Good morning, and w elcome to the presentation of the third quarter 2015 for Marine Harvest. To present with me today, I have the CFO, Ivan Vindheim. And hopefully we can guide you through the numbers rather efficiently today. In terms of the highlights of the quarter, the operational result ended at NOK 720 million. Out of this, NOK 595 million came from the Norwegian operation. We know we had a very good result in our feed division, both in terms of volumes and profit. We put a lot of resources into finalizing the Rosyth plant in Edinburgh. Maybe one hour, its by far the biggest plant for value-added processing in Scotland. And we had to be ready for Sainsbury's and start to deliver. We actually started to deliver our 1st products just a few days ago. Some extra cost into that segment.
In terms of the demand, what we see in Europe is very strong demand, good prices during the quarter, and also we see into the fourth quarter and in October, good prices contained. The same for Asia, good demand for our products. In terms of the Americas, it's nowhere, nothing to hide that it's a very challenging market situation, and that has an effect especially on our Chilean fish, but also on our Canadian fish. And that is a fairly complex situation and has a lot to do with currency, but also to do with supply. In terms of the dividend and in light of the result and maybe especially in light of the tight supply going forward and the good demand, the board has decided to increase that this quarter from NOK 1.3 last quarter to NOK 1.4 for this quarter. Then on to the key financials.
In terms of the top line here, the sales came in at NOK 6.9 billion, year- to- date at NOK 19.8 billion, up from NOK 18.6 billion last year. In terms of the volumes, a slight decrease compared to last quarter, 105,000 tonnes or close to 106,000 tonnes this quarter, down from 107,000 tonnes last quarter. Operational EBIT came in for the group as a whole at NOK 6.8, down from NOK 8.5 last quarter. Ivan will come back to and go through the numbers in more detail later on.
Just to look at the prices, what we know is that the European price in NOK was up 16%, in EUR in the quarter was up 5%. We see a drop or at least a low price level in the quarter for the Chilean salmon, though the consumption in Brazil is up, it's 25% up, and the consumption in U.S. is up 12%, but at the same time at very low prices. This is very expensive marketing for the Chilean fish. We'll come a little bit back to that later on. Price achievement in the quarter. Contract share in Norway was 43%. Contract this quarter didn't give us as much headroom as we had the last quarter. They're still at very good prices. We had a contract share at 105%. In terms of superior share, a good number for Norwegian operation, 93% superior fish.
In Scotland, slightly lower contract share than what we usually have, 34%, and that takes down the price achievement in the Scottish operation. It's also fair to say that the Scottish salmon now is in heavy competition from the Norwegian salmon based on the change in currency rate between the two countries. Good superior share here at 92%. Canada, we basically sell everything on spot in Canada and we achieve market price. And for the Chilean operation, they have a good price achievement at 114%, up from 110%, and that's really due to that we are selling more fish into the Brazilian market. Also here, fairly low contract share and under our target of 90% in terms of superior fish. Operational EBIT to explain the difference between Q3 in 2014 and Q3 in 2015.
We see that our feed operation is NOK 53 million better than what we did in the third quarter last year. It's farming that's really hurting here, and it takes the result down to NOK 314 million. Most of this or approximately NOK 220 million is cost, FX rates is the remaining. Sorry, prices they're remaining drop. Other changes are fairly small compared to last year. To go into the Norwegian operation. Good result in the quarter overall, but especially driven by the price increase. We have increased cost due to both feed price, feed cost per kilo produced, but also because we are going in, especially in Region Mid, and taking out fish at a lower harvest weight than what we should- what is ideal. And this is to- in some smaller areas, this is to actually solve the sea lice issues. We have to go in.
There's nothing working other than freshwater that we use for treating sea lice. And then we go in, take out the fish, just so we don't contaminate all the fish for the future. It's very important to be on the ball and have capacity, both in terms of wellboats and processing capacity to deal with this issue. And obviously, when you take out lower size fish, the cost is higher and usually the price is lower. Nothing good about that. We have implemented gradually through the quarter and throughout the year, in fact, a new sea lice strategy, which is focusing on following points. One, we're not- when we reach 0.2 gravid females, we set in action. This is earlier than government demand, and it's very important because to reduce the probability of actually spreading more sea lice around.
