Good morning, everyone. Welcome to Nordic Aqua's Q3 presentation. Presenting the company today, here from China, myself, Ragnar Joensen, and our MD in China, Andreas Thorud, and from Oslo, our CFO, Tom Austrheim. We will present to you our quarter now. We will come back into the details, but before we go into details of this quarter, we can just mention some, set this into a perspective. What we can see now is that we have lifted us in Q3 from where we have been in 2025, and we are on our way to go to where we are going to next year. I will just start by adding some numbers into the presentation from this perspective.
If we look at the top line of the harvest volume, we can see that we are getting at 5,700, 6,000 tons now this year, coming from 2,000 tons last year, and then going into next year with more full production of Stage 2, so that we can come up to 8,000 tons. If we go to the next one, harvest weights, last year, we came from 3.9 kg HOG weight up to 4.4 kg now, and moving into next year, Q2, with an average harvest weight of 5.2 kg HOG weight.
For the EBIT costs, we are also moving in the right direction. We are coming from last year, EUR 7.5, now EUR 7.3, and going into EUR 6.8. In many ways, we can say that we are on a goal to get where we want to go, and this quarter is getting us quite much closer to our end goal.
Okay, so this was just a little bit of the perspective first. If we go to the agenda, we start with some highlights, we go to operations, market, project, financials, and then a summary in the end. Please also remember to, if you have any questions during the presentation, write them in, and then we can read them up and take them by the end of the presentation. First of all, I will go through the highlights. The biomass production is good, over 2,000 tons. We are at 5,600 tons in total now of biomass, at an okay cost also. Harvest, record for us, 1,800. Once we are in the 8,000 tons mode, then we will have 2,000. We are also getting closer and closer to where we want to be on that one.
Sales price, EUR 6.3 per kg, but we can see a big difference also between the bigger fish and the smaller fish. The smaller fish, lower price, and the bigger fish, EUR 7.6 per kg. That is significantly better than our average price. Farming costs is coming down or being stable, on the way also to where we want to be next year. Operating EBIT, to say slightly negative for the quarter. Looking forward for the new projects, we also are in engineering phase for Stage 3, where we can take the production further up to 20,000 tons. We can see also that there are good movements still in the Chinese market for salmon, so increasing volumes. If we go into some of the operational figures, we can see also that the good fish health and growth is still the same for us.
We can say that we have fully reached the potential now of Stage 1 and Stage 2 together. The harvest should just follow, and we will start this from next quarter to go up to the level where we want to be on harvest. I think the biomass is quite high, 5,600 tons, and cost is fairly stable on EUR 5.59 per kg live weight. We have before also sometimes summed up what have we achieved so far, and the top one of these illustrations shows how the KPIs have been from the start until now. We have produced 16,000 tons at the facility now. Mortality around 5%. Harvest, 7,000 tons. If we look at how much of the harvested volumes are big fish, we could call, over 5 kg. It is aggregated to 33% of the fish has had that size.
If we then look at the average harvest weight, 4.6 kg HOG in average, and superior rate of 95%. Below, we can see the green one, that is where do we think we are going next year? If we look at the production live weight, 9,600 tons. So a significant year compared with 6,300 for many years. Same mortality we expect, harvest volume of 8,000 tons. Then we come to the share of big fish that we are going to produce next year. We are lifting this number from 33, aggregated so far, up to 60%. Average HOG weight, 5.2 kg, and superior of 95%. The expectations here is that we will have much more of the well-paying big fish for the year to come.
You could see in the highlights that these fish have a premium relative to average price of around 20% this quarter. This will vary, but that is the premium we would have had on all the 60% if we were looking at next year. So, significant improvement we are aiming for next year. I will now give the word to our Managing Director in China, Andreas Thorud. Please.
