Hello, and welcome to Nordic Aqua Partners' presentation of Q4 2023. To present today, we have myself, CEO Ragnar Joensen, and CFO Hjalti Hvítklett.
Hello.
If we start with the agenda for today, we will say some highlights and also inform about some new recruitments. We will go through the biology, project, market, financials, and then we will end with the outlook and summary. So for the highlights, we did conduct in mid-February a test harvest, where we took out some fish of 5 kg live weight, and we were very satisfied with the quality of this fish. And if we look into fish health and welfare, also very good results. For the largest batch, we have accumulated mortality of 1.6% from smolt, and there is still no sign of maturation. Operational and biological performance is very good for all batches.
In Q4, we did produce just under 500 tons. So the biomass in year-end was 1,079 tons, and production so far this year has also been very good, just under 600 ton for the first one and a half month. If we look at the largest fish now in the largest batch, that is 4.6 kg, and these fish are the fish that we are going to start harvest from in by the end of March. The project in phase one, stage one, is completed now.
As you will see, we have strengthened the team with, as we informed also a few months ago, a MD, Managing Director in China, and also just recently, a new CFO, that will start in a few months. Available liquidity is also good for going on. So, Andreas Thorud, as we announced, will start in April 1st as Managing Director in China. Very experienced from Chinese business life. And also Tom Johan Austrheim will start as CFO during the first half of this year. So we are pleased to have these two coming on board. So if we go to the biology, just to remind people, that we are having several batches in at the same time.
So of course, we took the first batch of eggs in March 2022, and since then, we have taken in new batches every three months. So, when we will have another batch in March, that will be batch number nine that we take in. And then in the small building, we have what we call RAS one, two, and three. That is start feeding up to smolt. And we have transferred the first seven batches down to start feeding and into the smolt unit. And now in March, we will transfer batch number eight down to start feeding.
Then in the large building, where we have the on growing, we have a lot of batches also now, and we will introduce the first batch in March into what is called RAS 9, which we also call the purging unit, the unit just before harvest, so-called waiting cage it would be in sea production. We can have a look at some of these batches. If we start with batch number 1, the growth curves that you can see is blue is actual, and the gray is budget. So the average weight of the largest batch is 3.3 kg now, while, as I said before, the biggest tank is 4.6 kg.
So, accumulated mortality from 150 gram is very low, 1.6%. So, it's going very well with the fish health situation. If we go to batch two, it's you could say, on budget on the growth and accumulated mortality is 1%, so also very strong performance, even though the fish, of course, is a little bit smaller. Batch 3, now we can see that we are moving a little bit ahead of budget, and the mortality is also very low . We have not seen any signs of maturation in the largest batch yet, and everything is scheduled for first harvest in March on 5.3 kg is the estimation of the fish, the biggest fish, in late March.
If we continue to batch four and five, they are also well ahead of expectations, and the mortality is also very low. If we had put in also numbers for six, seven, they would also show similar trends ahead of budget. If we go to the project, in this picture, you can see how the site looks at the moment. We have added some pavements since last pictures, so it looks nicer now, the facility. And what is left to do now is the greenery, so we will have grass and trees, and we will work with that from now on until April or so, then. That should also be completed... Just a brief look also at the processing.
The final installations or commissionings of the processing plant will be made during March. With this processing plant, we will have the capacity to harvest 8,000 tons. Once we take in stage three, we can also have 20,000 tons harvested at this same processing plant with some minor adjustments. Going to the next phase of construction, we have started with stage two, so that will take the production up to 8,000 tons. We have started, as you can see on the top picture on the right, with installation of the start feeding. You just see the RAS unit there.
And on the lower picture, you can also see that we have started the preparations for the big building in stage two, so that we should be ready to put in the first in-lay eggs, Q3 this year. Start feeding, and hatchery will be completed in April this year. Just to remind people about the what we are building, so you can see a picture now of how the facility will look when it is 20,000 tons in production. The blue is stage one, and then the dark gray, that is what we are constructing at the moment. So you might see that in this small building, there are three units, start feeding, parr and smolts, and then four larger units. Once these are completed, then we will have 8,000 tons in production per year.
And then, we will go further to the right-most part of the picture, where we'll take the production up to 20,000 tons. The timeline. The top line is stage one, and we start construction in 2021, and now we are going to be ready for the first harvest during last part of this current quarter. And then to stage two, we started with the construction in Q3 last year. We expect to put in eggs Q3 this year, and then harvest, first harvest from this batch, Q3 2026. When we go to stage three, we expect to be in position to start the construction in Q2 next year. And then we could put in the eggs in Q4, and then have the first harvest Q4 2027.