If we're going to grow this industry going forward, we cannot have the same sea lice number as we have today. Our aim is to have zero gravid females in the ocean. This also means that we have to be more precise. We count sea lice in every pen every week. It's quite different from the governmental requirements that is much more lenient. We have to be on top of this situation, or it can basically threaten the whole industry. In addition to that, it means focusing on non-medical tools. Meaning everything that the sea lice cannot be resistant against. That is our main tool in terms of treating sea lice. This is obviously wrasse, both ballan wrasse and lumpsuckers, which are the two fishes that works against sea lice. It's also using skirts, using feeding operations, feeding the fish deep down, using light.
At the same time, we have many R&D projects on this topic. Amongst them, everything from laser to freshwater treatments. Freshwater treatments is maybe not even research anymore. Freshwater treatments in some areas is the only thing that works currently. And that takes equipment, it takes planning, and it takes good management. In addition to that, focusing on extremely clean nets, so the wrasse is working on the salmon, not on growth on the net. It's a huge job. In some areas, we are better off than others. In some areas, we see result. And it's also a huge job where we are dependent on, at least to some extent, on the success of others. But this is interesting. For example, in Region South, we see good effect of this at the moment. In Region North, we are in complete control in our operation.
We have an area in Region Mid where it's challenging, but also in Region West, at least up to Sunnmøre and part of Sunnmøre, things are working fairly well. If everybody could do the same, and we are meeting with the farmers, and we really hope that we can coordinate this and get it right, we could gradually see a solution, at least over time. But it's not going to be easy. It's going to take discipline and a lot of hard work, and it's going to take the necessary capital to put into the equipment. But the reward at the end is lower treatments and obviously less use of chemicals, and that's what this industry should aim for. Back to the result. You see exceptional items there, NOK 2.83, especially in Region Mid.
Here we have spent plenty of money on sea lice, and it's been a very challenging summer in that area. I'll come back to that a little bit. Back to sales contract and the portfolio there. We have in Q3 in 2015, around 25,000 tonnes contracted, slightly up or up to 35,000 tonnes in Q4. Harvest volume is obviously also up in Q4. In Q1 2016 is down to below 25,000 tonnes. To put it like this, we are not entering into any contracts at this moment because we are basically sold out. Not sold out, but close to sold out. We believe that if we should do more contracts now, it has to be on extremely high prices. Back to results in the different regions. Overall, none of these operations are top performing.
The sea lice cost is too high in most regions here to be able to really perform well. On average, we are doing fine. We have challenges in South this quarter and will not be on the top in the South in the fourth quarter either. NOK 8.3 in EBIT margin. The reason for that is low volumes. We had more S0s in Region South and thus a better result in Q1 and Q2. Also that we have had issues with CMS and PD in this region has taken the cost up. Region West performing fairly well, also has had site, especially in the northern part of where we have had to go in, take out fish at 3 kg, and just empty out the whole site just so we don't get any more issues. But fairly decent result.
The drop in Region Mid, this is mostly explained by the sea lice situation in Region Mid. We have had to take out three sites at very low harvest weight, around 3.5 kg gutted weight, which brings up cost and obviously take down price on that product. Region North, they are actually performing well in terms of the sea lice. They are in complete control, at least in the situation, but it has taken a lot of effort to come to that situation. All in all, satisfied with the result, but the opportunity to make this better is certainly there. Scottish operation. We made an EBIT of NOK 102 million in this quarter compared to NOK 137 million in the last quarter. In our Scottish operation, we are in competition, obviously, with Norwegian salmon, more so than ever.
And this has to do with the stronger pound compared to the NOK. Price-wise, lower prices, but on the flip side of that, better volumes have reduced the production cost in this operation. Again, in the Hebrides, somewhat challenging biological situation. In a few sites here, we have had to take out and will have to take out smaller fish going forward. In the Canadian operation, for those of you who have been on the west coast of Canada this summer know that the summer came early. It's been probably one of the warmest summer in B.C. ever, resulting in algae blooms and low oxygen in the water and a very challenging environment for fish farming. In addition to that, low prices on the back of both supply growth and also in competition with the Chilean fish.
