Very good Friday morning to you all, and welcome to the presentation of the fourth quarter and full year 2024 from Proximar Seafood. The presentation will be given by CEO Joachim Nielsen in Japan and myself, CFO Ole Christian Willumsen here in Norway. We will start by addressing the main highlights of the quarter before giving you an update of the sales and marketing efforts. We will then share the status of the production, followed by revisiting the business case and going through the financials. Finally, we will guide for 2025 before summing up. With that, I'll hand you over to Joachim in Yokohama. Joachim.
Thank you, Ole Christian, and good morning. During the fourth quarter, we continued our harvesting in October and November, following the first harvest on the 30th of September. The total harvested volume was 28 tons in the quarter, of which 99.7% was superior graded fish. The average harvest weight was 4.2 kg HOG, equivalent to 5 kg live.
The price achievement for the quarter reached NOK 123 per kilogram, which is the net price to Proximar after sales cost and transportation, demonstrating a solid price premium. The strong interest for Fuji Atlantic Salmon is continuing, and the product has been very positively received in the market. During the quarter, we also secured additional funding of approximately NOK 44 million for working capital purposes through extra loan facilities in November and December.
In terms of the production, the turbidity issues were resolved, but unfortunately, we experienced some biofilter incidents, which again put us back to a reduced feeding regime. No mortality was seen in conjunction with this, but the reduced feeding following both these issues impacted growth rates in the fourth quarter. We continued building our biomass, although the growth has been impacted by the reduced feeding just mentioned.
At the end of 2024, our standing biomass was at 1,058 tons divided into 19 batches, and we are continuing with monthly inserts, but now also harvesting and shipping out in the other end. When it comes to our staffing, the team had grown to 59 employees by the end of the year, and we now have the necessary team filling the relevant functions.
During the last period, we've also strengthened our administration in Japan, which is a natural step in the transitioning from a product company to operation and sales, and reflecting also the increased activities here in Japan. Looking at the lower three graphs, the market in terms of consumption in Japan has been flattish for some time, impacted by the sharp increase in the salmon prices here.
However, following the softening of prices seen in the second half of 2024, demand has shown signs of increase in line with our long-term demand growth expectations. Looking at the lower right graph, we see the transportation costs have come down from the highest, but still remain around NOK 30 per kilogram. This also illustrates our significant cost advantage by producing locally in Japan.
Just to emphasize, this graph only illustrates implied transportation costs, not taking other associated costs like local handling duties and import margins into account. As we have communicated through the second half of 2024, we unfortunately experienced issues related to high turbidity caused by delayed installation of our ozone system. After finally being able to take the ozone system into use in the end of the third quarter, we're pleased to see the results achieved, confirming our expectations of bringing down turbidity significantly.
Unfortunately, soon after the turbidity was resolved and feeding was able to resume at planned levels, we experienced incidents with our biofilters. This again forced us back to a restricted feeding regime. We had no mortality in conjunction with this, but the reduced feeding to approximately 70%-80% of the plan does have an impact on growth and harvest volumes.
We see the biofilters still doing the job, although the CO2 stripping is less efficient. To avoid too much load on the filters, we have reduced feeding as a risk reduction measure. The cause of the incidents is related to poor quality of material used for the supports, and the cost associated with the biofilter repairs is estimated to be around NOK 20 million.
The repair works are ongoing and to be completed in April, and for the repair cost, as well as the economic losses related to impact on harvest volumes in the first half of 2025, we are in process with our insurance company. The consequences for the production following reduced feeding related to turbidity and biofilters are seen in the harvest sizes and distribution as well. This will be impacting the harvest volumes in the first half of 2025.
The estimated impact in terms of total volumes related to this translates to approximately 500 tons downward revision from our previous guiding communicated in conjunction with our three-year report in November. We now expect a larger portion of fish in the 2 kg-3 kg size impacting the overall volumes. This group is also below market size, which again will impact the average price achievement for the first half.
However, as we look into the second half, we expect harvest sizes to gradually normalize and size deviations to be lower, getting back to our target harvest size of approximately 4.2 kg HOG. The positive is that our harvest keeps showing very promising results. Up until the 25th of February, we have harvested a total of 202 tons since starting in September. Of this volume, 99.8% has been superior, which is outstanding.
This clearly demonstrates the good performance of our system and conditions for the fish and great efforts from our dedicated and competent team. As mentioned on the previous slide, the fish size distribution negatively impacts the average achieved sales price. Despite this, our average achieved net price to Proximar, meaning after deducting sales and transportation costs, is approximately NOK 110 per kilogram.
For the market-sized fish, we continue to see a good premium compared to the imported salmon. In terms of weights, the average harvest size has been 3.2 kg HOG, or just below 4 kg live. This is lower than our production plan target, but a direct result of the reduced feeding mentioned before. As for the quality of our fish in terms of taste, we have received no complaints.