Thank you for that, Ragnar. I think what the achievements showing Q3 gives us a lot of confidence that we are delivering on our targets. We have a harvest of 1,838 tons. That is a new record, and it is just showing that our phase I and phase II is in full operations. The average weight is around 4.4 kg HOG, which then gives us also a superior share of 95%. If you look at our average harvest weight, we are on par now with the average in Norway, and that is also a strong achievement given our land-based operations here in China. The average superior sales price came in at EUR 6.29 per kg. We had some impact in Q3 still by the softening of the spot prices.
But we see now, looking forward, that the estimates are in our favor in terms of a more tighter market later in the year potentially, and also into next year. The sales price for our size lots came in at EUR 7.60 per kg, which also adds a premium to the Sitagri index, around 7% this time. We keep expanding and emphasizing our presence in the market. We are continuously participating at various trade events and other forums where we can talk about our operations, connect with customers, and also share our future plans. We were in Singapore in the quarter, and we had participation at the panel there on RAS in China. We were at the Shanghai International Fisheries Trade Show with a large booth, meeting customers and new leads, as well as participating at the 9th Global Salmon Industry Development Summit in Shanghai and gave a speech there.
So our presence and awareness in the market, particularly in China, is growing, and we also feel that from the recognition and feedback we get from the customers. Our product, the Nordic PureAtlantic, has some key features. We have talked about this many times before, but we keep on emphasizing them. We have a superior freshness compared to air-freighted fresh salmon coming into China. That way of doing Atlantic salmon farming like we do with the RAS technology also gives us a lot of control that translates into a lot of safety in terms of the product. That's another key feature in the Chinese market. We are able to farm our salmon without any use of antibiotics. We don't use any type of medicines. We have a very low mortality rate, and we also got even last year, as we talked about, this raised without antibiotics certificate.
And these are also traits and quality parameters for the product that the customers and also market pay attention to. We also focus on sustainability. We are not bound by any very minimal CO2 emissions in terms of transport, for instance. And also agility, being in the Chinese market, connecting down in the value chain, building strategic partnerships, in addition to not being disturbed by a global trade environment when it comes to uncertainties with regard to tariffs and so on. So being present locally in the Chinese market, serving this market as a key market, we see as a good benefit in these times. And then we are then targeting our food service channels with the larger fish and into retail with some of our smaller fish. We are strategically located just near Shanghai.
We can serve a huge consumer base within around five hours, and also a wider Chinese market, given the north up to Beijing and also down to Guangzhou. And we really feel that this location is a very good starting point, also from a geographical point of view. Not only being in this market, which is growing and has a growing appetite for the Chinese for salmon, but just by being where we are, we see as a benefit. Then if you look at the market itself, China has had a fantastic growth these last years, especially since after the COVID times. Back in 2023, Alibaba thought it could be 210,000 tons in 2030. We are almost there. I think we will come this year. So far, the imports of whole fresh Atlantic salmon has been 131,000 tons. That is as of end of September.
China has grown to be the second-largest market of Atlantic salmon worldwide, and also just in Q3 itself, with an increase of 19%. The market has still strong momentum in terms of growth, and there is still lots of potential to explore here for the Atlantic salmon. Norway has taken a great market share these last years. Some of that has to do with what we have seen since 2025, 2026, with the lower global pricing, and the attractiveness of Norwegian salmon has grown also in the Chinese market. Everything else equal, Norway is often chosen given its strong brand recognition. It has been now at 71% so far in 2026, which is very strong performance. The market as itself, the top market is 32%, which is another strong year in China. On pricing, we are looking at historical imports.
We can see that it is still below the trend line of EUR 10 per kilo on the import side. However, we think that coming into next year, this will return more to an average. We are, as Ragnar said, prepared here with a larger salmon and full phase one, phase two in operation to serve that market, and also make it a profitable business for us here in Nordic Aqua in China. Thank you.
Yeah, thanks, Andreas. We will continue going to the project. We just recently finalized a double-up, you could say, of our production capacity. On the picture, you can see here, you can see Stage 1 on the top picture on the right and Stage 2 on the left, Stage 1 on the right. We can see the solar panels are already installed in Stage 1, but not yet in Stage 2. We finished on time and also below cost, 16% under cost. We are taking that fully into operations now. We want to continue to construct also. Having finished Stage 1 and Stage 2, we are also designing now Stage 3, where we want to take the production up to 20,000 tons, so adding another 12,000 tons to the production.
