I think we just jump right in on the headlines. You have seen this statement, we continue on the highlights. This quarter was a very strong quarter for Marine Harvest. We had an operational EBIT of EUR 112 million, that on the back of low supply but also high demand in the quarter. What we see record high prices throughout the quarter, both in Europe and in Asia, strongly improving prices throughout the quarter, but especially in March in the Americas. In Norway, our result was hampered to a certain extent of a high contract share this quarter at 65%. Chile impacted by algae bloom in Region 10. That happened in the beginning of March. What we have had to do in Chile during, and will do in the second quarter going forward, is to restructure the operation to a more efficient unit.
Consumer product obviously had a challenging quarter in the first quarter. Very high raw material prices, this is not the high season for consumer products. Also impacted negatively from the operation at Rosyth. The board has decided to pay out the dividend for the first quarter of 2016 at NOK 1.7 per share. If you look at some numbers, just the headlines, Ivan will come back to this in more detail, but our top line grew with 10% from EUR 735 million in Q1 2015 to EUR 809.5 million in Q1 2016. Our operational EBIT increased with 17% from EUR 95.3 million to EUR 111.9 million. This on the back of a slight reduction in volume, down from 99,476 tons to 96,600 tons.
In terms of prices, this just show what I already said on the first slide, that we see increasing prices, especially in Europe and Asia, or the level is at record high in Europe and Asia. Also, as you can see, improving prices both from Canada or Canadian salmon and from Chilean salmon throughout the quarter. Especially, we see a stronger improvement on Chilean prices after the algae bloom throughout March but also partly due to reduced harvest volume in that month in Chile even before that. In terms of price achievement, here you can see especially Norwegian salmon, Scottish salmon, you see we perform below the spot price level, and that has to do with contracts being at a lower level than the spot price throughout the quarter.
Canada price achievement around the spot price and also in Chile due to a little bit poor quality fish and some contracts price achievement throughout the quarter was below what we achieved in Q1 2015. In terms of the operational EBIT to bridge the result from Q1 2015 to Q1 2016, we see that almost all parameters are the same, expect the price achievement is contributing positively into the farming result. We know that the cost in most farming units are up, but even though costs are up, price is growing our operational EBIT line. Feed about the same, market slight improvement, consumer product slightly below last year, and other entities a slight improvement from 2015. Into the different farming regions. Norway, obviously a good result.
We had the operational EBIT of more than NOK 100 million in the quarter at the same level or slightly above last year on the back of a much lower volume. We harvested 53,900 tons in this quarter, compared to 65,200 tons in this first quarter of 2015. What we see in this quarter is certainly high cost and high cost basically due to two reasons, high feed cost and that is on the back of feed prices and feed conversion rate. That's also connected to issues in regards to sea lice and especially sea lice issues in Q3 and Q4 in 2015. Challenging but improving at least from what we see going into Q3, Q4, slight improvement, but we will have high cost also in Q2 of 2016.
On the contract side, as already mentioned, high contract share in the quarter actually above our guiding on 50%, we had 55% contract share in the quarter. That has to do with harvest level being low, as you saw in the previous slide. The reason for that low harvest level was that we harvested out fish in Q3 and Q4 especially in Region Mid in Norway that should have been harvested out in this quarter. We see contract share at about the same level percentage-wise in Q2, slight drop down to 27,000 tons, then a drop in contract share in Q3 2016. Obviously, this is rolling contracts that continues, we will continue with contracts. It's not like we will remove contracts from our portfolio, because we are building business for the long term in Marine Harvest.
The results in the different regions, I think we will see here that Region South and Region Mid are the 2 regions that's struggling throughout the quarter. Region South, basically it is issues around PD and CMS, and poor performing, in fact, poor performing fish from the S0 generation of 2014. We'll see that Region South will improve towards the end of Q2 when we start with the spring generation of 2015, and if everything's equal, continue to improve throughout the second half of 2016. Region West performing well, have a higher cost level than normal going forward, on the back of sea lice treatments in this region. Region Mid, a little bit similar situation than Region South. What we see in Region Mid is good sites going forward, good cost levels going forward. This region is, to a certain extent, under threat from ISA.
