Good day, and welcome to the MHG quarterly report, Q3 2018 international conference call. Today's conference is being recorded. At this time, I would like to turn the call over to Mr. Alf-Helge Aarskog. Please go ahead, sir.
Thank you, welcome to the third quarter presentation for Marine Harvest. I will quickly go through the presentation and try to remember to tell you what page I'm on as I go ahead here. The third quarter for Marine Harvest was so far the best third quarter in the history of the company. The third quarter is often a challenging quarter market-wise. This quarter, we achieved good prices, and we had at least decent cost on our production. All in all, that resulted in an EBIT of EUR 207 million in the quarter. What we saw compared to seasonality of the third quarter was, in reality, high prices in all markets, driven by strong demand for salmon. Harvest volumes for us this quarter were high and actually the highest in the history of the company in terms of this season.
We added on Northern Harvest into our reporting as of this quarter. This is the first quarter that Northern Harvest number is into the Canada numbers, because the acquisition of Northern Harvest was completed in the beginning of this quarter. What we see is strong earnings in consumer products, and we get back to that when we get into that slide. The Board has decided that the quarterly dividend of NOK 2.60 per share will be paid out in Q4 of 2018. We go on to slide four, just sum up the highlights there. Operational revenue grew by 14% this quarter compared to the same quarter in 2017. Operational EBIT was up 7% this quarter compared to the same quarter last year. Harvest volume grew by 15% in this quarter, from 95,000 ton to close to 110,000 ton.
All in all, basically fairly stable prices, fairly stable cost, volume growth grew and increased profits. If you look at slide five in the presentation, basically describes the prices. I will get more back to the details on that, but all in all, I think the conclusion has to be that there were good prices in all markets, taking the season into account. If you go over to slide six, which describes the contract portfolio, price achievement, and the quality of the fish. Price achievement really is the sum of contract sale, spot sales, and superior share or quality. We see that Norway achieved a price slightly above the spot price at 102%. The Scottish salmon was at 114% in this quarter, compared to 113% last quarter. Good contracts and very good quality of the fish in Scotland.
Canada is basically a spot price market, and we achieved price in line with the spot market. On the Chilean side, we achieved 100%, so here, the price here was slightly lower. All in all, good price achievement in all markets. Slide seven bridges the operational EBIT from Q3 2017- Q3 2018. What you see there is basically a confirmation of what I said earlier. Not a lot of difference, but volume-wise, farming makes a little bit more money. The other are fairly stable. If you go on to slide eight and the Norwegian operation. Very good result for Norway this quarter, EUR 160 million against EUR 124 million. Good spot prices, fairly low contract share, high harvest volume.
We see improved biology in Region North, and then Region Mid and Region South, we have had challenges with sea lice and diseases following sea lice, really, which is PD and CMS. If you look at the waterfall on this slide, you will see that the cost is reduced, partly volume-driven, but also other costs are reduced in this quarter. That is the third quarter in a row where we actually are reducing cost in our Norwegian operation. We will have somewhat lower volumes in Q4, and so we think that we see somewhat higher cost in Q4 compared to Q3. In terms of contracts and contracts going forward, it's for Q4, 25,000 ton- 26,000 ton, the same as for Q4 2017, and Q1 around 23,000 ton contracted or contracts in negotiation for the future. On to the different regions, just there is huge variation between regions in Norway.
I think this goes for many farmers, but certainly Marine Harvest is We are in all areas in Norway, you can see the huge deviation in operational EBIT, from EUR 0.0113 in Region South to EUR 0.0267 in Region North. The reason for this is higher harvest volume in Region North, good production. In Region South, lower volumes. We have had to take out fish at lower average weight, which results in both higher cost and lower price for the product. Region Mid is a little bit in between here, obviously it will deliver about the same result as last year. We go to Scotland. Scotland has had a challenging year, this is slide 11, in 2018. Good price achievement, increased costs due to biology in the quarter and for the year as a whole, it's the fact.
We expect this cost to come down in 2019 due to higher stocking and also due to new sites with farming in Scotland. You will see when we come to the volume guidance that we expect Scotland to increase with about 20,000 tons, coming back to the volume we harvested in 2017. I go on to the Canadian operation. This now consists of both the Northern Harvest, which is on the East Coast, and our old Marine Harvest Canada on the West Coast. EBIT here is down. It has to do with high mortality on the West Coast, especially due to gill issues and low oxygen on those sites. That combination is actually deadly for the fish. That means higher cost and as you can see from the waterfall.
