Good morning, everybody, and welcome to our Q1 2023 presentation of Norcod. Today, the presenters will be our CFO, Arne Kristian Hoset, who will take us through our financial numbers, and it will be myself, Christian Riber, CEO of Norcod, where I'll give you a more operational update. The agenda for today, we'll go through some Q1 highlights firstly, and also some post-quarter events of 2023.
After that, we'll go through an operational update, and also some of our focuses for the future on our green visions and sustainability. After that, Arne Kristian will give you a financial update and go through some of our key numbers, and finally, we'll go through the outlook going forward. Some of the highlights through Q1 has been that we've had a revenue of NOK 125 million, which is a 51% increase compared to Q1 2022.
This has, of course, been driven by the accelerated harvest we've had in Q1, but in general, we've had an increase in our production. Second of all, we've had an operating loss of NOK 28 million compared to NOK 45 million in Q1 2022.
Also, we've had a positive cash flow through the quarter compared to a negative cash flow through 2022. We've harvested a significant volume of fish through Q1. We've harvested 3,362 tons, whole fish, whole round fish, which for us is a significant volume. It's, it showed a good increase year-over-year, and we expect to continue to see this increased volume.
We are happy with the volume for the quarter. Last but not least, we've also set up our second site, Jamnungen, in Frøya, where we've connected it with onshore power, which is important for our production.
After the quarter end, we've also done some significant improvements to our financial situation. First of all, we've had a capital raise of NOK 190 million, which was a big success for us. We had a target of NOK 175 million, but due to significant interest in our capital increase, we raised NOK 190 million. Second of all, we've also done some divestment in part of our assets, where we sold a part of our ownership in Havlandet Norcod back to Havlandet, and raised NOK 75 million, and Arne Kristian will come into that later.
Equally important, we've had our shareholder loan. We've done a restructuring where we are converting part of that into equity. Last but not least, we have extended our overdraft facility with the DNB, our main bank, so it runs till the fall of 2024. On a more operational level, we've also gotten our GLOBALG.A.P. recertified.
It's a very important milestone for us because it shows the sustainability in our production, but also how everything is done correctly internally. Last but not least, we have initiated our first cycle at our new site, Labukta, close to Nesna. On the operational side of things, Q1 has been a very challenging quarter for us. We were on track to an interesting quarter where we've had a stable harvesting, and we will harvest all the way till July.
That was the initial plan. Due to some maturation in part of our larger fish, the Directorate of Fisheries demanded that we harvested our fish on an accelerated harvested plan. It's has of course, been challenging for us. We've had several harvesting facilities in operation at the same time.
We've had several wellboats transporting our fish because of this acceleration. In that regards, it's actually been a success for us that we've managed to take out all our fish, get everything harvested, and get everything sold to the end user.
All our fish has gone to the market. That's positive. Of course, the negative effect, by not having the ability to execute our plan is that we've, of course, had lower volumes due to harvesting the fish quicker, but equally as important, the whole market plan set up where we had 85% of our fish sold on contracts, got changed as we had to harvest the fish on a much accelerated plan. Therefore, the long-term contracts we had have, of course, been shortened, but we've had very positive feedback from our clients, understanding the situation, so that's been a positive reaction from the market. Of course, we've taken this maturation on a very, very serious note.
We've implemented several initiatives to reduce the risk and have a much lower risk than we had this season. Amongst others, we've implemented a completely new lighting machine with new lights, which we have big beliefs will lower the maturation level. It's important to say that the lighting, in general, in agriculture will not eliminate maturation, but it can extend the maturation, so it will occur after the fish has been harvested.
That's the whole goal with the lighting machine. Also, we've been working intensively on having the ability to gender split our fish, which we have now accomplished. On a 100 g cod, we can now put it through a scan and see the gender of the fish, and that way split it into male and female. This will, of course, eliminate the biological risk, but that being said, the fish can still go into maturation. As there won't be males and females on the same sites, it has taken out the biological risk. Last but not least, a very other important measure is that we've changed the way we are harvesting our fish in the next couple of cycles.
We'll take out the larger fish from each pen first, to lower the biological risk, and we'll do that on all the pens at the sites and do that in a continuous way. This will help lower the risk as well. We've spent a lot of time in assessing the situation, and we've taken some strong measurements to reduce this risk.
We, of course, continue to moderate this situation, and a lot of very skilled people, scientists and companies are working on doing more research on especially, maturation, gonad development, but also on escapes. We continue to learn more and more.
As mentioned earlier, we've also connected our second site, Jamnungen, to onshore power. That's also a very important goal for us with our sites. We have hybrid feed barges and electric boats on our sites, and by connecting them to onshore power, we can fully utilize this, lowering our diesel consumption significantly.
So that's very positive for us. It's also in plans that our new lab outdoor facility will be connected to onshore power. Next slide, please, Kristian. Leading into our green vision, as we say, for a blue future, the sustainability part of our production is of the highest focus. We have our CSO, Hilde Storhaug, continuously working on how we can optimize and make our production even more sustainable.