We are designing this, and we will be ready to start up construction during next year, depending on a final investment decision. I will continue by giving over to Tom Austrheim on this.
Thank you, Ragnar. Our revenue for the third quarter came in at EUR 11.3 million, reflecting an average selling price of EUR 6.29 per kg superior, and a healthy uplift for 5+ kg SUP to 20% up to EUR 7.6 per kg. Our farming cost was EUR 11.7 million, corresponding to EUR 6.36 per kg. We had a positive fair value adjustment. The operating EBIT was EUR -2.1 million, while the net profit was EUR 1.2 million. The cash flow for the period was EUR -2.2 million. There was a slight negative from operation also reflecting spending on increasing biomass of EUR 1.4 million. We had an investment in CapEx of about EUR 5 million related to Stage 2, which is now near completion. We had loan drawdowns, net finance of EUR 3 million. That gives the negative EUR -2 million.
The biomass of 5,600 tons corresponds to EUR 39.6 million, including the fair value adjustment of EUR 8 million. The average standing biomass cost, excluding the fair value adjustment, is EUR 5.59 per kg. The equity ratio is 47%. On the financing side, things are largely unchanged since last quarter. We have this syndicated credit facility for the project loan with nine major Chinese banks for a total of CNY 385 million, at all-in borrowing costs below 4%. Currently, we have drawn RMB 316 million, so remaining availability is RMB 69 million, which will cover remaining CapEx related to Stage 2. We have a working capital facility currently standing at RMB 61 million availability, whereof RMB 41 million has been drawn so far.
Our agreement with the project loan syndicate comprised a preliminary agreement also for financing Stage 3 when we get to the FID on that. I think that is all from me, Ragnar.
Thank you. Thanks, Tom. To sum up, production is going well, harvested record volumes in the quarter. Cost is down from last year and moving towards the EUR 6.8 full cost next year. Market is strong. Financials just explained by Tom and the financing. Project two, phase II completed, and started detail engineering for phase III. If we go to the outlooks, as mentioned in the beginning, we expect to harvest between 5,700 and 6,000 tons this year, going up to 8,000 tons next year. Average harvest weight, 4.4 kg HOG this quarter, lifting up in Q2 next year to 5.2 kg. Costs coming down going forward from today's level in this quarter, EUR 7.3 down to EUR 6.8. This has already started as we are well into Q4.
With this, we conclude our presentation. Please remember to write in some questions, and then we can take them now after our presentation. Thank you so much for listening. Tom, do you sit with the questions? Can you see any questions so far?
I can, so I will read them out, and I think we can sort them out between us. I will start with, what will be the share of 5+ kg HOG in Q4?
I can just take that question because, as we are now preparing for larger fish, the average harvest weight will not increase in Q4 related to Q3, so it will be on a similar level that we have seen previously. Then maybe gradually higher, somewhat higher during Q1 next year until we reach the level where we want to be in Q2 next year.
Then there was one, should we expect no CapEx for Stage 2 in Q4? No, I think there will be some CapEx for Stage 2 also in Q4. We said that we maintain the budget at around EUR 65 million, so there might be another We are around EUR 50 million now at the end of Q3, I believe, so another EUR 5 million between Q4 and then perhaps later. As I said, this corresponds to the undrawn portion of the project loan, so from a cash flow perspective, it will be covered by the project loan. Then there was one question on Stage 3. When do you expect FID decision?
We expect it to be in the first part of next year, so at least during the first half of next year.
There is one more question. Based on the import graph, it looks like EU price is around EUR 9 kg in the quarter. Price achievement EUR 6.29 at 5+ EUR 7.6. What drives the discount between big fish and import price? What discount between big fish and import price?
