Good day, and welcome to the MHG Quarterly Report Q1 2018 international conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Kim Galtung Døsvig, IRO and Head of Treasury. Please go ahead.
Thank you, and good afternoon to you, and welcome to the Q1 2018 results call for Marine Harvest. Going into the presentation on page 3, the highlights. We released the numbers this morning and reported an operational EBIT of NOK 158 million in the quarter on the back of strong demand in all markets, and we saw increased prices from the Q4 2017 levels. Also on the highlights, was the cost decrease in Norway sequentially compared to Q4. We also posted seasonally record strong results in the Consumer Products division , and also in Marine Harvest Ireland, which is our organic salmon operations. The board resolved a dividend of NOK 2.6 per share, which will be paid in late May. Going on to page 4. The revenues in the quarter was down 3% year-over-year, reaching EUR 862 million, on the back of reduced salmon prices, but also 3% lower harvest volumes.
The operational EBIT was down year-over-year but still at EUR 158 million, which, in a historical context, is a very good result with a return on capital employed of 25.3%. We had underlying EPS in the quarter of EUR 0.24, and net cash flow per share of EUR 0.21. Moving on to page 5, the salmon prices. We saw in the quarter that the salmon price in all markets increased from the levels in Q4 and have also continued to rise in Q2 to date. A good price development both in Europe, in Asia, and also in America. Page 6. We see that the Norwegian price achievement was close to 100%. That meant that contract prices was also close to the benchmark spot levels. We have changed the reporting on this page a little bit compared to the prior quarters.
Price achievement no longer includes margins from Consumer Products and Feed , and comparison figures have been represented accordingly. Hence, this is more comparable to the farming achieved results. In Scotland, we see that the price achievement was 112%, mainly explained by good contracts. The contract share was high, which contributed positively to the results. In Canada, we had no contracts, hence the price achievement was close to 100%, and in Chile, it was slightly below. Moving on to page 7 and the waterfall on operational EBIT. We see that the Feed contribution was slightly down year-over-year. Remember that the feed has a seasonally low quarter in Q1, and this quarter was also impacted by the construction phase of the Scottish new feed plant. Some of those expenses cannot be capitalized, hence it has a negative charge on the P&L for feed.
In farming, the negative deviation is mainly explained by price. In fact, costs were down globally compared to Q1 2017 of about EUR 0.10 or EUR 8 million. The difference is price. Markets was more or less the same. Consumer products we saw an improvement year-over-year. Going into the various Farming divisions on page 8. Norway, the good earnings were supported by reduced biological cost in the quarter. We see on the right-hand side that prices were down year-over-year, but all of the other bars are positive. It was a good quarter in that regard. The biomass in Norway has decreased in the quarter because of a cold winter in Norway but also in Scotland, and this has reduced the biomass.
We do see that the biology on the 2017 generation is performing better than the 2016 generation at the same time last year. We do expect to grow our volumes, in particular in the second half. Going into the second quarter though, we expect the costs to increase somewhat compared to Q1. The contract portfolio on page 9 shows that the contract levels in absolute terms is about 20,000 tons. It's fairly stable compared to previous quarters. Yeah. The regions in Norway, we have a lot of disclosure on that in the report, so I will leave that. On page 11, on Scotland. Scotland had a weaker quarter than Q1 2017 because of significantly reduced volumes. We see that the volumes are down from about 18,000 tons to 7,000 tons. The contracts contributed positively as they were struck above the spot price for the quarter.
The reduced volumes have also increased the cost in the quarter as we have lost scale, and we've also seen that the biology has impacted higher, or has meant that the mortality rates have been slightly higher than expected. The cost is also expected to remain at a high level in Q2. In Canada, on page 12, you see that the profit is down year-over-year. Reduced spot prices impacted the earnings. Also, less growth in sea have resulted in less biomass available for harvest. Hence, the harvest volumes were down from 9,000 tons to about 6,500 tons. Canada will, in 2018, harvest less in the first half compared to the first half of last year because of the biological challenges we have experienced in recent quarters, but from the second half onwards, we expect to harvest at higher rates.
In Chile, on page 13, you see the same effect of lower salmon prices year-over-year. We have seen more supply out of Chile, this has pushed the price down compared to Q1 2017, as the prices at that time were record high. Costs have improved year-over-year, quite good cost performance in Chile in this quarter. In fact, the lowest cost in the group. That's good to see. Harvesting volumes are up on the back of the algae bloom we experienced in 2016, which impacted the harvest volumes available for harvest in 2017. Now harvest volumes have recovered, this is positive from a scale perspective, of course. Moving on to page 14, Ireland, Faroes. A very good contribution from Marine Harvest Ireland. This is our organic salmon operations.
It's a really fantastic product and a really good performance in the past year. Very high prices or sales prices for organic salmon, and also cost performance has been good as we have harvested from some good sites in the quarter. The EBIT per kilo of NOK 4.37 is really good. In Faroes, we harvested less because of lack of sites. Hence, profits are down, and we will start to harvest in June in Faroes again. Consumer products on page 15. We have done a reporting change. Previously, consumer products only included our factories and processing plants in Europe. Now we have included all of the value-added plants as they have grown in size and become a meaningful contributor. We have included our Asian factories and also American factories. The Q1 2017 figures have been re-presented.
