Good morning, everyone. Welcome to the Nordic Aqua Partners' presentation of the first quarter of 2025. Today, to present, we have from China Andreas Thorud, Managing Director of the company in China, CFO om Johan Austrheim from our Oslo office, and myself, Ragnar Joensen, I sit at the facility in Gaotang. The first quarter in 2025 has been a good quarter for the company. We are back. We have been out of sales during quarters Q3 and Q4 of 2024 due to issues we had with Jasmine. In the first quarter this year, we came back. We not only came back, we came back with very big fish to harvest and also a good price achievement and good production.
In the picture that you can see here in the front, we can see the facility that it was as it is in Stage 1 and also some construction from Stage 2. There are solar panels now on all the roof. We are producing from the solar panels nearly 5 MW into the energy consumption of very green energy. We start with highlights. Andreas will come in and talk about markets. I will come back to say about the operations and project. CFO Tom will take financials, and we end up with the summary. If we go to the highlights, like I mentioned in the introduction, we are back with harvesting very good fish. We have been harvesting 6.2 kilo head-on gutted, which is equivalent to 7.5 kilo live weight. Fantastic achievement, we think ourselves.
This has given us the courage that we have changed the production strategy now so that we say that in the future, we will base the production on 7 kilo live weight fish. Of course, there will be some adaptations. We have a lot of fish in front of us that we cannot grow all of them up to 7 kilo, so there will be a period before we enter into this new strategy. The price achievement and market was very good also in the quarter. We have been able to control Jasmine, and operations in general have also been very good. We have secured funding through a short-term credit facility, which also the CFO will come back on. First, I will give the word to Andreas on the market. Please appreciate.
Thank you, Ragnar. Yes, we resumed commercial sales in Q1. We had a very positive reception at the market reentry, which happened in the middle of February. We had a solid price achievement in the quarter. Our distribution of our Nordic PureAtlantic went to our established customers who are then working towards end channels such as food service being an important one, as well as into retail. Our superior share of our Atlantic salmon was of an impressive 99%. As Ragnar mentioned, we are very proud to be able to harvest in the quarter a 6.2 kilo head-on gutted salmon made in our fantastic facilities in Gaotang in China, which is then equivalent to 7.5 kilo live weight.
If you look at the graph that you have on the side here, we can see that in last year in the quarter two when we were in the market, we had an average weight around 4.5 kilos. We have now done quite an achievement in bringing that up to about 6 kilos. The average sales price rather in the quarter was EUR 9.03 per kilo. We have also benchmarked that sales price a bit to give a context. In Q2 2024, we had a price which was around the same level with a different market back then, but we were then at a 6% above the then what we called back then the Nasdaq index price, which is the export price out of Norway.
However, if we look at this quarter, and it's very important to highlight that most of our sales came in March, which the market was also then on a downward trend, but we were 24% above the average that Sitagri index during those weeks were in the market. We have benchmarked our prices week for week from mid-February to end of March also on the different weight classes. We are where we want to be, where we perhaps can do even better, but at least being able to bring it up to the 6.2 kilo hog size is obviously an advantage in a market like China. We were happy with the 100 tons or 200 tons we sold in the quarter. Leading up to the reentry, we had some thorough marketing testing.
We had consumers doing blind tests among different types of Atlantic salmon for freshness, for flavor, for texture, quality aspects of the salmon that we know the Chinese consumer care about. In addition, we did a small scale test through a local market up in Northeast China through wholesales in order to also see what the reception was. All these came back very good. That made us very confident and confirmed that we were ready for the reentry in the middle of February. We also then distributed in both food service and retail.
We still believe, and it is getting even more compelling, the value proposition we can bring by being a Norwegian company that has basically now producing this 6.2 kilo hog that we did in the quarter in the local market as something that is attractive, especially for the freshness, where we know that the consumers value freshness. It is something where we are different from other types of choices, Atlantic salmon that is imported. We know that is something our customers also appreciate. We also have a very strong food safety or safety profile in the sense that we have a controlled environment. We do not use any antibiotics and so on. That is also a very strong advantage. In addition to a sustainability profile, we are not obviously reliant on air freight of our salmon. We are also obviously having a lower CO2 footprint in that regard.
Perhaps even more importantly, our way of being agile, being able to adapt to the local market, create unique customer bonds, being in China for China, and also taking part of this growing mega trends of a Chinese consumer being more receptive, choosing more what is produced in China. They value this for safety and for quality. We think that is a trend which is going to continue to grow. We think that is also where we are very well positioned. In addition to the overall policy framework of China being more self-reliant and focused on food security, we can also play a role in that. Overall, we feel we have a compelling value position to grow our Nordic PureAtlantic even further in the local market in food service and retail. The Chinese market is now on a really big role.