Some of the key highlights for us is, of course, that all the feed we use in our production is from certified ingredients. That's very important. The feed in itself is a very big component of our CO2 emissions. It's partly 75% of our CO2 emissions. What we can see compared to salmon feed, we have about a 25% lower carbon footprint.
That's why we're saying cod farming in general can be extremely sustainable. Also, a very important component is that we're using today between 90% and 92% of our fish we're using today for human consumption. In general, the HOG, so the head and gutter product in itself, is 80%-82%, and the liver is a minimum of 10%.
That's why we say we use a minimum of about 90% for human consumption. Going forward, we're looking to increase this percentage to up to 98%, as once we start filleting fish in Norway, we can also utilize the remaining insides of the fish and make collagen and protein production. That's the future for our production.
Also, we're looking to how we can increase the survival rate of our fish at the sea phase. One of our main components for mortality is the intestines and how they affect the fish. We have some very interesting scientific investigations going on, where we see some good possibilities to lower our mortality even further.
Also, we have some very key issues that we call that we're devoted to. It's our people, it's our fish, it's the nature, and of course, it's innovation, and also importantly, profit in the company. Those are the key points that we're focusing on in the future. Kristian?
Hello, everyone. My name is Arne Kristian Hoset. I am the new CFO in Norcod. I will present the key financials for you today. During the quarter, total harvest volume ended at 3,362 tons, whole fish equivalent, due to the accelerated harvesting imposed by the Norwegian Directorate of Fisheries early in the quarter.
This is the highest quarterly harvest volume in the company's history and was enabled thanks to a great effort from our employees and business partners. Total biomass at sea ended at 3,784 tons at the end of the quarter. The high harvest volume has also resulted in all-time high quarterly revenues, and revenues ended on NOK 125 million in the first quarter.
We are quite focused on our credit and cash management activities nowadays, and we will continue to have a tight focus on this in the coming quarters. Available credit ended on NOK 3 million, and the cash at hand ended on NOK 3 million, which means that we had NOK 6 million in available funds at the end of the quarter.
That being said, we have initiated several countermeasures, as Christian mentioned, in the introduction of the presentation. We have initiated several countermeasures to improve both the liquidity situation and our cash after the end of the quarter, and I will come back to that on the next page. The asset side of our balance sheet mainly consists of equipment used in our production and biomass at sea.
Our biomass at sea has, due to the accelerated harvesting, declined during the quarter, as approximately 75% of Mausund and Frøsvika was harvested during the quarter. This has also impacted our book equity, and as already pointed out, after the quarter, we have initiated several measures to improve the equity situation, the payment structure of our financial liabilities, and to improve our liquidity situation.
Firstly, we received NOK 190 million in the gross proceeds in a private placement in April. Secondly, we extended our overdraft facility with our own bank, DNB, with one year in May. Moreover, we divested assets with a book value of NOK 75 million with a corresponding amount converted to cash during the second and third quarter.
Lastly, we have reached an agreement with our main shareholder, Artha, to convert most of our debt to Artha to equity. This one is subject to approval by the ordinary general meeting on June 12. Based on current shareholder base, we find it highly likely that this restructuring will materialize, which will result in even more improved equity and reduced financial liabilities, improving the capital situation for the company significantly.
In total, for the first quarter, operating revenues ended on NOK 125 million, up from NOK 83 million in Q1 2022. Due to the accelerated harvesting, wellboat and harvesting services were purchased on spot contracts, hence, our operating expenses increased significantly compared to previous quarters. Operating loss before fair value adjustments ended on NOK 88 million, up from NOK 44 million in Q1 2022.
Operating loss after fair value adjustments ended on NOK 28 million, down from NOK 45 million in Q1 2022. Net financial items ended on minus NOK 13 million. The increase from Q1 2022 is mainly explained by increased interest expenses. Net loss for the period ended on NOK 43 million, down from NOK 46 million in Q1 2022. I'm not going to comment too much on the balance sheet.
Main components are our biomass at sea and our book equity that has been impacted by the accelerated harvesting during the quarter, and also our financial liabilities. In that respect, I would like to recall the initiatives on capital management that has been made during the second quarter. A few comments on the cash flow. Cash flow from operations ended on NOK 9 million, up from minus NOK 11 million in Q1 2022. That is mainly due to tight cash management during the quarter.
Cash flow from investing activities ended on minus NOK 7 million, up from minus NOK 3 million in Q1 2022, due to some more leasing equipment, installed. Cash flow from financing activities ended at NOK zero, mainly due to some cash receipts from our overdraft facility. In total, net cash flows ended on approximately NOK +1 million.
Looking ahead, as Arne Christian alluded to, we've done a lot of financial measurements to ensure that we have a financial strong base to execute our production. This puts us now in a situation going forward, where we can have a full focus on our production and our biological performance, which there's been initiated a lot of new measurements in our production, which we look forward to see the benefits from.