All in all, I am satisfied with how we perform in Canada, even though the result is too bad. Into the big picture, the fundamentals in our Canadian operation are good. If we go to Chile, which is a real challenge, you know that the Chilean situation is both concerning and not sustainable in terms of this cannot continue. It is just the way it is. It cannot continue in regards to both the biological situation in terms of regulations. They are not on top of it, the government in Chile. They really do not see this as a crisis. They see it as, yeah, well, it goes up and down, and so on. But we need predictable regulations in Chile going forward to be able to put this country back on the track.
In addition to that, I would say that obviously it's more a market situation than a cost situation, maybe in this quarter. And that comes from somewhat high supply, even though the harvest volume in Chile is down. In this quarter, it was released about 11,000 tonnes of frozen storage into the market from the Chilean producers. Which obviously didn't help on the supply situation in this quarter. It is a perfect storm. The Real and the change in currency here makes obviously the buying power in Brazil lower, even though they're buying salmon. The consumption in Brazil is up 24% quarter-on-quarter, but obviously they are paying less, and they are paying lower prices than breakeven by far. Even worse is the situation in the U.S. market, which Chilean salmon has been- even though it's not right, it's not correct.
There's no antibiotics in Chilean salmon. Obviously, Chilean salmon is very strictly monitored throughout the production cycle. When it goes to market, there's zero antibiotics in the fish, or you couldn't sell it. But they are using antibiotics when they raise the fish and t hat's the concern for some food authorities and also in the U.S. And also a concern for the fish farmer, and should be a concern for the fish farmer, because you cannot run a sustainable operation using this much antibiotics. Not a problem for people, but a problem for the fish and resistant force bacterias. So that needs to change. In terms of cost, down a little bit from the fourth quarter, but still at a high level and obviously much higher in terms of breaking even, as you know.
Prices there are at record low and has continued to fall into the fourth quarter. Ireland, Faroe Islands. I think okay result in Ireland. In Faroe Islands, we start harvesting. We look forward to that. We will do approximately 2,000 ton in the third quarter. No, in the fourth quarter, sorry. We will do 11,000 ton come next year. This is an operation that will give a good contribution into our result, even though it's small. Consumer products ended revenue-wise, okay, slight growth here. Operational, EBIT-wise, in line with the third quarter last year, slightly down. In terms of explaining this, we had call it almost a one-off in our Scottish operation in Rosyth. This is to prepare to get ready for a really, really big retail customer that requires good service, and we also had to set up a new factory in the quarter.
Here we cannot fail. We have to succeed in delivering products, this will be good going forward. We spent about EUR 3 million on getting ready for this. In terms of elaborated products and the share of that, this increases. That's in line with our strategy, that's really what drives demand for salmon going forward. It's not selling whole fish, it's selling value-added fish and convenient fish for the consumer, not only in Norway, but in Germany, in U.K., in France, in countries where people actually live. Strong growth, Southern Europe, Spain, very good growth, Germany, 11% growth in the quarter, France, an improvement over last quarter in terms of consumption of salmon, which is positive signs.
All over Europe now, the demand for salmon is good and strong, and there are more and more convenient products out there, which is excellent going forward. In terms of fish feed, I think this surprises me and hopefully it surprises a lot of other people. They have delivered really well. We produced 91,000 tonnes. We sold 97,000 tonnes, meaning we had some on storage. We could actually have produced more in this quarter. In the highest of months, we were up at 38,000 tonnes, so very strong performance here. Good EBIT, and the EBIT here comes from, you know, we compare with- we buy, s till buy quite a lot of feed. We are probably the biggest feed buyer in the world. We compare the price we pay, where we buy, and average of that with the price we get for our own feed.
It shows that even a newcomer can do fairly well in this business. We also test the feed in our research station, and they perform well as well. Concerning going forward is El Niño and prices for fish oil and fish meal going forward. We are covered due to good contracts both in Q4 and Q1 on good terms in terms of these two raw materials, and then we'll see going forward how this will develop. Then, we will go more into the details on financials, Ivan , so with that I look forward to. Hurry up.