Yeah, I think we have many times been through the dynamics of the Chinese market, which is that the smaller size here, more the industry size in Europe, do not command the same type of pricing. It is not just the same kind of demand for the smaller fish in China as you see in other markets. And some of that is due to the usage in the end channels. There is a lot of focus on using it for sashimi. Now, when it comes to our price achievement in the quarter, and if you look at this import graph, we are benchmarking it from 5+ kg and upwards, and there is a lot of the fish coming from the European side, which is 6+ kg. So it is not a direct apple-to-apple comparison.
We also had the, as we mentioned here in Sitagri index, a 7% premium, and this will fluctuate a bit for us. We had a little bit more focus on what we had product specifications, sizes, but more into the four to five range in this quarter. That is a part of the optimization during the fish stock to make room for the bigger fish coming into next year. Yeah, if you look at those two together, there will be some discrepancy. But again, we look at 5+ kg, and usually what is imported there is a 6+ kg product land price in China.
One more on the market, Andreas. Following up that one, looking at the demand drivers for 2026 year-to-date versus 2025, what are the main changes that you are seeing in the consumption pattern? More of the same or any changes?
I was about to say more of the same. I think, particularly since 2025, what has been key drivers has been the retail sector, both online and offline. This has been even a higher penetration rate into smaller-sized cities in China. More new consumers are recruited into the channels because of the convenience of buying it. Also, obviously, that you had an awareness of salmon in the first place. Now people are actually starting to eat this. We continue to see also there's a lot of product development going on, especially in retail. The consumer has a lot to choose from. It's also become a product that retailers are pushing, and I think this is contributing to a lot of that demand.
Keep in mind, China, although it's retail, it's still a rather big fish market, given that the property, so the bigger fish there, is highly attractive here when it comes to having a factory fish and also the focus on having it in sashimi. Whether you see the food service as a big fish market, you also have to look at that big fish market that's somewhat into the retail as well. I think the strategy we are doing now, increasing the sizes, it will cater to both those two markets, and I think that looks very promising.
There is a question on feed costs, the development of the feed cost. We can quantify the feed cost increase.
Yes, of course, the whole industry is experiencing now that feed costs are increasing. We could see that the direct feed cost increased 13% from Q2 to Q3. There was also an increase of 6% from Q3 to Q4. It has been increasing significantly over the past quarters.
Another question, can you give some insight into what you do different to get the fish up to 5+ kg from current levels?
We just feed them. They thrive well in our waters. They grow.
Are there any measures you are taking to increase harvest weight other than reducing the number of fish in the tanks?
No. I mean, we wanted actually to come there sooner, but since we ordered previously in the batches that we had coming in, we ordered more eggs per batch, and we expected to have a lower, or we were prepared for at least to have a lower survival rate. But we can see that we have filled up a facility now with fish that keep going up to a weight, at the harvest weight that we have now. Going forward, we have reduced our number of eggs and thereby also the fish coming through the system. Now, we can fill up the facility with larger fish rather than smaller fish, so we do not have the same number, and that is what makes us produce the larger fish.
What is the optimal number of individuals in Stage 1 and Stage 2 in order to reach 8,000 tons?
Yeah. I do not have that number in my head. I know we have approximately 4 million fish in our facility in different sizes, but we have increased, I can say, we are taking in batches of fish, and we have reduced the number that we order of eggs with nearly 30%. So, we will have fewer fish in the batches. But of course, it takes more than two years from taking a decision until we are there. We could have taken out some fish, but we have been very careful. Our farmers are very delicate and happy for the fish and do not want to kill fish unnecessary.
No, I think that concludes the question. Thank you.
Maybe I can just add also in the end, that during this year, there has been a currency effect also on the costs. We produce all our costs, so to say, are in Chinese RMB, and the RMB has become stronger, especially towards the euro, and approximately 10% of the cost today can only be seen when we express it in euros and not in the local currency. So, 10% of the cost that we have had this year has actually just been currency changes. Okay. Thank you so much.