But the final decision and the timing needs to be taken during, we expect, the Q3 this year. So that is when we put the final timeline up for the phase 3 project. So if we go to the market, say a few words about the market, but first, just show some pictures from the test harvest that we had in February this month. So we took out some fish with average weight of 5 kg live weight, and we were very satisfied with the quality, and you can see the pictures also here. This is all from our own fish. We were very satisfied with color, fat content, taste, and also the shape of the fish. Very strong fish.
We expect to have the first harvest during the end of next month, and then we'll gradually increase the harvest of up to 350 tons per month from May. And then, what we call batch one, we expect that to be harvested out in June, and we should at least have an average weight of 5.3 kg live weight. And then we will continue from June and onwards with batch two and so onwards with batch three later. So we also wanted to show our new brand logo that we are going to introduce to the Chinese market, Nordic Pure Atlantic. And then, of course, most significant for the Chinese market is the Chinese part of the logo. Nuodi Zhengui.
My Chinese is not the best, but that's how we will introduce the brand name in China. And you can see some examples of how we will apply the logo. If we look also at how has the import of salmon been to the Chinese markets from all countries of origin, can start from 2015. It was down at around 50,000 tons, and then it was gradually built up before COVID-19, up to nearly 90,000 tons. And then, of course, restrictions and COVID-19 took the import down to again just over 50,000 tons, but especially during last year, it was increased significantly again to all-time high, just over 90,000 tons.
If we look at prices in the Chinese market, this is again all countries of origin. We can see that it has been flat at around 9 EUR, and then it was lifted up during COVID-19, and then it has come somewhat back down again to a lower level. But of course, this is following the Nasdaq prices in Norway also. Mainly strong in the first part of the year, and then a little bit weaker during the end of the year. Then CFO Hjalti will come in and say a few words about the financials. Please, Hjalti.
Thank you. First, we have CapEx and production cost breakdown. We see the annual production for 2024. We will start harvesting in March, so the annual production will be 3,400 tons. And then we have the stages to the right, with including stage two, takes us up to 8,000 tons, and when stage three is in full production, 20,000 tons. And the key figures are down. If we take next year, plus CapEx per kilo, and that's for the whole phase one, 4,000 tons, EUR 13.3, and the lease finance CapEx is just below 5, EUR 4.8. Then the cost, the farming cost for 2024, the direct farming cost is EUR 5.4.
Then we add harvest, takes up to EUR 5.8, COGS, G&A is EUR 0.9, and an EBIT cost of EUR 6.7. Then, we are preparing the company for expansion to 20,000 tons. This adds expansion costs to the company, preparing for 20,000 tons. So we are taking that out as a separate line on EUR 0.8, taking us to a full EBIT cost of EUR 7.5 next year. And this will then gradually come down to EUR 6.7 in- with 8,000 tons and down to EUR 5.5 when the 20,000 tons are in full production with current prices. Financial highlights. The performance is as expected, with as according to our plans and budget.
The biomass has now reached, and reached at the end of the year, 1,079 tons, with a value of EUR 9 million, and that's including the fair value adjustment. The estimate for all the CapExes are unchanged since last presentation. Farming technology, EUR 53 million, then we have leasehold improvements, EUR 3.5 million, and the processing plant, we estimate to be EUR 4.5 million. Then in November last year, we enhanced our liquidity through a private placement, securing us EUR 8.4 million to increase the financial buffer and to add flexibility. Profit and loss. Of course, if we compare, we see added cost from operating expenses as the production increases.
We have net financial expenses of EUR 2.2 million in the fourth quarter, and that is a part of it is EUR 0.9 million is from non-cash deviation from intercompany loan between the Norwegian entity and the Chinese entity. Financial position 2023 compared to 2022. Total assets almost doubled from EUR 52 million to EUR 102 million, and this is mainly from investment in the CapEx, property plant and equipment, and also assets under construction. And of course, the biological assets, the biomass has increased from below EUR 1 million to EUR 9 million, including the fair value adjustment.
