Good morning, everybody, welcome to Norcod's Q2 quarterly report webcast. My name is Christian Riber. I am CEO of Norcod, will be presenting part of our report. Together with me, I have my colleague and CFO, Stian Vollan-Hansen, who will be reporting on the financial numbers.
Good morning, everybody.
Please, also, we have a Q&A session at the end of the presentation. Please put in your questions in the chat. Next. Briefly, some of the highlights from the quarter. Our revenues are up by 6% despite harvesting a bit lower volume in the quarter. At the same time, we've cut our operational losses, and we have improved our EBIT margin for the first half of the year with over 33%. This shows that our production and our sales is going in the right direction. At the same time, we've had extremely high production costs in the quarter, mainly due to the main site being harvested in the quarter was Labukta with lower volumes. In general, we were harvesting lower volumes in the quarter.
As you can see, our volumes were 16% down compared to 2024 Q2. For the first half of 2025, our volumes have increased with almost 20%. We're looking into a cod market, which is continuing to have a very strong outlook. We are still receiving very strong demand from markets across the world, which also results in higher prices. We are in a mode right now where we are in planning and preparing for our growth plan in the future. Part of this has been done by securing two new sites already now, which will be put into operation in 2026. We have good time to prepare these sites. We have ensured both equipment, feed barges, pens and everything from ScaleAQ, and also new boats for these two new locations.
We have extended our juvenile capacity at our existing facility where we have done a new contract, where we are taking over the full facility and it gives us more flexibility at the same time with improved terms. Last but not least, we chose to harvest, pause our harvesting in the middle of Q2, when we finalized Labukta. We did this mainly based on seeing these positive market trends, and we assume that we can receive higher prices during the mid of Q3 and the Q3 when we start harvesting again. We wanted to achieve a higher average weight on our fish at sea. On operations, as I said, during the quarter, we harvested just over 1,500 tons from the two sites, Frosvika and Labukta, which was emptied during the quarter.
All biomass was sent to our own production facility, Kråkøy, and they harvested all the fish and sent to the market from there. Which is important to see is that despite having lower volumes, especially from Labukta than planned, we still maintained a acceptable biological result with a biological feed conversion rate at 1.14 and an economic feed ratio at 1.34. That's an acceptable result. Even as interesting is to look at that despite it was claimed that we had mature fish, we maintained an over 92% superior quality on the fish, which is important to think about. Outside Jamnungen, which is also in operation out on Frøya, we saw a bit of an increased mortality during June. We've had a very good and stable production at Jamnungen so far.
During June we have seen a little bit of lack of appetite and a little higher mortality than normally. We are of course monitoring this development closely. During the quarter, we also released over 1.2 million fish at three sites on Frøya and on Nesna, which will be the fish that we'll be harvesting in the future. Our biomass, current biomass at the moment is at a low stage as planned, but we will see an increase in the biomass from the fall and onwards, and we are on track to harvest the 8,000 tons this year as planned. As shortly explained, we paused the harvesting from mid of Q2 when we finalized Labukta. The two main reason was very positive development in market prices.
We could see that if we waited with the harvesting, we could achieve higher average prices on this fish. At the same time, we had more time to produce a larger fish in average. That time was also used at Kråkøy. While no harvesting, we've been freezing salmon at Kråkøy. Together with we've been upgrading and preparing the facility with a new gutting machine for cod. This puts us in a position to process even higher volumes of cod at Kråkøy. As important, we have worked on our growth plan, and a very important part of this is that we have aligned our future production plan all the way to 2029.
We more or less have even split of spring and fall releases to new and existing sites, which will give us a very good balance and help us having a very stable production 12 months a year, which also results in a more stable harvesting. This has of course resulted in a lower biomass at the moment due to a lower release this spring. From this fall already and onwards, we will see a sharp increase in that. As we can see here, despite the pausing our harvesting early in the quarter, we still harvested over a third of all farmed fish in Norway, farmed cod in Norway.