We know that another player in this industry are harvesting out ISA fish in the region, obviously, that can hit us as well. Region North, good performance in the quarter. We have one site that we have been harvesting out partly in Q3, we'll finish off now in Q2 with ISA. Other than that, this region looks to perform well also going forward and having a good cost level ahead of or going into the rest of 2016. Off to something completely different. We all know that this industry needs to change. I think what the Norwegian government has done to put in place incentives to come up with new and more environmentally ways to farm salmon is really a good initiative because this country need to continue to build and live from something after the oil industry, we have the opportunities.
I will now show you a few examples on how fish farming can be in the future. This is concept we have applied for development licenses for. That is a good incentive, I think at least there will come some good out of this that will fundamentally change the industry going forward. The Beck cage system is a system which you can lower the cage down under wave action, take it back up into surface level, and turn it around. The dimension of this cage is 100 m long and 24 m in diameter. It's a substantial construction. It's very strong, it's rather cheap, and it can go offshore. We will start with this in Region Mid, as soon as we get the license.
In combination with a project that I will mention just now, which we call the Blue Revolution Center, we will document fish welfare together with NMBU, which is basically where the veterinarian study today, and SINTEF. We combine fish welfare, fish health, and technology to come up with new ways to document how the fish react on these new farming systems. I think we have a bright future ahead, but it's always smart to be ahead, also documenting what we do beforehand. In addition, this is another concept that we have applied of licenses. This is a cooperation with a company from Telemark, in fact, and it is a closed system, which is a little bit different from the system that I showed you last time. It's a doughnut-shaped structure, about 15 m in diameter in the tube.
It's HDPE plastic pipe, and it's a very big construction for that type of product. The advantage with this is that the fish will swim against the current, but also that you can take in water from different levels. It's not the best pictures here, but you can see these pipes going down here. They can go down deep, and they can retract. By doing that, you can adjust water temperature. Instead of having a fixed entry point of water, like 40 m or 50 m, you can up it in the summertime to take higher temperature water and adjust to a correct temperature level. The water current there will be set by propellers, and the fish will swim against the current. The big white pipe that you see is where the water goes out.
In this system, we will also collect solids, so there will be no effluent from this farming system. Very interesting. We hope that we can get going with all these systems as fast as possible because I think if we're going to grow this industry, and we really want to grow it, we have to do it in another way than what we are doing today. Just to sum up the last concept, this was presented last time, so I will not go into detail. We also applied for 14 licenses here and still haven't got any answer from Department of Fisheries or the Directorate of Fisheries, which is actually working on this. I understand they have a lot to do, but I really hope that we can get going because it is important to come up with new solutions for many reasons.
All in all, Marine Harvest has now applied for 28 licenses. We will continue with more projects. Marine Harvest has a big R&D department. We have approximately 25% of the licenses in Norway. I think it's only fair that we get 25% of the development licenses, maybe even more if you look into what we are doing in terms of R&D and new development in the industry. Over to Scotland. Scotland improved their result from EUR 2.3 million in Q1 2015 to operational EBITDA of EUR 8.5 million in Q1 2016. On the back of higher volumes, w e are more or less back to normal. The first quarter of 2015 was a challenging quarter. Back to 12,620 tons in this quarter. Again, you see feed cost is up, non sea water cost is up.
We are in a restructuring phase in Scotland, and we will continue to improve this operation going forward. High contract share as already shown in the quarter which obviously take down somewhat the result compared to what you could have had if you had only spot prices. Second quarter, high cost, but w e see improvement. This is more in the third and fourth quarter going ahead. It's going to take some time to turn around this business because we had a challenging operation there in the third and fourth quarter of 2015. Canada, they are in a very good situation. This quarter, we harvested out from sites with very low cost. We expect the cost on the sites going forward to be higher. The situation in Canada is good and price development in this region is excellent.
They will benefit from low supply situation into the American market going forward. We continue to Chile, which had unfortunate incidents with an algae bloom in beginning of March. This, I think there's no science that actually document what's the reason, but it has to do with El Niño, especially warm summer and a volcano that was in place in Chile in the beginning of this year. What we have to do here is in reality to restructure the whole operation. Chile needs regulations and predictable regulations. We have been talking about that for a long time, and the industry needs to change, but it will not change without help from the government. We are working with the governmental representatives to try to come up with new solutions that can bring Chile into a predictable future.