Of course, we have recognized the leased assets, as the facility was partially handed over in end of last year, and these assets will then continue to increase as the facility will be handed over and as we are constructing phase two also. Cash flow. Same liquidity is according to our expectation. We had a net cash flow in the fourth quarter of EUR 1.9 million, and cash end of year 2023, and a total available liquidity on EUR 38 million. And then we so of course strengthened the liquidity to the EUR 8.4 million equity raise in the end of last year. And we still have one drawdown of the loan from Eksfin on EUR 10 million. Thank you, and back to you, Ragnar.
Yeah. Thank you, Hjalti. So just to sum up with the outlooks and, summaries. So if we, conclude, I mean, we said that, stage one is completed, and the fish farming facility is on time and a bit in line with the, with the budget that we set back in the days. The biology is good, strong performance, very, very good health of the fish. As we mentioned, and we saw some pictures, we had a test harvest in, February, of 5 kilo fish, good quality, and we expect the first, commercial harvest to be in, in late March. We just strengthened the team with, Managing Director in China, starting first of April, and then the CFO, who will start the first half of, 2024.
We have started with stage two, and we are good in the planning phase of stage three, and as I mentioned, we will take a final decision in Q3 this year on more specifics on timing. And then, we'd also like to mention that we are going to arrange a capital market day... and that will be held on site, Gaotang Island, close to Ningbo and Zhejiang Province, China, and that will be on 28th of May this year. So please, everyone, feel welcome to join us. So by this, we will conclude the presentation, and we can see also that there are already some questions. And maybe we should have a look at them and come back to some answers right away.
I can maybe read out the first question that's mainly for you, Hjalti, and then the question is: "When could we expect news on the financing of stage three? What are the chances of getting bank financing for this, or maybe a combination of both?
We are currently working on financing stage three, but of course, it's quite early compared to when we are starting stage three. So we will come back with this with the end of this year. But we are in communication with Chinese banks.
Thank you. Okay, we can continue to some of the other questions. The first one: "Can you elaborate a little more on quality of the fish you harvested in the beginning of the year? Any issues with fillet quality, cutting in the fish, color, taste, plus, plus, plus?" So I can just say a few words about this. I mean, I think you maybe saw also from the picture that we have. The color was good. It was around 28 in the SalmoFan, so that is considered very good color. Fat level is also. We have been measuring fat levels all the time, and they are in line or a little bit better maybe than the trend lines from similar testings from sea-based farms, so that is good also.
Taste has been fine, no issues with taste. I mean, we are producing in RAS units, so of course, we need a purging, but then, after having the fish purged, then the taste is very good. So, I think also the shape, I mean, they look very robust, our fish, so we are very pleased with that also. So far, very good, and if we look at, for example, during these months, sea-based farms in Norway, for example, they have quite many wounds, wound issues, and we have not seen any wounds in our fish there. Of course, we have a more stable temperature also, and these wound issues mainly come when you have colder temperatures.
So, hopefully we will be able to avoid that also in our farms. So it should be less degrading, at least, of quality, due to wounds. We can continue to the second question from the same person: "How long will you have to purge the fish? How much weight do you lose during purging?" We expect to have a steady state situation. We expect to have around 4-7 days of purging, and that is a little bit more than when you starve the fish for commercial harvest in the sea. So it's not significant.
If we say that, together with the harvest loss, we should be at between 80% and 82% of yield from live weight fish in the production. And then, the third question: "Can you comment on expected prices when you start harvesting the fish? Have you sold or will you sell volumes on contracts? Do you expect your prices to follow the Nasdaq price, or will prices be more stable through the year?" We can just say that, I mean, since we have not sold the test harvest was on a relatively small volume. So it's been for internal consumption mainly. But prices will be locked once on the week that we sell.
So it will be somehow related to Nasdaq, and the decision on exact volumes to be sold on contracts is not fixed yet. But of course, I mean, we also look forward for the startup of Andreas Thorud, who has been responsible for the Norwegian Seafood Council in China. So he has very strong relationships also in the Chinese markets that we are looking forward to him bringing into our company also. So we will build up a good relationship with the consumers. We are already in contact, and we have had visitors from many customers so far, but we have not locked any prices.
So please wait until we start selling fish in, in, maybe end of March, early, early April, then we can, we can, for the next, presentation, be more communicative on, on price issues. So, I will go to, see if there are any more questions. Yeah, there's one more question on: "Can you comment on expected net sales price when you start harvesting?" I think I already covered that one, and the third part is also on the same. Yeah. So, I guess we have, looked through some of the questions and comments that we have had in, and by this, I think we just say that we conclude the presentation. Thank you.
Thank you.