As we can also see, our biomass at sea at the moment is at the lowest stage in a long time. We will see a sharp increase on this from the fall and onwards. What we have a lot of focus on outside our daily operations is of course, planning and laying the foundation for our growth plan. Already from next year, we will see a big increase in our releases and sites in operation. That's why we have done quite a bit of planning on this over the quarter. On equipment and feed barges, we've made a new agreement with ScaleAQ, which will be supplying us two new concrete feed barges for the two new sites together with the pens and operations for the site.
We have used Salak for quite some time. They deliver very good equipment to our sites. We secured five new boats, both for existing and new sites. Boats will be purchased from Euro Industries and Promek, and will be delivered over the next two years. We have secured that as well. All in all, we can say that, for the first period of Havlandet when we, when we started our processing, we have tested out by quite a bit of equipment, both underwater feeding and different types of pens and feed barges and boats. We are at a stage now where you can say we are done testing.
We know what equipment works, we know what can secure us stable and good production, which will take our production up in volumes, give us stability and give us profits. For the next two sites that we have secured and will set out in 2026, it would be the same equipment as we have used earlier. As mentioned in the highlights, we have made a new agreement with our existing juveniles site on land. We've had a very, very good relationship and cooperation at this facility, and now in the new agreement, we've taken full control over this facility, and we can utilize it as we wish. This gives us an opportunity that we can choose and manage how much fish we put in a facility versus how big fish we grow.
This will of course give us much more flexibility on future releases, both on what size fish we put, but also what number of fish we choose to put at sea. This is a very positive agreement for Havlandet. At the same time, our commercial terms on this agreement has been approved from the existing. As I said, we have secured two new sites. We were granted the new site Snön, very close to our existing site, Frosvika. We are doing that cluster up north, which we're very happy about. We will be able to utilize same land base, and then we'll have a lot of collaboration between the two sites. Snön is a 3,600 ton MIV site and will go into operation during 2026.
We have leased another three six site, Selsøy, which is very close to Labukta and Bjørnvika in Nesna. We will grow that cluster further now with three full sites. We have that site for the next 4.5 years, so two full cycles, which is very positive. Again, there will be a lot of collaboration between Labukta, Bjørnvika and Selsøy in the future. I'll pass the work to Stian, who will talk a little bit about the financials.
Yes. I will take you through the key financial information from our Q2 report. We'll start off by having a look at our highlights and the key figures there. As Christian has been mentioning now, we have a low harvest volume in Q2 2025 due to our early harvest at the beginning of the year. We would like to focus on how the harvest in total, the first half year is actually 19% up year-over-year. We are continuing to scaling up our business. Of course, the production cost this quarter was extraordinary high due to harvesting of a poor cycle. We had the escape incident here and some other challenges which are driving the production cost at sea significantly up.
We had lost a lot of volume to distribute these costs on, so this makes the production cost at sea extraordinary high for this quarter. We expect to have this reduced already from Q3. The revenues now is lower than previous two quarters, but we're still up 39% in the first half 2025 compared to the first half in 2024. More favorable market prices are driving this, in addition to a net growth of volume. All the available funds we secured in Q1 is utilized for continued scale-up and growth in these sites. We had NOK 92 million in available credit and cash at hand by the end of the quarter, and we are using this now according to plan of scaling up our business. The biological assets are historically low at the moment.
As Christian has been explaining, this is a result of the adjusted and aligned future production plan in order to get the ideal balance between spring and fall releases in growing the fish up to the right size. This is important for us in order to secure the foundation for future growth and a stable harvest throughout the year. Already from Q3, we are expecting an increase of biological assets, both in terms of, in value and also in terms of tons at sea. We're not going to focus so much on the balance sheet development aside from this. There are mainly the biological assets that are driving the changes there. We have not made any significant investments during Q2 this year. All of the agreements we have made now will be effective from later on. I just proceed to the financial review.
