...Welcome to Nordic Aqua's presentation of second quarter. This presentation is a special presentation for us. This is the first time that we actually have had turnover in sales. We have been waiting for this moment since we started. There was a long time for planning, after that, construction, and then since we have built up biomass. I think we can say that everything has gone very well, very well according to plan. To present today, myself, Ragnar Joensen , I will start, and then we have with us also from China, our Managing Director, Andreas Thorud, and also our finance CFO, Tom Austad. So let's go through some highlights to start with. As I mentioned, this is the first time that we have had sales and turnover. We harvested well over 100 tons during this quarter.
Relatively big fish and a very good Superior share of 99%. Sales price just under EUR 9 per kilo. As we reported in July, we had an incident of geosmin, and this geosmin case has also continued into Q3. So we can see for us now that we will have lower turnover, lower sales, and harvesting through third and fourth quarter. As we have presented in most of our quarters so far, biology has been very strong. Good growth, low mortality, and thereby also very good fish health. We have available liquidity of just over EUR 10 million .
And when we look at the reduced harvest that we have, we can see that there will be less income, and therefore, we have plans for an equity financing of NOK 250 million, which will be raised during this year. And we have already good backing by core shareholders that have been primary insiders, covering around 40% of the shareholding. So, I'll take you through some operational data. Average farming cost has been just below guiding EUR 5.23 per kilo. And the biomass production has been just over 1,000 tons, and so the total biomass going out of the quarter is 2,400 tons.
We can say, I mean, during the second quarter, we have built up the production so that we have reached a steady state production of 4,000 tons now, and this will continue into Q3. As we said, this geosmin incident that we reported in July and also has continued further into this quarter means that we expect to have no harvest during Q3, and reduced harvest in Q4. We have seen also in China that there is in the market a preference for larger fish. And due to the good biology that we have seen also, including producing fish up to six kilo, we are considering now whether we should adjust our production plan to produce somewhat larger fish adapted for the Chinese market.
If we look at the batches, we have in the white lines, how the growth has actually been in each of the batches, and the orange one was how we expect it. Every production batch is just according to expectations. If you look at mortality, mortality for batch one, we have reported earlier, was just 1.9%, accumulated from 150 gram. Excellent performance. The same is the case for batch two and three. Since 150 grams, mortality has been as low as 1.4% and 1.2% in these batches. If we take the other batches to follow, it's similar picture, very low mortalities, very good fish health.
If we take this case that we have reported now on geosmin, we have identified the root cause of the problem, and we have taken initiatives to assure that we can continue to produce premium quality fish. And I can mention the initiatives that we have taken. So we have implemented protein skimmers into the production units. We have changed the operational protocol that we have for the biofilters, and it's mainly in the biofilters where the geosmin is arriving from. So we have also increased the ozonation. So all these three initiatives are to take down the pressure, the level of geosmin. Geosmin is in every RAS facility. It's just a matter of controlling it, and by these measures, we can control it.
If we had put fish, new fish into the production units today with implementing these initiatives, we believe that we have not entered into a situation with the geosmin that we did. We are there now. We need to bring the levels down, and it will take a little time. In the purging unit B, we have implemented some technology to take further the geosmin levels down. As we mentioned, the harvest plan will be adjusted, and we will take down the levels in Q3 and also Q4, and some of the biomass we will be able to transfer into beginning of twenty twenty-five. Of course, the liquidity will be affected, but that will, our CFO, come closer into later in the presentation.
If we look at the project, we had a grand opening during this quarter. A grand opening with Chinese officials and also executives from the management in Nordic Aqua. A great day in May, and we were very pleased to announce that we had built and produced fish and the facility according to plan. We have continued to build, and we still continue to build, so phase two is also on the way now. We have built the units for the small fish hatchery and also the start feeding. So that is ready now and being tested. The larger building next to our system building is also well on the way now. We have piled, and we have started very much on the concrete work also.
Project phase two is going according to plan. If we just sum up with the project plan, we started back in 2021 to build the facility. We started production in 2022. We started harvest second quarter this year. For the second phase, we started last year, last autumn, and we expect to put in the first eggs in Q3 this year. That means that we will start harvesting from phase two in 2026. We have also planned further to expand the project up to 20,000 tons, and we have said that we will set the exact timeline for that during Q4 this year. Now I'll give the word to Andreas, our Managing Director in China.