We see that in Q1 this year, there was a whopping 33% year-on-year increase of imported Atlantic salmon, which is a new record. To some extent, the Chinese market is now starting to really begin in a way. We see the drivers being within food service, but also within retail, within the e-commerce landscape, as well as in smaller cities in China where the adoption of salmon, as well as the frequency, we believe are increasing. The growth of the Chinese market for the future looks very positive. We think we are in the right place at the right time to grow further in the market. Furthermore, the market is obviously many different origins want to have a part of this. We have Norway being a market leader, which has had a very strong year in China so far.
They actually in Q1 increased their market share to 77%. There was a little bit of a quite significant drop from Chile. You have all the origins competing in the Chinese market. They also see the opportunity in this dynamic and growing market at the moment. Lastly, we try to look at categorize the imports of salmon into what we call the European origin, which typically is then Norwegian, Faroe, and Scottish. These are usually origins which provide larger fish in China, 6+ , which has sort of been the most sought-after size for the Atlantic salmon against Chilean and Australian. What we see from this graph is that what also I had said earlier, that the prices went down, especially in March. That was also what we saw was the month where we had the most volumes into the market.
On the overall picture, we see that the preference for larger salmon, 6+ , will continue to grow. That is why we also, as Ragnar mentioned, revised our production strategy accordingly to accommodate the Chinese market in the best way possible. Thank you, Ragnar.
Thank you. We will say a few words also about the biological production. It's been very strong again now. I mean, we have continuously had very low mortalities in all batches, which can be shown also on the graph, ranging from up to 3.5% down to 1.7% for the first batches. The production, we can say that production has regained again now because when we were having Jasmine issues and not able to harvest in Q4, especially, we had to take the production down and took also down the biomass, as can be seen below. Now we are ramping up again. We have had a good production, just over 900 tons. Mainly it was in March that we really could start accelerating again after the initiatives that were taken against Jasmine from earlier times.
We went out of the quarter with 2,800 tons in biomass. As I mentioned, introductory-wise, we have changed our production strategy now that we will go for growing larger fish. We can see that it has been a challenge, believed to be a challenge in land-based farms to grow large fish. Main issues have been discussed to be lack of growth and also maturation. During the time that we were out with Jasmine from the market, we grew the fish to a bigger size. We could see that our systems worked very well to do that. Therefore, we have now decided to change the production strategy. During this second quarter, there will not be an increase. It will start gradually in Q3.
From Q4 and onwards, we will see more and more of the large fish that we also see now in Q1, that we will come back on those. To start with, we need to have all the fish that we have in front of us harvested before we really can implement the new strategy. As Andreas mentioned also, this is believed to be a benefit also for the market side. Of course, there has been quite much big fish in the market during the first quarter now. As we have seen in history, there have always been periods where there has been much higher large fish. During those periods, they are not being superiorly priced. In average, over time, it has shown that it will, and it will come again, we believe. We are also continuing to build out Stage 2.
The buildout of Stage 2 is going according to schedule. You can see some pictures here on how it is going. We are building four new RAS systems, four new halls. We put in the eggs last year in Q3. We are on schedule to start harvesting from these batches in Q3 next year. The development has been very good. As we have said over the past quarters, the total CapEx for Stage 2 is EUR 77 million. We mentioned also when we had the issues with Jasmine that around EUR 14 million of these EUR 77 million are related to improvement CapEx or you could say combating Jasmine CapEx. The timeline remains the same that we have had. Of course, Stage 1 is finished. We are building now on Stage 2 and first harvest, as I said, next year.
We also have a third stage. From Stage 1 until, we will be able to harvest 8,000 tons when they are both completed. Stage 3, we can take the production up to 20,000 tons. We will announce specifics about the Stage 3 during the second half this year. Please, Tom, we come now to the financial section.
Thank you, Ragnar . In what has been basically half a quarter of commercial harvesting and sales and with volumes ramping up through the second half of the quarter, particularly into February and March, we achieved sales revenue of EUR 2.3 million during the quarter. The released cost from stock was EUR 1.7 million, equivalent to EUR 5.99 per kilo. The operating EBITDA, which is EBITDA adjusted for fair value adjustments, came in marginally positive at EUR 75,000 and operating EBIT at EUR -1.4 million. The profit and loss, rather, for the period after tax was EUR 4.3 million almost, whereof EUR 2.3 million is unrealized currency loss in consolidating the Chinese entity into euro. Investments in predominantly Stage 2 during the quarter was EUR 4.9 million and biomass EUR 19.7 million, including EUR 2.2 million in fair value adjustments.
Cash at the end of quarter was EUR 10 million and total assets EUR 153 million, with an equity ratio of 53% or equivalent to EUR 81.6 million. As Andreas and Ragnar have mentioned, the harvest volume was 199 tons head-on gutted + 99 tons of the non-core markets. On the CapEx and funding side, the CapEx for Stage 2 remains at EUR 77 million as previously guided, whereof EUR 22 million has accrued at the end of Q1. On the funding side, we have signed this cooperation agreement with Bank of China and also Agricultural Bank of China expected to participate. This will refinance Stage 1 and it will finance Stage 2 and also later Stage 3, as well as there is a working capital facility included in the agreement.