This is kind of summarizing a lot of what I've been talking about the last 2 pages. It's very important to see that we are still driving improvement in terms of our financial performance. The EBIT margin is improved a little bit for Q2 compared to Q2 2024. Most importantly, we see a year-over-year improvement for the first half year in 2025 of 31%-33% compared to first half year 2024. Even though we had some challenges now this past quarter, we are seeing an improvement overall in our financial performance. Which is very important because there is, it is important for us to keep continuing improving step by step. Profit and loss.
The revenues were NOK 91 million this quarter based on a harvesting volume of 1,541 tons. It's a little bit up from Q2 2025. If we have a look at the revenue increase of NOK 5 million, this is actually quite good, thinking about how our harvesting volume was 16% lower than in Q2 2024. This is the better prices achieved. It's the effects from the marketing work we see at value now. As I said, the increase of the production cost is mainly explained by the effect from the early harvest, in addition to completing harvesting from a site where we had some challenges.
Of course, the challenges in escaping itself is creating some direct costs during the quarter, but we also lose a lot of volume, which is driving the production cost up. This is very temporarily. We expect to see a significant improvement already next quarter. Despite of this, we have a net loss for a period of NOK 52 million, down from NOK 57 million in Q2 2024. Of course, we like to remember that the EBIT margin is significantly improved, and this is something we are working on to continue with for each quarter going forward. Have a look at the balance sheet development. It is, as I mentioned, there hasn't been any significant investments during the quarter. The reduction in assets now are mainly driven because of the decrease in biological assets.
Of course, this is something we need to do now temporarily, so we can optimize the future growth cycles. Total equity is reduced from NOK 279 million in Q2 2024, down to NOK 211 million now in Q2 2025. The losses we are carrying here is reducing the equity, so we are looking forward to starting harvesting again now in a few weeks and hopefully generating smaller losses than in Q2. We will be able to strengthen equity in the future. Cash flows. We see a smaller improvement in cash flow from the operating activities. We were at minus NOK 71 million in Q2 2025 compared to minus NOK 92 million in Q2 2024. More favorable prices are affecting cash flows positively, even though we were harvesting reduced volumes this quarter compared to what we originally planned for.
If we have a look at the net cash flows in total for the period, it's actually quite close to zero. We have a net increase of NOK 1.3 million in total because of the cash flow we had from investing activities and the utilization of the overdraft facility. I'll hand the word over to Christian again for the market update.
Yes. And regarding the market, I think it's very clear that the cod market, as we see it at the moment, is in extremely strong place. You need to please switch slide. We're seeing increase on prices quarter by quarter, which we again saw during Q2. We are close to having a NOK 70 per kilo average on all fish, which is positive. We estimate to see prices probably closer to NOK 80 per kilo than 70, but the prices will range from NOK 70-NOK 80 per kilo in Q3 when we start harvesting again. We're looking at a market with very strong demand and stable high prices. That's positive for us. Our strategy is still the same.
We are developing new markets both in Asia and North America, where we are positioning our fish as a premium product. This is also a focus for the future, where we want to secure markets outside the regular cod markets, where we have a premium position and we get our premium price in these niche markets. Still, the European market is our biggest market, with Southern Europe driving the volumes and prices. We are seeing a very positive trend and a lot of opportunities, especially also in North America. We market our fish as SnowCod. We've previously explained the idea behind SnowCod, and we've had extremely positive feedback on the name and the brand, and we'll use this going forward also.
Again, as we see with our fish, the benefit of our fish is contracting the fish in shorter or longer periods. Of course, in the current market, it's in shorter periods, but our fish is very good for contracts for retail and food service, where we can deliver stability, high quality, and fixed prices in periods which is key for our clients. The outlook for the cod market remains the same. It's expected that we will see a decline in the wild cod quota, which, of course, is not bad for our market condition. At the same time, a lot of the clients that has been working with our fish over the years are increasing their demand on a regular basis.