Notwithstanding that, we see that the volume sold is up 20% year-over-year. 40,000 tons of salmon or of product sold compared to 33,000 tons is really good performance globally from that division. Really impressive demand for salmon across Europe, Asia, and also Americas. A good operational EBIT of 4.2% in the first quarter. Moving on to page 16 and feed. Feed had a low season, as mentioned. The feed prices reduced year-over-year. However, they are slightly up since the year end, so they are gradually being increased in Q1 and Q2. Volume sold, you see, is below produced because we are preparing for the high season in Norway now entering the summer. That supports also more feed consumption to come and higher growth and higher harvesting.
There you see a picture of the new feed plant, the construction site of our new plant in Scotland. Note that the opening has been delayed by one quarter because of delays in obtaining the permissions. Now all the permissions are in place, including the pier permissions. It's been delayed by one quarter, but it looks like a really good project for us. Into the financial section on page 18. Just going briefly through the main figures. Operational EBIT, we have talked about. You see that we have a big positive effect of the net fair value adjustment line. This is because of the increased prices and the forward prices in the quarter. We mark-to-market our biomass, hence a positive mark-to-market effect in Q1. The income from associates, that's Nova Sea. They had a really good quarter.
They harvested about 7,000 tons and achieved an EBIT per kilo of EUR 2.68. Another good quarter for our associated company, Nova Sea. Net financial items of -EUR 38 million was impacted by the mark-to-market valuation of the convertible bond as the share price increased throughout the quarter. Going further down, I think I already mentioned the underlying EPS of EUR 0.24, and a cash flow of EUR 0.21. On the balance sheet or financial position on page 19, no major changes year-over-year. Total assets of EUR 4.4 billion, with an adjusted equity ratio of 51%. Cash flow and net interest-bearing debt on page 20. The change in working capital, the positive effect is mainly because of the receivables in the consumer products. We sell a lot of products in Q4, and we get paid in Q1. Taxes paid, it's in line with the guidance.
CapEx of NOK -76. The dividends, of course, were paid in Q1 of NOK 2.6. NOK 2.6 is the same dividend as the board resolved for Q2 payment. Cash flows on page 21. That's unchanged in the quarter, so I will not spend time on that. On page 22, the only change in our financing is that we have repaid the NOK 1.25 billion bond, which matured in March. Apart from that, the financing is unchanged. Page 23, the supply development. The supply was in line with the guidance, up 7.5% year-over-year. We saw an increase both in Europe but also in the Americas. However, the increase in Europe, in Norway and Scotland, the harvest in those two areas were less than expected because of the cold winter and the reduced biomass.
Conversely, in Chile, it harvested not only slightly, but more than expected, mainly driven by the algae bloom and accelerated harvesting in Q1. Moving on to page 25 and the market. We see that the total consumption of salmon is up by about 60,000 tons or 10.6%, which is similar to the harvest growth in the year, meaning more or less no inventory changes. We see impressive demand in Europe, in particular in the fresh category. Really good demand response there. Both the French market, the German market, and the U.K. market grew, that supports consumption in Europe. It also means that once the major markets increase consumption at these rates, then call it less salmon available from Europe being sold into other markets.
If we go down to Americas, we see that the 12% growth in Americas, that's mainly driven by or supplied sourced from Chile. Less European salmon was sold into the U.S. market. It was Chilean salmon that was sold into the U.S. market and also the Brazilian market. Of course, Asia was really good. China, Hong Kong, up by 38% year-over-year, and many other parts of Asia, it was also very good. Overall, strong demand. Page 26. The guidance for 2018 has been revised down from 3%-8% to 1%-6% growth compared to 2017. That's both the reduction in Europe and also Americas. We see that for the remaining part of the year, in Q2, we expect between -2% and +4% growth, so a low single-digit growth. In the second half, the same, a low single-digit growth.
Onto our own volume guidance on page 27. On the back of the biomass situation, we have reduced our guidance in Norway about 7,000 tons to 242,000 tons. Canada has been reduced by 3,000 tons to 43,000 tons. Our overall guidance is at 400,000 tons. The outlook on page 28, similar to last quarter, we mentioned a strong financial position. We have a very strong balance sheet, good cash flows. We focus on many growth initiatives organically throughout the company, both in feed, of course, with the new feed plant in Scotland, on the farming sites in Norway, we want to grow. We also have new sites in Scotland, in Canada, where we also try to grow, in Chile, it's more of a recovery growth post the algae bloom in 2016.
On Northern Harvest, we submitted an information request into the competition authorities to acquire the company, which is based on the east coast of Canada, and we're awaiting their feedback or response on that. The Global Cost Savings Program was launched or announced last quarter, we're well underway. All initiatives will be initiated in the year, so far, more than EUR 20 million has already been achieved. A good start for the Global Cost Savings Program. The demand, we've talked about the forward prices up from the previous quarter, up to NOK 6.4. The entire forward curve has shifted up, which is good. The dividend, as mentioned, the board resolved NOK 2.6 per share in the quarter to be paid late May. With that, operator, I think we open up for Q&A, if there's any questions.
Thank you. If you'd like to signal for a phone question, please press star one. Once again, that's star one to be placed in the queue, and we'll pause for a moment to allow everyone an opportunity to signal. Again, as a reminder, that's star one to signal. Once again, that's star one to be placed in the queue. Mr. Døsvig, we have no questions in the queue at this time.
Okay. Very good. I hope it was crystal clear. We look forward to seeing many of you on the roadshow. Thanks for dialing in, and have a good day.
That does conclude today's conference. Thank you for your participation. You may now disconnect.