While doing so, I think it is important to make this business as efficient as absolutely possible. On the back of the algae bloom, we have had to write down our fixed assets with $16 million. In addition to that, we will unfortunately have to lay off 500 people because of lack of fish and lower volumes going forward. At the same time, we need to solve a challenging biology. It's no doubt. What's on the upside of this is increased prices going forward and or going forward, it's hard to know, but at least during the first quarter and so far into the second. It's balancing, but at the end of the day, a good biology, nothing beats that in fish farming and that has to be priority number one. Ireland, Faroe Islands, two different dimensions.
Ireland challenging this quarter with very rough weather and a result that is below our expectations and below what Ireland usually delivers. Faroe Islands with a very good result and operational EBITDA of EUR 2.34 per kilo compared or they didn't harvest in Q1 2015, but still good. What we see in the Faroe Islands is a revenue base here that reduces this result at 4.5% in the quarter. On to consumer products. Operating revenues is up from EUR 270 million in Q1 2015 to EUR 327 million in Q1 2016. What's good with this division is that we are working. We have a lot of new good products going into different retail chains throughout Europe. We are in a very solid position.
Obviously, the very high market price hit them, and we have additional one issue with the startup in Scotland, where we lost NOK 7.7 million in the quarter. If you adjust for those NOK 7.7 million, the result actually would have been good, taking into account the high raw material prices. What we see from demand in terms of salmon throughout Europe, very good growth in Germany, good growth in Italy as well, good growth in U.K., good growth in Spain. We see underlying performance improvement throughout our operations in Europe, with the exception of Rosyth that is taking down the result. We have put in place a lot of actions to improve this. We estimate the losses in the second quarter to be NOK 4 million and then to break even during the year. A full plan of how to change production is in place.
We have changed the management and put in place one of our most experienced processors in Europe. We aim to break even during the third quarter in this operation. Fish feed. Good production volume-wise, but as you all know, first quarter in fish feed is the low quarter in terms of volumes. We are down for about 100,000 tons of production in Q4 to 64,000 tons in this quarter. I think relatively good performance in the quarter, but as you see, a lower result than maybe what we expect, but we believe this will come much stronger in Q3 and Q4 especially. We have decided to continue to invest into this business. I think our investment in Scotland will change the industry.
If you look at the map and compare to other feed producers, you will see clear advantages by placing the plant in Kyleakin on the west side, very close to our farm. This is on the seashore, and will be, I have to say, the 1st modern fish feed plant in Scotland. It will serve Ireland, our Faroe Islands operation, our Scottish operation. It also produce all the smolt feed for the entire Europe. We'll build on the back of our experience in Bjugn, but a slightly change in terms of more focus on small pellets in this operation. In the first quarter, 86% of internal feed was delivered in Norway, which is at a good level. Ivan, you're more than welcome to go into the financials.
Thank you, Alf-Helge . Good morning, everybody. As usual, we start with the P&L, this time in Euros. Turnover-wise, EUR 810 million, which is up 10% year-over-year. Volumes are down by 3%, so consequently, price is a determined factor. Profit-wise, operational EBIT, EUR 112 million, up 17% year-over-year. Further down, our significant positive biomass adjustment this time because of the increasing prices during the quarter. Net financial items, -EUR 28 million, highly impacted by mark-to-market valuations of financial instruments. Interest expenses are at the normal level. Underlying earning per share, EUR 0.18 this quarter, as against EUR 0.14 the same quarter last year. Net cash flow per share, this time higher than the underlying earning per share, EUR 0.21, which is good. In terms of volumes, 96,600 tons this quarter versus 99,500 tons the same quarter last year.
Return on capital employed, annualized, 18.1%, up from 14.2% in the first quarter last year. Much about the P&L. Over to the balance sheet, or what we call the financial position these days. No major changes since last time we spoke. The total balance sheet amounts to EUR 4.25 billion this time versus EUR 4.20 billion at the end of the fourth quarter last year, i.e., year-end. Net interest-bearing debt, EUR 960 million at the end of the quarter, and equity ratio of 45.9%. Over to the cash flow statement and net interest-bearing debt. We started the quarter at EUR 1.0 billion. We released working capital this quarter, i.e., cash flow from operations was EUR 150 million, which is actually slightly above EBITDA. Net CapEx, in line with our previous guidance, EUR 42 million.