We can very clearly see that the fish works for our clients, and they want more. Going forward, our priority right now is operations and to build the foundation for our future growth. It's a pretty significant growth we're looking into over 2026, 2027, and 2028. New sites will be built, a lot of fish will be released at sea, and we need everything to be prepared for that. Right now we are ahead of schedule, both with equipment and sites, which is very positive. The better time we have to prepare new sites, the better. Everything is in place for all 2026 sites and releases. Already now we've begun preparing the 2027 sites and releases. We will continue to assess our growth plan and scale-up plan according to the development in the market.
It can go quicker, it can go slower, depending on market and the development in the biology. We will always assess that in our regular basis. We of course, still have our biological challenges. We acknowledge that, but we are very, very confident in our operational. We have the best control we've ever had at our sites. We have very, very good procedures in place. As earlier mentioned, we're changing part of the equipment and nets on our sites to even strengthen our control. We are looking into a scale-up plan, which we feel is very robust and are ready for the long-term profitability of Norcod and cod farming in general. We will start the Q&A session.
You're very welcome to put questions into the Q&A, we will answer them best way possible. We will start here. We have an anonymous user who's asking, "How many juveniles will we stock in 2025?" So in this year. Already now we've released the 1.2 million, we'll be close to 3 million juveniles at sea for this year. Same anonymous user is asking, "Production cost went up to NOK 59.9 in Q2, an increase of 12%." How do you propose to deal with this? Well, I think Ian has explained this very well already. Our cost price for the quarter is very dependent on, is it the beginning of a site we are harvesting? Is it the end of a site we are harvesting?
Is that specific site good or bad? We've had challenges at Labukta, and we've had less volume, therefore, the higher production cost. When we start harvesting here in Q3, it will be from Jamnungen in Frøya, and we expect to see a significant decrease in cost price again. Same user is here asking again, "Decline in biomass. We've seen a decline in biomass from 7,000 tons to 3,700 in Q2. Revenue-generating capacity?" Yes, of course, we've also harvested more in the first half of the year compared to the original plan. We're still planning on and guiding on the 8,000 tons for the year, which was planned from the beginning.
Volume-wise, it's more or less the same, but an increase in sale prices will ensure us the revenue at the same level or maybe even higher. I guess it's the same guy who has a lot of questions, which is great. We have been asked here, "Have you considered cooperating with competitors in the industry?" I think our view is that we're not really competitors in the industry at the moment. We are both competitors and colleagues. We are three companies who has fish at sea at the moment. Of course, we are supporting each other and sharing a lot of information with each other on production, how we see challenges, equipment, and other things.
We have a very close collaboration in the industry as we all have one common goal, to make cod farming profitable and an industry for the future. It's being asked, as a lot of people are thinking about, "When do you forecast profitability? Will this be in Q4 this year?" We don't really have specific comments on that, but we are seeing an increase in sales prices and a decrease in production costs. It's going on the right trend. Thomas Holden Nielsen is asking, what is the value in terms of lost biomass? Do we have long-term client contracts or will we have an upside in increased demands? When we paused our production, we of course, had to foresee the existing contracts that we had. We finalized those and supplied the fish on that contract.
We are going into Q3, only with the new contracts, that will be delivered for once we start harvesting, I guess. We see an upside on the market price on that. Tore Tønseth is asking, do you expect your cod licenses to become generic agricultural licenses or as suggested by the Norwegian government? That's of course a very, very good question, Tor. The government has already put indications that they want to have non-generic agriculture licenses, so we can farm whatever species we wish. This is not something that we're very focusing on, but of course, that would give us both opportunities and challenges.
The challenge, as we have discussed over the years, is of course, once we show profitability and potentially go into a license regime as this, cod licenses will come at a price, but also at a value. So, we don't expect in the short term, but it's for sure the government has shown that this is something that's on their mind and they have plans for that in the future. Okay. We don't see any more questions for now. Therefore, myself and Stian will say thank you for joining our Q2 webcast, and we look forward to presenting next results.
Thank you.
Thank you.