Thank you, Alf-Helge, and good morning, everybody. As usual, we start with the P&L. Operating revenues in the third quarter of 2015 was NOK 6.9 billion, up 11% year-on-year. Operational EBIT, NOK 720 million, down from NOK 912 million in the same period last year, mainly explained by lower profits in Americas due to poor prices, as Alf-Helge has already commented thorough on. And further down in the P&L. Net fair value adjustment of biomass, this time positive, NOK 359 million, due to increased prices at the end of the quarter, but also because of the higher biomass you see. As you know, the third quarter is the quarter when we really build up the biomass in this industry. Net financial items, as much as NOK -730 million this quarter, due to the weakening of the NOK and heavily negative influence on balance sheet adjustments in that regards.
In addition, we also have a mark-to-market valuation of the convertible bond, which also negatively impact financial items this quarter. As you know, when the share price is increasing, we have to post a loss under our net financial items. Underlying earnings per share this quarter, NOK 1.08. Dividend declared and paid in the quarter was NOK 1.30 as compared to the NOK 1.40 for the next quarter. In terms of harvest volumes, 106,000 tonnes this quarter, quite stable compared to the last, compared to the same quarter last year. Operational EBIT per kilo, in total, NOK 6.8 and return on capital employed, 12.2%. Much about the P&L. Over to the balance sheet, or what we call the financial position these days. Compared to the second quarter, which we do not show in this table, it's somewhat up because of mainly seasonal build-up of working capital.
Compared to year-end figures, quite stable. Equity ratio at the end of the quarter, 47.5%. That's down from 50.9% at the end of the second quarter, mainly explained by the weakening of the NOK. We are still reporting in Norwegian kroner. Consequently, the weakening of the NOK has a negative impact on the equity all else being equal. Over to the cash flow statement and the cash flow for the quarter. We started the quarter at NOK 7.7 billion in net interest-bearing debt. We made an operational EBITDA of NOK 1.042 billion. We increased our biomass in sea, which tied up working capital. All in all, net cash flow from operations NOK 591 million. Other adjustments here of NOK 114- sorry NOK 114 million is mainly previous restructuring provisions. Net CapEx for the quarter, NOK 413 million. Net interest paid NOK 65 million. This is the ex-amortization.
This is the pure cash flow related to finance cost. This number you can compare to the NOK 720 million number in the P&L. And the difference is mark-to-market valuations under IFRS regime. Dividend distributed in the quarter NOK 585 million, which corresponds to NOK 1.30 per share. FX effect on the net interest-bearing debt measured in Norwegian kroner is NOK 609 million for the quarter. All in all, net interest-bearing debt increased from NOK 7.7 billion to NOK 8.7 billion. Adjusted for the FX adjustment, which is at least from our point of view, pure technique and the profit for the quarter. The net interest-bearing debt according to ourselves is in line with what we expected. Cash flow-wise, we are in accordance with plans. Then over to the cash flow guidance. We have revised the working capital this quarter, mainly due to the weakening of the NOK.
It's up from NOK 900 million to NOK 1.3 billion. Once again, we are managing the cash flow in euro. All kinds of the Norwegian kroner adjustments doesn't have any impact on our decisions in terms of dividends, et cetera. As long as we are referring to the FX, I think we should apply that assumption. In terms of capital expenditures, NOK 1.9 billion, which is in line with the previous forecast. The breakdown we have been through sometimes already, so I will not repeat it here. But I would like to take the opportunity to remind you of that we haven't finished the Acuinova acquisition we announced in the fourth quarter for the last year. In total, it amounted to $125 million, but it's still a $18.5 million amount to be paid. That we will likely pay in the fourth quarter.
It's related to licenses, and it takes some time in Chile in order to transfer licenses because of paperwork, all the legal, not issues, but things around it. It will take place. Interest expenses revised up to NOK 300 million due to FX. It's still the same interest expenses in EUR terms, but up in NOK. Tax payables revised down to NOK 650 million. We had originally NOK 650, so just a minor adjustment. Quarter dividend has already visited on NOK 1.4 per share for this quarter. If you have followed our press releases, you see we have already announced when it is to be paid out. Then the overview of our financing. No changes since last time, so we will not go through it here. But I will just repeat that we are very satisfied with our financing.