We distribute a dividend of EUR 67 million this quarter, which corresponds to NOK 1.40 per share. All in all, EUR 960 million at the end of the quarter in net interest-bearing debt. Over to the cash flow guidance. No changes since last time. We have converted our numbers into Euros from NOK. That's all. I will not go into the details. The audience can read these afterwards. The long-term target is also unchanged. Our board has decided to distribute a quarterly dividend of NOK 1.70 per share, which corresponds to EUR 0.18 per share, which is also equal to the underlying EPS in the quarter. We also state that the Euro is the reporting currency, which I guess you all have duly noted so far. Over to our financing.
No changes since last time. I think we will just move on to the supply and demand fundamentals. As usual, we start with the supply development in the quarter, which we have been through. Slightly above the expectations we had when we started the quarter due to Norway and Chile, latter as a result of a challenging biology and the algae bloom incident, which Alf-Helge has duly commented on so far. For Scotland and the Faroe Islands, we have seen a recovery of volumes compared to the same quarter last year, and growth in Canada as expected. Price-wise, a fantastic quarter. In Europe and in market currency, EUR 6.50 per kilo, which is unprecedented. We have also seen a recovery in Americas, actually, before we had the algae bloom incident. After the algae bloom incident, it has increased in pace.
As we speak, the Urner Barry for Chilean salmon is approximately $5.5 per pound, which corresponds to a price in-box for Chilean farmers near to $6. We are approaching break-even levels for Chilean farming industry, which is good. Unfortunately, the backdrop, I guess, is wrong. We have lost a lot of money in Chile over the past few quarters, and hopefully we can see black figures in Chile in the second half of the year. Over to demand. Strong demand in E.U. and Asia on the back of fantastic prices. As already mentioned, the U.S. market is recovering. Still challenging, but we now start to see prices that we can live with. Brazil impacted by a lack of volumes and a stronger relative U.S. price development.
Brazil, in general, is struggling with the economy, which is, of course, also affecting our customers in the end of the day. China, Hong Kong, unfortunately, still affected by a lack of large-sized salmon and not to mention the trading barriers. I'm talking about China. Over to our industry supply outlook. The numbers are changed since last time we presented our numbers here. The range for the year is even lower because of Chile. The other regions are more or less unchanged. We also foresee a drop in the quarter we are in as we speak. The prices have actually increased after the first quarter, which is also a little bit abnormal, but because of low volumes, that has been possible. For the remainder of the year, the supply fundamentals look very favorable from a price point of view.
This bodes well for 2016 as a whole. Over to our internal volumes. They are also down, mostly in Chile, obviously 16,000 tonnes, but we are also reducing our volumes in Norway. We have gone down from 436,000 tonnes for full year to 414,000 tonnes. For second quarter, our volumes are as low as 90,000 tonnes, which is low for Marine Harvest. Alf-Helge . I would like to give the word to you so you can sum it all up.
Thank you very much, Ivan.
Thanks.
Yes, just to sum up the first quarter. Already said, but market balance is expected to be tight going forward in 2016. We just saw the supply numbers. Future prices, as we speak, is at EUR 5.9 per kilo, which is very high levels. In Europe, in Asia, we see strong consumer demand for the products. The more product we continue to develop and better products we continue to develop for the American market, I hope and think this will continue. One setback in Chile with the algae bloom, that will impact the supply into the Americas and Brazil especially. We all know that the salmon market is global, and it will have a global impact. We've had to do a real restructuring of our operation in Chile, and we'll continue to do that to make it the most efficient operation there is in this region.
We have applied for 28 licenses in Norway, and we will come up with more projects. We have a quarterly dividend, or the board has decided, at NOK 1.7 per share. I would like to invite you all to the regions where we operate. We will have a capital markets day in Bjugn. It's a great time to see operations where we are. We will visiting seasides. You will be able to see our feed factory, and you will really see where the value is created. Thank you very much for coming. With that, I will open up for questions, and Kim here has the microphone. Please raise your arm, state your name and employer. I see Kolbjørn is already early out there, Kim, you can start.