We have no off-flavor issues, and we are excited to see that our fish is now being introduced at high-end restaurants and sushi chains, which is another proof of quality. We will now be harvesting on a weekly basis through 2025 and continue to see good demand and strong interest for Fuji Atlantic Salmon. The interest is also visible in the media.
As we have seen for a long time, Proximar has been receiving strong and broad interest. It is great to see this continuing into 2025, and this enthusiasm is also very motivating for our team. NHK, the major national TV station in Japan, will be covering Proximar in a program in the end of April. We have also been selected by industry media as one of the top news in 2024.
We will continue our efforts going forward according to our strategy, building our brand and product awareness towards consumers in Japan and abroad. Touching a bit on the RAS performance, we continue to see stable and high water quality. We see that despite reduced capacity due to the biofilter issues, we are able to maintain good water quality, which is really impressive. We have also installed extra water treatment, as previously mentioned, to add to our treatment capacity.
This is a precautionary measure to reduce risks by enhancing the water quality even further. This equipment is now installed and in operation, showing good effects as expected. Despite the fact that we are building biomass to reach our standing biomass target, we have been operating at full capacity on a modular level and seeing the system's ability to maintain water parameters and good growth conditions.
We have seen this in the nursery, which has been operating since March 2023 and for the last one and a half years at full capacity. Now we see the same results in the grow-out, whereas said we have been running at full utilization on a modular level. This means we've been above 80 kg per cubic meter, also in the grow-out, whilst maintaining good water quality and confirming the capacity in the design.
The performance seen makes us confident in reaching our target utilization of 5,300 tons HOG in 2027, corresponding to a density of 80 kg per cubic meter. With a superior rate of 99.8% and positive feedback on taste, we clearly see the proof of system functionality and performance. We have no off-flavor in our fish, and we keep monitoring geosmin levels closely. We are taking water samples biweekly for testing from all modules.
Having said that, we have always been expecting geosmin in the production water, which is also why we have purging as part of our production cycle. However, I'm pleased to see that the geosmin levels in our grow-out production water are very low, and we see the ozone efficiently also removing geosmin. Although geosmin is not a problem for us, we continue to purge according to plan to ensure the quality.
Our main issue in production is, as said, related to reduced feeding caused by turbidity and biofilter incidents. These issues are directly linked to late equipment installation and construction material and not to the technology. I find this very reassuring in terms of our production going forward. Feeding aside, with the natural impact this has on growth, the biological performance is very good, and we continue to see low mortality and good fish health.
We have seen a 98% survival rate in the grow-out over the last year from January to December 2024, if we exclude incidents, and approximately 93% survival, including all incidents. Currently, our standing biomass is 1,061 tons, of course impacted by the reduced feeding and reduced by recent harvest. I will now hand over the word to Ole Christian for some insights to our numbers and outlook.
Thank you, Joachim. Actually, first we'll have a quick revisit of our business case before diving into the financials. Let us then start with the updated cost picture for an importer of Atlantic Salmon into Japan. This is important as this cost picture represents a benchmark for the prices that can be expected for Proximar when selling our Fuji Atlantic Salmon in Japan.
It's encouraging to observe, as we can see in this graph, that the benchmark prices have remained high also throughout 2024, averaging NOK 119 per kilo for the second half of the year. It's also very comforting to know that we've realized prices above the benchmark for all the months that we harvested in last year.
Let's have a look at what these benchmark figures may imply for the margins that can be obtained by Proximar. Starting with the left-hand side, the red line illustrates what we saw on the previous slide, namely the cost of importing Atlantic Salmon from Norway. The horizontal blue line further down in the picture represents the estimated EBIT cost per kilo at the targeted annual harvesting volume of 5,300 tons.
Therefore, the shaded area between these two lines is an indication of the profit margin per kilo that could be obtained by Proximar at our targeted volume. In the graph on the right-hand side of this slide, we are illustrating our expected EBIT cost per kilo at different harvesting volumes, indicating profitability even at low harvesting volumes. With this in mind, we remain optimistic in terms of good price achievement in 2025 as harvesting increases throughout the year.
Now let's move over to having a look at the financial figures. Let me start by saying that we still report on a relatively simple format since we in 2024 were finalizing the equipment installation and had modest harvesting. We therefore do not report any figures per kilo yet, and we have not separated the cost base into farming and non-farming elements.
We plan to do so during 2025 as the company ramps up production and sales. We had revenues of NOK 3.4 million in the quarter and an EBITDA of minus NOK 31.2 million. Correcting for the effects from two special items, the adjusted EBITDA in the quarter was minus NOK 10.3 million. With depreciation of NOK 15.3 million, the adjusted EBIT for the quarter therefore ended on minus NOK 25.6 million.
The majority of the net financials related to interest expenses, and we are then in total reporting a loss of NOK 62.3 million before tax for the quarter and NOK 63.5 million after tax. These figures are then unadjusted. Looking at the balance sheet, we held assets of approximately NOK 1.6 billion, where 88% were fixed assets or long-term assets, and the equity stood at just under NOK 400 million.