We have integrated and are in the way of integrating Northern Harvest into our Canadian operation and we expect good numbers from them going forward. Over to slide 13, where we see the Chilean operation. Chile had a good quarter with the operating EBIT on the same level as last year, but on fairly okay prices and stable production. Good biological performance in Chile at the moment. We have reduced medicine use and also less sea lice on our farms. We expect volume share to increase in 2019 and getting back to where we were before the algae bloom. Ireland, Faroe Islands, small operations in Marine Harvest, but delivering good results in terms of EBIT per kilo. Ireland is the record holder so far this year. It's not because of low cost, but because of good sales performance and sales of organic salmon at very good prices.
Faroe Islands, something new there. We invested in a processing plant this quarter, and that will give us the possibility to select our harvest days, which is especially important for the Russian market. We believe that will give payback rather quickly. Go to slide 15, look at consumer products. Strong growth in revenue and volume. 27% volume increase of finished products in this quarter. Operating revenue grew from EUR 447 million- EUR 518 million. We see good growth in consumption basically in all markets. What we see in Europe is pretty strong competition in this segment because of new players coming into the market and also players going into the market to make a profit going forward. Impairment loss. We lost one processing plant in the third quarter in Trith-Saint-Léger due to fire in France.
We have taken into account EUR 9 million as a result of that. This was fully covered by insurance. What we do going forward in France is not decided yet. We then go to the feed slide on slide 16. Record high volume in this quarter. The factory produced almost 100,000 ton. That is a new record for the facility in Bjugn. You remember, for those of you that have been shareholders in Marine Harvest, this processing plant was designed for 220,000 tons. They really utilize it well when you can do 99,000 ton in one quarter. In a tough market in fish feed at the moment. At the same time, our results is burdened with some expenses linked to the Scottish plant. Going on to the Scottish plant, somewhat delayed construction in regards to Scotland.
This has to do with power coming onto the site and the way the power supply companies are structured in Scotland. That has been a headache for us. Also somewhat higher pier construction in Scotland due to regulations, especially on dredging. Somewhat delayed. We expect the plant to start trial production in Q1 and that we are into full production in the second half of 2019. Going to the third quarter financials. A little bit on supply, demand. I would run rather quick over the number slides. You can ask question later on if you have any. The profit and loss, we've basically been through, at least the headlines on that. If you then go on to the financial position on slide 19, you see the equity ratio is down from the same comparable quarter to 44% this quarter, compared to 54.3% in the quarter of 2017.
Still a well-financed company. Talking about financing, first cash flow. If we look at the cash flow, you see net interest-bearing debt in the beginning of the quarter at EUR 950 million. Operation EBITDA at EUR 246 million. Change in working capital, EUR 18 million. Actually would have liked to see that even higher. That has to do with the volume of biomass in sea. Taxes paid, EUR 11 million and other adjustments, EUR 7 million. Cash flow from operation at EUR 209.1 million. Net CapEx is high in this quarter, EUR 118.9 million. Has to do with the feed plant because this is the final construction part of the feed operation. Also other investments here are much higher than this major component areas, the Northern Harvest acquisition.
If you then go to the end, it leaves us the net interest-bearing debt at the end of the period at EUR 1.2 billion. Looking at cash flow guidance on page 21. Working capital build up, EUR 120 million. This is to support further organic growth going forward. CapEx for the year are revised up to EUR 295 million from EUR 270 million, explained by EUR 20 million extra into the feed factory in Scotland and a processing plant, both the purchase and the equipment, new equipment in here for EUR 5 million. Northern Harvest, as I mentioned, EUR 215 million. We have bought Norwegian farming capacity growth, EUR 70 million, 5.7 unit licenses. Interest paid is EUR 40 million. Taxes paid EUR 130 million, down from EUR 140 million similar quarter last year. Dividend we mentioned before.