Kolbjørn Giskeødegård is going to go. Nordea Markets. Two questions. First of all, there's a lot of focus on contracts. Can you say something about the dynamics going forward with rolling out old contracts and rolling out new contracts? How quick can we expect the sort of contract average prices to increase going forward? The second one is on Chile. Given the current situation there, what are your thoughts on sort of growing in Chile in terms of buying other companies, M&As, et cetera?
In terms of contracts and that's an ongoing process, and we see contracts that we are entering into, I would say maybe not today, but already last week or during April is at a much higher level. That is a rolling, ongoing business, and we enter into contract at a totally different level than what you see from the numbers today. In terms of Chile, our focus will be the following. We will focus on our own operation to make our own operation as efficient as possible. We have said that what we need to see in Chile to really believe in the future is new governmental regulations. They've been said to be around shortly or should have been there already. I haven't seen them yet. There's still room to work there to get that right. I think a biological industry needs good regulations.
In terms of growth and consolidation. Consolidation, well, as already said, and I think you can lead from that we will focus on our own operation, and I am not ruling out anything, but that is our main focus. Growth, well, we will grow if we get our own production right, but within our own limits.
Even if the government will come up with what you call very good solutions or new regulations, you're still sort of holding back any aggressive M&A activities there or consolidation activities?
We never rule out anything, but in terms of regulations, we haven't seen anything yet. It's too early to comment, and we don't know what the content is in terms of those regulations. We have suggested how it should be regulated. I hope the government will listen, and I think it's about time to change the industry in Chile. Marius.
Marius Gaard of Swedbank, also two questions. The first one is to production cost. From the report, we can see that the cost of the biomass per kilo is a bit higher at the end of Q1 than it was at the end of Q4, which could indicate somewhat higher costs in Q2. You already said that costs will be higher in Scotland than in Canada, but how does it look in Norway and the other regions? That's the first question. The other one, you have applied for 28 development licenses. Do you know if you are awarded all the licenses, will this be on top of the 6% growth that the government will maybe award, or will it be on the side?
Total cost. You are right. The cost of biomass is up. Our production cost is also up. When you are reading the wording in the quarterly report, you will see that we are guiding for higher cost in Scotland, also in Canada. In Norway, we say it will be high cost.
I would say more or less at a stable level. It depends on the development during the summer, we don't know. In Chile, we are facing much lower volumes, which drives up cost. That is, I'm afraid, the way it works in this industry. In terms of the restructuring process we are initiating, we will, of course, benefit from it cash-wise quite immediately. As you know, the production cycle in our industry is quite long, so it will take some time before we start to benefit from it from a P&L point of view. In terms of your observation, I think we can confirm that the numbers are all right. It's a challenge we have in this industry, and that's why the projects Alf-Helge has been through today are so important. We have to do something differently going forward, one way or the other.
To your questions on development licenses and 6% growth and how that works together. First of all, I think the 6% growth is not in place as we speak. That is the intention to take that forward with a 6% growth for every generation or a 3% annual growth. I think there will be put requirements to that on sea lice level and biology in general. I think that growth will not come without being successful on new licenses. I expect that the new licenses will be on top of that growth. Obviously, if we solve the biological solutions in this industry, well, we still have challenges to face, but they are not in regard to biology. Even said that, we really need to come up with a new way to farm fish going forward.
We will put a lot of effort to do exactly that. Yes.
Vidar Strat, ABG. In the AGM notice, there is an authority request to pay out up to NOK 5 billion in dividends. Should we read this as an indicated level of the dividend or as a roof for the dividend?
No. That's purely administrative. If you look at the current proxy we got last year, it's the same amount, so do not put more into it than that. The salmon prices going forward will in the end of the day decide the dividends.
More questions? I don't see any hands, so too early.
Bruce Diesen, Ferncliff The supply and the demand figures you had didn't match. Was there a lot of fish that came out of inventory? Where is the empty freezer?
Good question. We have actually spent a lot of time on it, and no one knows exactly, to be frank. The lion's share is related to frozen inventory and Chile. I guess you partly answered your own question. This one was more like a confirmation from our side.
I think I just would like to thank you, and hopefully, you will come to Bjugn and see our operations. Have a great day, I think we would say. Thank you.