint we have on the farming side, both in Canada, but I would also argue in Chile is very, very important to us in order to have the right raw material to continue to develop this market. I would also like to add that our growth in the quarter was higher than this 3%. China, Hong Kong, 0% this quarter, I guess, a little bit disappointing. China is actually up by 5%, but Hong Kong is down. We can see on the telly that there are things going on there that also impact our business.
So in general, issues, political or others, are never good for trade and salmon is a very global market and product. So, yes, each time such things happen, it's in general not good for us. Japan is a mature market, hasn't grown for years. And so 1.7% EBITDA is just as expected. South Korea, Taiwan, 6% plus, okay.
5% in Asia in general, also okay. So the demand, as we see it is still very, very good. Then over to the supply outlook, fundamentals going forward. I guess as an investor, this is what really matters, maybe not this year, but next year and the years to come. For the remainder of the year, we expect a growth of 3% to 7%.
For the year as a whole, 4% to 7%. I think the consensus is 6%. If you look into next year, which is closing in, Contale expects 4% and our internal take is so far also the same. So the fundamentals for next year look good for the market balance. So you are aware of that.
There is some seasonality at the moment. But again, looking into the fundamentals for next year and also the years to come, we still have good belief in this. Then over to our own volumes, no changes this time. So it's not much to say really. We are still comfortable with achieving 430,000 tonnes in total, a big increase of growth compared to last year from 375,000,000.
But that being said, bear in mind that we have been at these levels before. So I would still like to use the word recovery. And again, we are comfortable with the numbers. Then I would like to say thank you and leave the word to Adolf Helge, and he can wrap this up with working us through the outlook. Thank you.
I guess you can just stay, Johan. Okay, we'll shortly open up for questions. But just to sum up, Johan just said it, the fundamentals look strong. There will we don't see any oversupply in salmon going forward. Controller estimates 4% next year and that's not more than the market needs.
At the same time, fish pool prices, forward prices at €5.9 very decent price level. For us, organic growth throughout our value chain, the feed plant in Scotland, we continue to fine tune. Farm east side, we have ample opportunities to grow in Newfoundland. We are in we have opportunity to grow in Chile, in Norway and Scotland as well, slightly worse in the Faroe Islands and Ireland, but they are small. In terms of downstream on the market side, our branding effort continues with full speed going ahead.
So to grow this company going forward fantastic opportunity. I think we are one of the bigger companies in Norway today and we should stay that way. In terms of the acquisition, Corstramen, we expect to finalize this in Q3 2019, just in a few days actually. And that will bring us stability in Norshoore where we have many of a big part of our operations. Fee plant already said, but we see we can increase the capacity from 170 to 240.
That's always a good sign. And we need the FEED for the future. And then as already stated, quarterly dividend, NOK NOK 2.60 per share paid out as ordinary dividend in the 3rd quarter. And with that, we open up for questions. So both Ivan and myself are able to answer at least some of them we hope.
So Kim, I don't know how you do it with the microphones and stuff or if you have anything coming in on your computer.
One question regarding the feed plant. When do you expect it to be up and running at least close to full capacity? And what do you expect to do with the additional volumes that you are able to produce at least your own operation in UK, I guess, doesn't support such high volumes?
No. The plant for this plant is we do freshwater feed for whole of Europe, so small feed. We also do specialized feed, organic feed for Ireland and any kind of specialized feed for Europe. We will do brass feed as well for our lumpsockers and our Ballon Brass. And then obviously, we are if we have excess feed, we have a fantastic feed.
So we are obviously we can sell into the market going forward.
And you expect it to be running like maybe not full capacity but at least at high capacity in Akcea?
Sorry, I'm not answering your question fully. We second half, we will we are already tuning in on good speed. That's why we are saying stating numbers we are. But second half, we will be close to peak capacity. And next year, we should close in on our 240.
And one question regarding organic growth in Norway. You have several of these development licenses approved. None of them, to my understanding, have been built yet or started to being built. What's your thought around these new technologies? And how do you approach that?
Yes. We have one, the doughnut, which is on we're just waiting for a license or a location in the northern part of Norway. So that is closing in. Then we were rejected on the ag. We got only 6 licenses.
We applied for 14. This was a big project. The government unfortunately scaled it down. We applied to billet steel, because steel is stronger. It's easier to decommission.
And there is a secondhand market if we break it down. So but they said, no, it was too cheap to build it in steel. It's strange because Norway is very dependent upon reducing farming costs, not increasing it. So it should be smart to build cheap, but that was not the case. So that project we are evaluating will come with a conclusion during the Q3.
And then we have a few projects where we have not succeeded. Storm Habruk was rejected. That was offshore project where we were planning to produce underwater outside of the coastline, a really offshore project? They said no. So maybe we haven't succeeded fully on that.
But some are in process and some are coming and some are gone. Thank you. Okay. We have one question from the web. It's from Kristian Obi at Kepler.
He's asking, region south in Norway has strong development due to Ogedar and Rogaland. Should we expect EBIT per kilo to drop into the next quarter as we start to harvest in Hougalland? I guess we guided on that. And I think it's fair to say that that is the case based on what we now see.
Alexander Reikmanen, DNB.
Could you
shed some more light on the CLI situation in Chile? You mentioned you have a plan. What is that plan? And secondly, your consumer products, you have a fairly low margin at the moment. It's a bit surprising to see Lera Seafood report 2.5% operating margin in what I believe to be the same market.
Is it just the market or is there cost issues as well?
First question, first it was remind me again the first one was?
The plan in Chile.
Yes, the plan in Chile. Yes, in Colorgus in Chile is a sea lice that is smaller than the one we have in Norway. It has the Norwegian sea lice has about 800 larvae going into the ocean. The Chilean has 200. What we see is resistance towards medication.
That is to be expected over time. The plan is the best solution as we see it now is freshwater. And then there is demand for more well boats, but we are getting there. We can also treat in different ways. So use fresh water against the issue.
The second one was you referred to one of our competitors. And obviously, we have to look at the total number when you compare. But there is competition in the marketplace. We do very well and have good margins in some markets, but especially in some of the bigger markets like smoked in France, the margin is low to a certain extent smoked in Germany as well. So cost level is actually down in our production.
So we because of higher volume, cost is going and the production efficiency is really good, but the price is not good enough. Big room, so now it's time. Okay. If not, you have more questions on your computer, Kim? No.
Then I would just like to say thank you. It's very close to time as well. So thank you for listening in and have a great day. Thanks.