Attractive terms, and a very healthy free or remaining drawing facility. Then, over to supply and demand. First, the supply for the third quarter. It was in line with our previous guidance. It's also in total very stable compared to our or the industry's third quarter numbers last year. Actually a little bit down in Europe percentage-wise, but still quite stable. In Americas, a little bit up. This is ex frozen storage from Chile. In addition to the increase in supply by 2.2%, you have to add up approximately 11,000 tonnes. Consequently, the increase in supply from Americas and more precisely Chile, was higher than the 6,000 tons number in this table. I think it's very important to bear that in mind in order to understand the market in Americas in the third quarter, which was really bad, as Alf-Helge has already commented on.
Reference prices or the prices in the quarter. Strong prices in Europe, also in EURO terms, up 5%. We saw a strong demand in Europe in the third quarter. In terms of America, it doesn't make any sense talking about Norwegian reference prices for Americas. In U.S. dollar terms, it was really poor. Unfortunately, prices for the Chilean salmon is actually further down so far in the fourth quarter, approximately $30 since then. I'm referring to the Urner Barry reference price. But as you can see from the table here, the difference between the Urner Barry price and HOG in box is quite close to 1: 1. Then you can do the rest of your math yourself. That being said, normally higher prices in Europe leads to higher prices for Americas.
We also think that the supply situation for Americas will be better next year. We also see that the retail stores has taken down the prices to the customers down in the third quarter quite substantially. We have the Lent season coming up at the beginning of the year, at this first quarter. In total, we hope we see the bottom now, but we don't know. There is no secret that this year has been a disappointing year for our operations in Americas. And I'm especially thinking of Chile. In terms of the Canadian salmon, a little bit up so far in the fourth quarter, but not much. Quite stable. Over time, those prices follow each other. Over to global volume by markets.
In total here, you can see it was consumed more than what we saw in the supply table because of, among other things, the storage inventory build-down in Chile. Very good demand in Europe, up the main market for Atlantic salmon, up 5% at attractive prices. And the prices so far in the fourth quarter is even more up. Things look good also for next year. In terms of Europe, we are satisfied. Russia still impacted negatively by the trading barriers. If we look to Americas, consumption is up as much as 12.5% in the U.S. market, but it's at very poor prices. It's very hard to talk about a good demand for the U.S. The fish is consumed, and normally that is also some kind of marketing. We know that from history in this industry. Brazil, great.
Bear in mind that they all have really been hit by the oil crisis and the FX fluctuations. Adjusted for that, we are impressed by the demand in Brazil. Asia, for China, stricter trading barriers have influenced the consumption and demand negatively, unfortunately. Japan is up this quarter. If you remember last quarter, it was down, and now the storages over there are at a sustainable level. We think that Japan will continue to be positive going forward. South Korea and Taiwan, which are very important markets for Marine Harvest, up as much as 24%. In total, we think European market and the demand is strong. It's also a good underlying demand in Asia and in Americas. We are facing challenges, which we hopefully see a light in the tunnel for next time we speak.
But once again, it has been a very disappointing year for our American operations price-wise, and we cannot say that the problems are over. We hope and we think, but we don't know. Over to industry supply outlook for next year, 2016. Quite stable. We haven't presented the 2017 figures, but as far as we can see, quite stable for 2017. Consequently, from a price point of view, it looks good. That part of the clearance looks good. In terms of demand, just to repeat myself, demand in Europe is strong. It's also a good underlying demand in Asia and w e are hoping for an improved demand in America. All in all, we are looking forward to next year. In terms of the fourth quarter supply numbers, they are more or less in line with what we presented last time.
They are not deviating much from the consensus, so I will not spend time on going into the details in this presentation. Then over to our own volume figures for next year. We have taken down the guidance for this year by 5,000 tonnes from 438,000 tonnes to 435,000 tonnes, 3,000 tonnes in Chile and 2,000 tonnes in Canada. For next year, we are increasing our volumes in Norway from 257 to 265. We are taking down our volume from 64 to 56 in Chile. Recall that we took down our smolt stockings in Chile this year, so some of this drop is resulted from that measure. The rest of it you will see in our 2017 figures. As far as we can see as of today, the volumes in Chile from Marine Harvest is around 50,000 tonnes. It's actually even more down.