Thank you so much for that, Ragnar. I have the pleasure of talking about this huge milestone that the company achieved this year in quarter two, that Ragnar already mentioned, that we are doing commercial sales in the Chinese market. We started a few weeks out in April, and then we ramped up the harvesting and sales throughout the quarter. We saw in April a harvest of 43 metric tons, 134 in May, and also in June, we were up at 345. As you can see from the pricing, we had good average prices in April and May. This was also at a time where the global salmon market was experienced strong prices.
In June, we also saw some of the global pricing for salmon going down, which also affects the Chinese market. Overall, we saw sales of EUR 4.7 million with an average price per kilo of EUR 8.94. It's important to highlight that with the average rate we achieved, 4.5 kilo in HOG, we had a superior share of 99%. This is a strong achievement and also a testament to the quality that we delivered to the market. We developed customers. We have established distribution into both food service and retail sectors.
If you take a little bit of an overview, a bigger view of the Chinese market when it comes to imports of Atlantic salmon, we see that China is experiencing another strong year in terms of growth. If you look at the first half year, there is an almost 10% year-on-year growth in volume. So the Chinese market has basically picked up the trend that was there before COVID, and is now growing year on year. It clocked in at 43,000 metric tons for the whole fresh Atlantic salmon that we witnessed. We also look at a little bit the dynamics of the Chinese market briefly, because it tells a little bit about how this market is when it comes to country of origins.
We can see from just the breakdowns when you're looking at the different specs, the countries of origin in the local market, there is a lot of countries involved. You have Norwegian, you have Chilean, you have Tasmanian, you have Faroe Islands, you have Scottish, and so on and so forth. It's a market with quite a lot of competition. And it's also a market where we can see that the majority of the consumption is being done into the food service sector, around 80% or so are estimates on it. So it's quite a traditional market in that sense, that you have a very strong food service sector, whereas the retail sector, although growing, is not that high that you may see in other markets.
This kind of country origin setup is quite unique in an Asian context, where you usually see, and Norway has a very dominant position for fresh Atlantic salmon. Norway has for these if you look at the first half year this year has decreased their overall market share vis-à-vis during the COVID years. You see a little bit of normalization in terms of what was existing before twenty twenty, where Chile has taken now a bigger share of the market. Finally, on the macro setting of things, I just want to quickly touch upon a little bit the dynamics when it comes to.
If we group the country origins into two types, we have, what you call European, that's basically Norwegian, Faroese, and so on, and Scottish, and then we also have Chile and Australia, and there's a price gap there. And this speaks to a little bit also some of the dynamics we see when it comes to, the preference for large, fish in the Chinese market, particularly six plus in many cases, because of the food service nature. This is an, six plus is something Norway has a relatively strong, supply in, and it's a strong contributor to the market. Norway also have import duties of 7% on the, on the, on the products coming into the market, whereas Chile and Australia has, no import duties.
So the Norwegian prices are often skewed towards a six plus market, whereas Australian and Chile would often be more on the smaller sizes, four to five and five to six, and so on. So what are we gonna do in the market? I mean, being a new company, we are proud to be a Norwegian company based in China, producing a commercially scaled-up land-based Atlantic salmon farm. This is also for us, as in many cases, a year where we are now getting into things. We've done one quarter, we are developing the market, we are continuing to develop, looking at new channels.
However, we think with what we can offer to the market by taking a premium position is something that creates attention among the local players. Especially when it comes to the freshness story we can provide, the food safety aspect, which is important, and also such as sustainability. So we continue to develop within the important food service market, as well as when it comes to the retail and online market with our Nordic Pure Atlantic brand that we are now establishing. And just to briefly look at some of the events we have done. In quarter two, we had a launch event, and we have had some marketing activities towards the end users.
As well as we have garnered a lot of PR attention by national media in China, exactly because of the uniqueness of the products and the project that we are doing. So we are very excited to continue this development of establishing ourselves as a premium-positioned Atlantic salmon locally produced in China. Yes, I think we move on to the financial sum.
Thank you, Andreas. Right. So, what you heard is a quarter that saw production and harvesting sales ramping up through the second quarter to almost full capacity in June, where we had 70% of our sales approximately, and unfortunately, at a lower price that we saw in June. So that generated income, as has been mentioned, of EUR 4.7 million of the 523 tons that were sold in second quarter. By the way, a full P&L and balance sheet and cash flow and everything is in the appendix. We have in the presentation chosen to concentrate on some key figures.