On the finance overview of the financing slide on page 22, I guess it's the five-year convert that was issued in November 2015. There's a soft call on that in November 2018. Some of this has been converted into shares during the quarter. The outstanding amount is EUR 250 million. Other than that, the five-year bond is unchanged and the long-term net interest bearing debt target is unchanged at EUR 1.4 billion. On to supply development in the quarter. Norway was up with 4.1%, Scotland down by 19.5%, Faroe Islands down by 12%, maybe a little bit higher than we expected. Ireland down by 22%. All in all, Europe was up only 400 ton in this quarter. Little bit on the low end compared to what we expected.
Chile, a little bit on the high end due to good growth and higher average weight of the fish harvested in Chile in this quarter. All in all, 3% growth in the quarter of 2018 compared to quarter of 2017. In terms of price development on slide 24, you can see the different markets. In euros, the price is down with 4.7% for Norwegian salmon into Europe. We have an increase in price of Chilean salmon around 5%-6%, and stable prices in the quarter for fish from Northwest and Northeast of U.S. All in all, I would say that compared to last quarter, which were Q3 2017, which were as well, this was another good quarter price-wise for Marine Harvest and for the industry.
If you look at the supply side on page 25 or the demand side, sorry, and the global volume by market, you can see E.U. had a modest growth of 1.3%, Russia 29.8%. Europe 3.4%. Remarkably strong growth in the U.S. and in Brazil, 11.1% in the Americas. Asia slightly down 2.6%. China, Hong Kong grew by 11%, other Asia were down. Explanation is probably that more fish is going directly to China and not so much going via Vietnam that happened last year. All in all volume growth by market at 4.9% in this quarter. Look at the industry supply growth. We expect modest growth the rest of 2018 and in 2019. Actually, a reduction in 2018 to 4%-5% from 5%-7%, and a global growth in 2019 in the area of 1%-6%.
This is on the back of what we know around smolt numbers, what we know about feed sales, and also what we know around regulations in the different countries. I think it's fair to say that there is not room for a big chunk of growth in the salmon sector in 2019. In regards to Marine Harvest, the picture is the same in Norway. A very modest growth from 229,000 tons- 236,000 tons in 2019. In terms of Scotland, we are fairly confident that we can grow back the volumes to what we had in 2017. Back to 60,000 tons. This has to do with smolt stocking, new sites in Scotland, and what we see from biology as we speak. Canada is basically add-on of Northern Harvest onto volume. From 42,000 tons this year to 55,000 tons next year.
Chile from 54,300 tons- 62,500 tons on the back of good biology, and the smolt stocking we have done in 2018. Other countries, rather limited increase. All in all, from 380,000 tons- 430,000 tons for Marine Harvest in 2019. We look at the outlook. Last slide in this presentation. What we see and have seen throughout this quarter. Remember, the third quarter is not the strongest quarter demand-wise. We see going forward a strong demand for our products. Fish Pool is up from last time we spoke from EUR 0.064- EUR 0.068 per kilo on the 12-month forward price. We believe there is room for further growth in China with further removal of export restriction from Norway. The supply outlook we've been through, it's supporting a good price environment also in 2019.
Organic growth in Marine Harvest continues on the fish feed side with the building of a new fish feed factory on the farming side with expanding into eastern part of Canada especially, but also growing slightly in Scotland and in Chile. On the processing side, we continue to expand the business. We are to open a factory just as we speak in Shanghai. The next factory in line is in Miami. We continue to build processing capability around the world and in the marketplace where we sell our fish. Dividend, just to take it one more time, NOK 3.6 per share to pay out in Q4 as ordinary dividend. If you have not signed up for the Capital Markets Day in Edinburgh, there's still room, I believe. That is on the 13th of November.
With that, I will end this conference call and open up for the Operator to take questions.
Thank you very much, sir. Ladies and gentlemen, if you'd like to ask a question today over the telephone, please press star one on your telephone keypad now. We'll pause for a moment to allow everyone to signal. That's star one. Again, ladies and gentlemen, that's star one on your telephone to ask a question. Sir, we don't seem to have any questions over the telephone today. I'll hand back over to you for any closing remarks.
Thank you very much. It must have been crystal clear, and thank you for listening in. Any question, we'll be around for the next quarter. Thanks a lot.
Ladies and gentlemen, that will conclude today's conference call. Thank you very much for your participation today. You may now disconnect.