And the P&L effect is, as you know, lagged, but the cash flow effect we will have quite immediately. This is a measure we have taken in order to meet the challenges we are facing in Chile and for the markets for the Chilean salmon. Canada, quite stable, from 40,000 tonnes to 42,000 tonnes. Scotland from 52,000 tonnes to 56,000 tonnes. Other units, which comprises of Ireland and Faroes, up from 12,000 tonnes to 21,000 tonnes. The Faroes accounts for 11,500 tonnes of the 21,000 tonnes number. There's no secret that we are very satisfied to start the harvest from the Faroes again. It's really an attractive area to run farming operations these days with the biology, but also in terms of the markets. The Faroes have some competitive advantages we do not have in the other farming regions.
And with that, I would like to say thank you and give the word to Alf-Helge again.
Thank you, Ivan. Very good. Then we will just take a look going forward. First of all, the market balance here is expected to remain tight going forward. We just looked at the supply numbers, that shouldn't come as a surprise. In terms of forward prices and what we see, NOK 44 per kilo for the next 12 months is the latest Nasdaq price. In Europe, where we have our obviously main supply with the Scottish and the Faroese and the Norwegian operation and where we're selling into the European market, consumer demand is certainly strong and robust. Asia as well, especially in the countries where we are working hard in Taiwan and in South Korea where we have our factories, growth is very good and positive.
In American, well, we do not expect a huge turnaround in Q4 based on what we see now and knowing that the salmon prices so far in this quarter has dropped. But on the other hand, as Ivan said here, at some point, this will turn around. It's no doubt that with the demand or the consumption in Brazil and with also working hard on with the new sales in the U.S. and also hopefully reduced and what we have seen from the supply side, reduced supply from Chile next year and not growth in Canada, we think that hopefully the momentum will turn in this marketplace. And also in terms of the financial support to very big players, it's tough to run an operation here in this environment, it's no doubt.
Then, back to the quarterly dividend we've mentioned several times here, but the board has based this decision on the future outlook and on what we see from the demand situation and the supply situation, and they have decided to increase it to NOK 1.4 per share. With that, I would like to open up for questions, and we have already two people. Marius first, I think. He was a little bit quicker than you, Kolbjørn. It's just seconds, but still.
Yeah. Marius Gaard, SpareBank this time. He has a question related to production costs in Norway. I guess some of your guidance for 2016 volumes is a reflection of the biological challenges you have in Norway this year. And you also comment that Feed costs are high and maybe on the way up again. Can you say how you see production costs in Norway going forward compared to this quarter?
Most likely, not knowing the development in the feed price 100%, but still knowing that there will be constraints probably on fish meal and fish oil. The biggest input factor here, which is into our farming operation, around 50%, is feed. Seeing that most likely increasing, we have fairly fixed price for Q4 and Q1, but after that, we are in the marketplace there. So, it's a, I don't see it going down, at least. I think the trend rather will be up even for next year. Do you agree, Ivan?
I agree.
Just a second. You soft guided on volumes in 2017. Can you say anything about the working capital in 2016? Is it going to be a lot flatter, maybe a little bit up?
We do not guide on the working capital in the long term, only one or maybe just a few months ahead. But they are obviously connected, so. You are a smart guy, so you don't need more.
Thank you.
Kolbj ørn .
Kolbj ørn Giskeødegård , Nordea Markets. Two questions. You mentioned that you would barely enter into new contracts because you are more or less sold out. Is that for Q4, or for which period do you refer to then? And the second one is, apart from the central Norway sea lice situation, Norway has been, as you also mentioned, better than last year. To what extent do you consider this to be skills from the industry, or is it just nature helping with more freshwater in the sea? Thanks.
Yeah. In terms of contracts, obviously, maybe I shouldn't have said it exactly like I said it, but for Q4, Q1, it's a, it's a- we obviously will take contracts if the price is high enough. But we are at a level in Q4 where we are in line, in the upper line with our contract policy. Obviously, we cannot take any more contracts for Q4. Depending on the customers, obviously, we can do it at good prices in Q1. And then your next question was around the sea lice situation, whether it is nature or management. Hopefully, it is a combination of both. But certainly, over time, we have seen good management because we have an operation in the southern part of Norway that was prone to lice earlier on that has run five years without any treatments at all.