The vast majority of the liabilities are now current, and several processes for refinancing the loans falling due in the third and fourth quarter of this year are now ongoing. Following the lower harvest in the first half of the year that Joachim has already mentioned, some additional working capital is needed, and this is being addressed now through debt facilities.
Now let's move over to the outlook for 2025. We are very optimistic about what will be our first full year of operations with equipment installations completed. We guide on a full year production of between 3,500 and 3,800 tons, with the majority coming in the second half of the year when the effects of the issues we experienced in the second half of last year will have been overcome.
On the financial side, we expect to reach positive EBITDA already in the first half of the year, and we will communicate the full year guidance for EBITDA in Q2. No major CapEx is currently planned for 2025, and we are on track in terms of our target for full utilization of the facility in 2027, equivalent to harvest volume of 5,300 tons per year. With that, I'd like to hand it back to Joachim for the summary.
Thank you, Ole Christian. Wrapping up, we continue to be encouraged by the good and stable performance. This is perhaps the most important factor for success and our positive outlook. We've also finally completed all installation works, permitting us to focus only on production going forward. We are uniquely positioned with a robust business model in Japan, well ahead of competitors, and our plans to grow the company will proceed as we see our operational goals being achieved.
We're also experiencing interest from other Asian markets, and we believe growth could be seen in several ways. Having said that, we do not plan for any CapEx related to this in 2025 and will carefully consider the best ways to secure accretive growth for our shareholders. We've also previously communicated that we are exploring strategic alternatives, and this work continues. We are encouraged to see increasingly strong interest in Japan, both from industrial and financial names, which is not surprising taking into consideration that we can now offer the product in the supermarket shelves, and Proximar is becoming very visible.
Despite some startup challenges, we remain optimistic on the outlook and with our expectations to harvest around 3,500 tons-3,800 tons HOG fish this year, and we see this also translating into good earnings. Finally, I can reassure you that the Proximar team is working with high dedication to deliver on our goals and showing a strong commitment. With these words, we will conclude our presentation and open up for questions.
Welcome to the Q&A session in connection with the presentation of Proximar's fourth quarter report for 2024. My name is Vivian Lunde. I am Director of ESG and Business Operation and will be the moderator for this session. Our CEO, Joachim Nielsen, and CFO, Ole Christian Willumsen, will be answering your questions today. We have already got a few questions. First one is for you, Joachim. I would say phase one is evolving with reasonable expectations. Can you share information concerning phase two?
Yeah, at this stage, we are, of course, as we've also communicated previously, focusing on getting stage one up and running as we plan in 2025. At the same time, we are also considering alternatives for future growth. We are continuously looking at locations, and we're also getting inquiries from various municipalities in Japan asking us to consider a possible location of our future facilities.
We're also getting increasing interest from outside of Japan, so we can see phase two and future growth developing in several different ways. Again, we are focusing now on stage one, getting stage one stable and showing good performance. We'll also make financing and the alternatives of funding stage two easier in terms of either debt financing, but possibly also other structures like long-term leases or other possible partnerships.
Thank you. The next one is for you, Ole Christian. It's actually two questions. One, will Proximar Seafood have enough funds to keep the production running until it reaches max capacity? Two, is the production cost per kilo as earlier estimated?
Yeah, regarding the first question, I'd like to reiterate what I just said in the presentation, that due to the lower harvest in the first half of this year than originally forecasted, we will be running a tight ship until the summer, and there will be a need for some additional working capital in the first half of the year. We are then working this through debt facilities.
No planned kind of equity transactions for working capital. Obviously we will need to come back, as Joachim just mentioned, for phase two financing, but only some working capital needs until the summer for now. When it comes to the question regarding cost per kilo, also like I said just now, we do not report per kilo yet since we are in the ramp-up phase. Of course, the cost per kilo right now is high, but like I showed in the graph in the presentation, we keep the estimate for our EBIT cost per kilo when we get into full utilization, meaning that what we see for cost so far is in line with the expectations so that we expect to be coming around NOK 70 per kilo when we are in full production in some years' time.
Let me just add on the CapEx side on stage two, we're not planning any CapEx related to stage two in 2025.
Okay, thank you. The next question is about the sales, and I guess, Joachim, this will be for you. How far and wide is the Fuji Atlantic Salmon sold in Japan?
It is primarily sold in the areas around the bigger cities, Tokyo, Yokohama, Osaka region, and Shizuoka, which is the local prefecture where we are located. We see it around the bigger cities, and since we still have a limited volume, that is also part of the reason why it is relatively concentrated. It will be gradually broadening out on the distribution in Japan, and we are also seeing or receiving demand from abroad, so we also believe that we could see some export volumes going forward as well.
Thank you. We have no further questions. As always, you are welcome to send your questions directly to Ole Christian Willumsen by email. Our next planned communication to the market is the launch of the annual report on March 21st, and the presentation of the first quarter of 2025 will be on May 16th. Thank you for joining us, and have a nice day. Thank you.