The farming cost was EUR 523 per kilo, giving an EBITDA of nearly - EUR 1.5 million . Cash flow from investments in property, plant, and equipment and also right-of-use assets, which is the land and the building, was EUR 8.2 million . And we raised net EUR 6.1 million from financing with the present export finance arrangement we have with Eksfin and Rabobank. The biomass at the end of the quarter was EUR 16.8 million , including fair value adjustments of EUR 4.6 million . And then we have an initial recognition of deferred tax assets of EUR 1.1 million .
That gives an operating EBIT of - 1.5%, and a profit or loss for the period of almost -1.7%. The net cash flow was - EUR 2 million. The cash at the end of the period was approximately EUR 10.4 million, and that excludes retention accounts or security accounts, which is not available to us, and it excludes the undrawn portion of a facility with the Chinese bank. So we had an equity ratio of 58% of a balance of EUR 124 million.
Looking at the capital expense and the funding we have for stage one, which is the building on the area as you see closest to us here in the picture, the CapEx is approximately EUR 61 million in total, with the split that you see, whereof we have paid or incurred approximately EUR 54 million already. For stage two, which is the building you see behind the buildings, the CapEx is EUR 63 million, whereof we have incurred approximately EUR 16 million. Then we have related to the geosmin incident, which has been explained, we estimate that we will incur another EUR 2 million in CapEx related to the mitigating factors.
How will we fund all of this, and given the situation with the income side that Ragnar has explained? We are at an advanced stage with the discussions with a group of Chinese banks and also banks closer to home. I think there will be agreements on that quite shortly. We are planning an equity raise during second half of this year of approximately NOK 250 million to take account of the lost revenue and also the geosmin CapEx. We are very pleased that we see a strong support from key shareholders and primary insiders represented at board to participate in such an equity raise.
I think, Ragnar, that was short for me this time. I have a feeling there might be more next time, so, back to you.
Thank you. Just to sum up the quarter, I mean, this was the first time that we actually had fish and products to sell, a milestone for us. We continued with very strong biological production. We are up at full speed now on production during second quarter. We had this incident with geosmin, and we will adjust the harvest plan accordingly, and we can see if we look, of course, there will be changes in the harvest plan, but we don't see any changes in the production and the way it will produce the fish in 2025. Some fish might be turned over. Production will be as we expect, so maybe harvest will go a little bit up due to the transferred biomass.
And then, we are still on schedule with the phase two product or project, and as Tom just explained, we have planned for a NOK 250 million equity raise during second half. So this concludes our presentation, and we're open for any comments or questions, please. We can see that there are some questions, but we can also take questions from the room. Yes.
Yeah, we can see them here, but there's also questions in-
Oh. Question in the room?
Yes, Christian Rabe. When it comes to the biomass, you have now 2,432 tons. How is that impacted by the geosmin issues? Can it be some culling ahead, or how big biomass can you have in the system, given that you won't harvest in Q3 as well?
Yes, there will be. I mean, we will be able to produce as planned during the coming time, but we expect also there will be some culling, and that is included also in the funding needs that we have explained for. Because we cannot grow all that biomass and still have reduced harvest. So some culling, but to a certain degree, we can accommodate most of the growth in the facility.
Yeah, because how much biomass can you have standing in the system today?
I don't have the figure in my mind right now, but it is considerably higher than... It will be just over three thousand, between three thousand two hundred, three thousand six hundred tons, something like that, I expect.
Okay. And when it comes to financing for phase two, you say that you're in bank. Do I understand it correctly that the remaining 500 million NOK roughly is bank financing all of it, or do you expect equity for that as well?
I think we'll have Tom to answer your question on this one, please.
We expect, with this planned equity raise that we are describing here, we expect the rest to be covered by bank finance.
Okay. Thank you.
Thank you very much. Maybe we should have a look at the questions also from the audience on online. As we can see here, the first question is, it says, "First of all, congratulations on a very impressive project. Can you elaborate on the price achievement in Q2?" Andreas, could you maybe come up and say a few words about that?
Yes, I can. As was presented, we reached an average price of EUR 8.94 per kilo. We saw that there were some fluctuation in terms of month by month, then also given the nature of the global market, in that respect. We see that there are different ways you can look at this price achievement. You can benchmark it towards various indexes and so on, such as Nasdaq and whatever it may be.