We know if you are on the ball of this, it can be done. And we know that in Rogaland, the situation is good. In Hordaland, also fairly good. The same Sognefjorden. Part of the outer side of Sognefjorden is fairly challenging. Overall, good up to Nordmøre, really. And then it starts to become real issues. But that doesn't mean that you have to work hard further south. Also, in the northern part of Norway, very good results. Even in Nordland, that was a challenge last year. In our operations in Nordland, we have a lot of good control. We know that it can be handled by good management. The important part there is to take down the number of sea lice that can release eggs. The current regulation is 0.5. We have around 300 million fish on the coast of Norway.
Well, 300 million times 0.5 is 150. Let's assume that half of them are females, like in the rest of the populations in the world. It's 75 million females out there. They're releasing eggs into the water, and if it's 0.5, you know the number. If you can take that down, it's huge. We see that also from literature and in theory, that you have to meet someone out there. If you take the number down there, it's less likely you will meet the male and be successful. We should even have the R&D team to explain it. It's interesting methodology, certainly for growth, for future growth, we really need to take control of this problem. What is the alternative? You should ask. We can succeed. Back to your question, to answer it. In parts of the fjords, it's probably a combination.
In some areas, we certainly see that management can take control of this. You need coordination and discipline.
Bruce Diesen, Fearnley Securities. Due to the lice situation, there's been too many small fish and too many big fish. The exports to China and Korea look a bit weak in Q3. Does that mean that the inventories are higher than normal in Poland ahead of the Christmas season?
No, absolutely not. But I don't- I agree with you on the small fish side. I'm not so certain. I agree 100% with you that there is a lot more big fish.
Less big fish.
Yeah, less- Okay, sorry.
11% less to Asia, than more to...
No. No, no. At least for our operation in Poland, we are turning out fish. This is a fresh product, so it's moving. There's not a lot of inventory there, absolutely not. One moment.
Georg Liasjø, ABG Sundal Collier. Referring to your comments on having your own internal threshold limits when it comes to treating for sea lice. Should we see that in relation to the new 5% potential growth that we could see for next year in terms of capacity? Is that something that you will target 100% or are you still selectively doing the 5% growth?
In some areas, I think we can be fairly sure and apply the 5% growth. We have control, and we are certain. In other areas, we are far from there. It's so much work to do that, at this day and age, and we don't need to make that decision now, but I would not recommend any growth, absolutely not. In some areas, even with what has happened in the mid-Norway, Mowi might even take down production. In some areas, there's absolutely not room for any growth. It's crazy. So, but, this is a divided picture. We have absolutely areas where we can apply growth today.
Regarding Chile. Believe it or not, Chile, when we look at these numbers, you are one of the better performers in terms of margins. I guess it's fair to say that one needs to see both prices coming up and costs down. Looking at what you can do something about, which is costs, how much potential do you think there is for lowering costs for yourself and also for the industry? To be specific, could you return to 2014 levels in a short period of time, for instance?
You know, first of all, I disagree a little bit with you on your initial comment that you say that you can only do something about cost. I think, cost, so you can do a little bit about the price if you were calling it market place. But, okay. We can agree on disagreeing on that point. Back to cost. It takes time in this business. You know, the fish we harvest now has been in the ocean for 15 months, and I don't see, you can see partly a reduction in cost. We saw a little bit reduction in cost from Q2 to Q3 in our numbers. At the same time, the feed components will also have an effect in Chile. If the prices of fish meal and fish oil will also probably take that the other way around. I don't foresee any huge drop in cost going forward.
Finally, on the outlook for Chile. You have taken down your production by 20%, 25%, and you're probably an early adapter or early mover. Do you see the industry now being more inclined to do the same measures in terms of taking down volumes, or are they still hesitant?
At least what we see. I haven't seen the September smolt stocking numbers, but to be honest, the smolt stocking numbers up to August were about the same as they were the year before. On the other hand, we really hope that access to or our access to credit and financing will put a limit on this, because obviously, if you don't have money to buy fish feed, you cannot grow the industry. In my mind, it should have stopped by now. Surprisingly, it doesn't. You have to ask that to credit institutions and supplier of credit, what is their thinking around it, because certainly it cannot continue like this. But I can understand the dynamics of not taking losses, at some point in time, somebody has to take some losses there to make the situation better.
Done. It seems like we are all done. Thank you very much for coming and h ave a great day going.