Again, the quarter has been very occupied by this accelerated harvesting plan. All through, we've had a very, very good dialogue with the Directorate of Fisheries. As it's also been clearly stated, we haven't broken any rules or regulations. We're very, very tightly regulated and have applied to all regulations.
Based on a, on a subject, subjective, decision from the Directorate of Fisheries, we were asked to do this accelerated harvesting. Going forward, our biggest focus will be on biology, and especially this maturation. As earlier mentioned, we've taken these different counter measurements to control it on a much higher level and have a lower biological risk.
Furthermore, together with our partners, we are also working on in the future, having access to a sterile cod. On the short term, we have the lighting regimes and this changed harvesting regime we've implemented. In the middle term, we're looking to do this gender split for new releases, where we'll have all male or all female locations.
On a future longer scale, we're looking to have this sterile cod, which will, of course, solve all issues of maturation. Also, working with a sterile cod will give us option to harvest in new areas where we can't harvest today.
Also, we are still, as we always are, looking to strengthen our value chain through M&As. It's important for us to have a strong value chain as possible, and we still see areas where we can improve this. In the end, we've just initiated a new cycle on our new location, Labukta in Nesna. We very much look forward to looking at the development here.
From generation to generation, we see increased improvement in our biology, stronger growth, lower mortality, and that's the development we expect to see on a continuous basis. That was the conclusion of our presentation. If there is any questions, please post in the comments in the chat, and we will reply to them.
There's a question here from an anonymous guy asking about, "Can we comment on the expected harvest volumes in Q2 and H2 of 2023?" Regarding Q2, we already know now because we have finalized our harvesting in this cycle. It was finalized in the beginning of May, so we already have those numbers, which will be posted on a later stage.
For the second half of 2023, we expect to start harvesting in the beginning of Q4. That's gonna be when we start the second cycle. The third cycle. Another anonymous are asking: How many fry will we transfer to sea this year? Well, for now, we've already had fry on growth facilities on land.
The first fry has already been transferred to the sea phase at Labukta. We will fill that site with about 1.5 million fry. Also during June, July, we will transfer about 800,000 fry to our site, Mausund. In the fall, we will transfer about 1.5 million fry to our site, Frøsvika. That will be the releases for 2023.
We have Robert over here from Fiskeribladet. He's writing: From what we understand from the Directorate of Fisheries, bad weather postponed some of the work of removing and checking the nets of Frøsvika, and other sites. He wants to ask, "Does Frøsvika have net pens been removed and checked? What about other sites that have been harvested?"
All pens from both Frøsvika and Mausund has been removed from sea and are awaiting inspection on land from the Directorate of Fisheries. As Robert alludes to, it's been very strong winds and bad weather in the fry area where they'll be inspected. As soon as the weather allows, they will be inspected, and we are hoping to have a conclusion by the end of June.
Martin Colon is asking: What is the contract share for the harvest planned in the second half? Are contract prices higher or lower than last year? In general, we've seen a positive development in our sales prices on contracts. Challenge has, of course, been with this accelerated harvest, that part of our fish or a larger part of our fish has gone into the spot market, which is not optimal for farmed cod.
The whole benefit of farmed cod is being able to plan and give long-term contracts to especially supermarkets, but also high-end food service. And that's where we see the value, especially on farmed cod. Contracts for the new cycle, we won't start doing till after summer.
We cannot comment on price development yet, but we see extremely good demand from the market, especially from all our clients having used Norcod over the last couple of cycles. Market situation looks very positive. At the same time, we can also allude to that, of course, there's been a significant decrease in the wild cod quota, and this development is expected to see in the future as well.
There's very, very good demands from the market, and we expect to see this continuously. A little bit like salmon, we also expect that the longer we have our fish in the market, the more consumers get used to our fish and grows fond of our fish.
This demand will continuously increase, and therefore, we also expect to see the price increase continuously. Another anonymous guy is asking about harvesting goals in 2025 is still as previously mentioned? As we mentioned in our Q4 presentation, we are doing a slower increase in our production, so we will see productions from 10,000-15,000 tons in the next two cycles, and then we'll see a ramp up being executed in 2025 for harvesting in 2027.
That's the plan. Another anonymous guy is writing: Another cod farmer has explained low achieved sales prices with unsuccessful market awareness of farm cod. Do you share this concern? If so, how do you work to deal with this?
I think, opposite to Statt Torsk, who is the other cod farmer that's being alluded to here, we are seeing a very, very positive market situation. For us, the key is to have as much of our fish on contract, which we've had previously, and where we see once the fish is on contract, regardless of being in or out of wild cod season, we have the same stable, high prices, which is the key for us.
We are very positive about the market situation. We have a lot of new big markets, both in Asia and North America, opening up, being very, very interested in our fish. We are very positive and expect to see a continuous increase price for our farm fish.
I think that will conclude the questions for today. Thank you very much for joining our Q1 webcast. If you have any further questions, both Arne Kristian Hoset and myself is always available on email or phone. Contact us if there's any further questions. Thank you!