We feel confident that with the product we are providing to the market is gonna be well received from the freshness, from the superior rate, the whole, all the values that basically Nordic Pure Atlantic stands for. And we see this as a process moving forward. And we will also look at seeing how can we grow the fish a bit bigger because that is something we see there is obviously a preference for a bigger fish in the local market. So we got started. We are in a peloton of sorts, of different types of country of origins, where we are established ourselves as a new newcomer, but an exciting newcomer with a high quality. Thank you.
Thank you. Then we can see another question. Would it require major additional CapEx changes to facility in order to grow larger sized fish? No, I mean, for us to grow a larger fish, we should not change anything with the facility. We have been producing fish of just over six kilo, and the production of that went very well. Of course, taking the step to produce fish on land has not been done in so big scale before by so many. I mean, we need to focus on if there are any risks, and then we will therefore grow the fish controlled up to a higher size.
But we have said that we are in the consideration of doing that, and that is bringing all these different risk elements into the equation, and then we think that we'll be able to go for a production of a larger fish, and then a final question: Your EBITDA cost net of FVA is lower EUR 10 per HOG, but you report a farming cost around EUR 5. How is the farming cost calculated? What is included, and then what is not? Should I take that?
Yeah, I can take it. It's in the farming cost. We account for all the farming that is put. So all the feed, all the energy, the people working directly with the fish is included in the farming cost. And farming cost is just before the fish is handed over to processing. So that is the number that we have calculated into the farming cost. So administration, of course, during a quarter like this one, where we have relatively reduced harvest since it is the start-up, the fixed costs are spread over quite few kilos. But on a run rate, full run rate, the part above the farming cost will get smaller and smaller.
And as we have said also previously in our presentations, we have rigged ourselves for a bigger company than we are now, administratively wise. So we are quite many people and, quite strong administration for only a four thousand tons production. We are rigged for eight thousand first, and partly also for the twenty thousand. So that is the explanation for the gap between the farming cost that we have and also the total cost. We have no more questions, here, but we can see also that there's one in the audience. There was a microphone, maybe.
Thank you very much. I have one question regarding you said that Nordic Aqua is well received in the Chinese market, and we are talking about the paradigm shift from sea-based to fish on land or land-based, as you said. Talking about this paradigm shift, you also mentioned freshness especially, but I would also focus on the food safety. What about Chinese legislation regarding food safety? Can you say something about that?
Yes, thank you for that question. It's a very good question because we know that if there's something that is a key concern in a market like China is food safety. So we are doing. We have a QC department just on the regulatory side of things. We are doing testing, and we are making sure that we are following all relevant types of standards when it comes to food safety-related aspects to our type of fish product. And this is also one of the areas where we continue to communicate to customers that we have a controlled environment. We have customers coming, and they're seeing it for themselves.
We feel that this is a strong selling point, if you will, as well, when it comes to our mission of establishing ourselves with our unique value proposition in the local market. So that's very much an important factor for us in our business development drive moving forward.
Thank you. I have another question as well, if it's possible, yeah? You can read today in Dagens Næringsliv about Atlantic Sapphire in Miami, in Florida. Can you shortly point out the success formula that you have made or are working with in China, in Ningbo? What is... You can read about lot of losses and new emissions now coming also in Florida. But what is really the great difference between you and Atlantic Sapphire? Can you tell me? You are both talking about you are the biggest in the world and that the first Norwegians with land-based. Please explain that a little. Can you?
I think I have to concentrate on what we are doing because I'm not fully updated exactly what goes on in Florida. But if I focus on what we have had as a plan to start with, it was to build a facility first that could accommodate the production that we anticipated and planned for. And we can see also from the production that we have had, that the production has gone very well. I mean, we have produced according to plan. We have had very low mortality. So I think if we look at the overall picture from the production side, everything has gone according to plan. And yeah, maybe we came a little bit late into the tackle, if you use the football analogy, with the salmon.
But if we had implemented, we believe that if we had implemented all these initiatives that are taken now, some months earlier, then we would not have this case. And now we need to let time reduce the levels that we are at until we can start harvesting again. So except from that, I think, the project has been doing very well. Okay, then it looks like the question part is also over. So just thank you all for attending the presentation. Thank you very much.