The financing is subject to credit approval and we are working on the first part of that being working capital facility, Stage 1 and Stage 2. The process is on track, but with five weeks left of Q2, we think it's prudent to say that we expect credit approval to be completed in the second half. When the second half, we cannot say at this point in time, we are in constant dialogue with Bank of China and we are optimistic. As I said, the process is on track. We also think to be prudent, we also have established the short-term credit facility of EUR 13 million subsequent to the end of the quarter, that was just before the Easter, which will give us the necessary runway until credit from the long-term facility can be drawn. Thank you.
Thank you, Tom. Before we go to the summary and outlook, I just mentioned that it is possible to raise questions or comments in the dialogue box. Please write them as soon as possible because there is a delay of one to two minutes so we can read them before we end the presentation. To sum up, we are very happy with the quarter as we are resuming sales now after being out of the market for two quarters. We are also very well satisfied with the market re-entry and the price achievement that we met. Of course, as Andreas mentioned, we will work further to have even better price achievements going forward. We are dealt with Jasmine. We have harvested 200 tons on a very high average weight.
You could say that biology has been very good as it has been all the time. The large sizes that we have has given us the comfort to go up on production average size. I think that is a very high-quality brand also for the company being able to achieve that. We have, as Tom mentioned, secured funding, bridge funding. We have guided previously also that the harvest during 2025 should reach 3,000 tons. We took it somewhat down when we said that we were going to produce the larger fish because the fish being big, but not fully harvestable size at the new measures will not be harvested this year, but next year. If we look at the project development, Stage 2 is on schedule for the first harvest Q3 next year. With this, we would like to conclude the presentation.
I'd like to thank you very much for participating. Tom, you are responsible for following if any comments or questions arise.
Yeah, yes, Ragnar, thank you. We have a couple of questions already, so I'll start by reading those. This first one, maybe to you. I don't know who, Ragnar or Andreas . Anyway, the China premium for Norwegian fish is now negative. Have you experienced the same trend so far in Q2, particularly with the harvest of smaller fish again? Could you provide some color into how you think about farming costs in Q2 and second half compared to Q1?
Please, Andreas.
I can answer the first part of that question. I think we have now come into Q2 market, and it's correct as the person who posed the question that we've seen an unusual situation that came in Q1 in terms of the large volumes of six plus, which led to, in some cases, if you look at prices from Norway, that the 6+ was even below smaller sizes. We saw that in the Chinese market, there was also quite a lot of supply. When it comes to the Q2 development, I don't think it's appropriate to comment too much on that at this stage. Other than that, we are actively developing the market with our customers. As Ragnar said, we are also implementing our new production strategy, which over time will bring us up to this 7.5 live weight, sorry, the 7 kilo live weight.
I think in that process, we will obviously have some other wide variety of sizes. We are working with our customers to see how we can, in the best way, market these products and also get a premium when such is possible. We have to remember that towards the Chinese market, usually the smaller sizes, three to four, four to five, there has not much historically been that on Norwegian origin. That has been Chilean and Tasmanian origin mainly. We are sort of in a field of origins, which is gathered around those two also when it comes to the positioning at the moment. We are going to work hard to improve our positioning and make our value proposition even more compelling. I think it was on the cost there, Ragnar, perhaps you can comment a bit on that.
Yeah, I mean, the cost in farming is so that first you produce the fish, so you have a cost to stock, and that is very related to the volume that you are producing. The fish that we have been harvesting during Q1 has mainly been produced last half of last year when we did not have a high production. This year, we will ramp up and have some higher production numbers. Of course, during that period, we also took an adjustment on our cost on stock levels in Q4. Going forward, we expect that the production will be higher than it has been through the first quarter. Therefore, we expect costs to come down, but we are not giving any guidance on exact numbers on that. I will not comment on that.
Thank you. New question. Your production facility is situated in a hot climate region. How are you handling the warm water and how is this influencing production costs?
Of course, when we need to cool the system, it will affect the cost, but not as much as if we had to fly the fish into this market. There will be some extra kilowatts used. As we could see also, we have green energy now on the roof, and we also have windmills close by and a good solar park next to us. We are able to source much of the energy as green energy. Of course, there is a cost related to it. We expect that the cost of cooling is significant. I do not have the number right in front of me of the cost, but it is a significant cost that we have on cooling, of course.
Thank you. That is all questions we had in. It has been a couple of minutes, and now there are no more questions since we started the questions Q&A session, obviously. I do not know if you should bring it to a close. I'll leave that to you, Ragnar .
Yes, I mean, I would just thank you again for attending. If you have any questions, please, you are also welcome to take contact after the presentation. If you sent in some questions before we could answer them, since the delay is here, we will try to follow up on email to those questions. I would just thank you very much for attending. Thank you.
Thank you.