Hi, and welcome to the presentation of Second Quarter Results of 2020 for SalMar. My name is Gustav Witzøe, and I am the CEO of SalMar. Together with me, today, I have our CFO, Trine Sæther Romuld. We will follow the same agenda as in previous presentations. As you can see behind me, we are presenting the results from InnovaMar on our main office and fantastic harvesting and processing facility. In this way, we get to show you where we belong. It is out here, on the coastline from Central to Northern Norway. SalMar produces 450 million healthy salmon meals to people all over the world. But before we dive into the results, I would like to give you a great thanks for the efforts our employees are doing every single day.
Despite strict restrictions due to the corona pandemic, SalMar has been running as normal, making it possible to send millions of salmon meals across the globe. It is our employees throughout the entire organization that make it possible for SalMar to again deliver strong results. This is not a result of something extraordinary, but it's the result of long-term strategic and operational focus. Given the strong SalMar culture with great passion and ability to find solutions in the challenging periods.
I'm both humble, proud, and grateful for the efforts from our employees. We are a fantastic group of people that give everything for each other and for the salmon. But before we continue, there is something I want to show you. I know several of you who are watching were planning to visit us during the Capital Markets Day in June. Unfortunately, we had to cancel the event. But to give you a little taste, we have made a short movie we want to show you now.
As you saw from the movie, it's at the end right behind me at the holding pen. The holding pen is currently filled with healthy and sustainable salmon from Ocean Farm 1. We are now harvesting from the second generation production cycle, and we expect to finish the harvesting within a few weeks. It has taken one year since we released the 200g smolt in Ocean Farm 1 unit, until we have received a salmon ready for harvesting, around 5kg , with a fantastic quality. This salmon will be locally processed here at Frøya before it's sent to our customers all over the world.
The results from the first two production cycles meet our expectations and the expectations the Norwegian authorities set when we present the groundbreaking project: strong growth, good fish, welfare, with low mortality, and no need for sea lice treatments. Based on strong documentation of the project, the authorities gave approval for conversion of the development licenses for Ocean Farm 1 to ordinary licenses early in July, and I promise we will not stop here. Ocean Farm 1 will continue to be an important unit in our total farming business and for the road ahead. More information on Ocean Farm 1 can be found on our website.
We at SalMar are proud to have completed a project that is groundbreaking in the work towards developing an increasingly sustainable agriculture industry. It's a recognition of the job the authorities took the chance to let us do. Together with leading competence, environment, and suppliers, a total of more than 3 million working hours have been spent on Ocean Farm 1, and it's now in full operation on Frohavet. The good experiences, both biologically and operationally, with Ocean Farm 1 have strengthened our belief in offshore farming.
We will build on this when we explore possibilities for construction of a new Ocean Farm unit. And of course, we bring this with us in the work we design a location for farming in the open ocean with Smart Fish Farm, where we expect an investment decision in 2021. It is not only within offshore farming we have a strong faith in the future. We also have a strong faith in the future developing an even more sustainable aquaculture industry along the coast.
This clearly came to show last week when we purchased growth at the auction of MTB capacity in green areas in the traffic light system. In total, we have purchased over 8,200 tons increased capacity. This represents a growth of 9% where we have purchased growth in both Central and Northern Norway. This gives us a flexibility to optimize our biological production. As you know, it's the salmon that decides when it's ready for harvesting in SalMar, and everything we do has to be on the salmon terms.
Going forward, we will utilize this increased capacity to optimize biology and consider to adapt our harvesting plans. This means that we can push some harvest volume later to ensure optimal utilization of the increased capacity. But maybe even more important, but even more important, have to increase our earnings on the new MTB capacity as fast as possible.
Our strategy directions are not a result of short-term strategy, but go together with our long-term industrial strategy and operational focus in the entire value chain. This strategy is based on three essential pillars in our industrial strategy. We shall be leading technologically, operationally, and industrially. This means that SalMar in the years to come will invest in industry facilities on land for smolt production and harvesting and processing.
In total, this strategy will make us more robust and means that we will be even more innovative and competitive in the future. In May, the construction of Senja 2 started. This is an important part of our future growth. When a smolt facility will be finished in 2022, it will give us increased capacity to produce more smolt with the right quality, size, and amount. Also on Senja, the construction of InnovaNor continues with full speed and in accordance with plans. We expect it to start up in summer of 2021.
The investment on Senja will give us a complete value chain in the north. From small production to processing, Senja will be a powerful industrial center for SalMar, and we strongly believe in Northern Norway. The corona pandemic has given us a reminder of the importance of having a strong and flexible value chain. In the case, parts of the value chain are under pressure. Therefore, the situation of the pandemic has strengthened our belief in our investments in Northern Norway, in Aukra, through Vikenco, and across the entire value chain to make us even more robust in the future.
The pandemic has shaken the whole world. Therefore, we in SalMar have chosen to introduce strict disease prevention measures like many other companies. It shall be safe to work in SalMar, and for us at SalMar, caring for each other is one of our most important postulates. In June, we saw the joint effort to combat the spread of infection helped, but we are seeing an increase after the summer holidays. Therefore, it is important that all of us work together to limit the spread of the disease.
But we cannot forget the opportunities that are ahead of us. In SalMar, we will come through this stronger and more powerful than ever before, and the results we are presenting today show that we are robust and strong to handle challenging periods, but before we move on to the results for the quarter, I want to once again praise the efforts of our employees. The second quarter has been a special quarter where the working day for all of us has been more challenging than usual.
Despite this, the employees have been working hard every single day and found solutions where others see challenges. This has led to that COVID-19 has had limited effects on both our operational and financial results for SalMar in the second quarter. Highlights from the second quarter: In Norway, we harvested 39,200 tons in the second quarter with an operational EBIT of NOK 912 million, with an operational margin per kilo of NOK 23.24. Including Arnarlax, we harvested 40,900 tons with an operational EBIT of NOK 882 million, with an operational margin per kilo of NOK 21.56.
Both Central and Northern Norway deliver strong results through solid operation and strong biological performance. Despite a demanding quarter with high market uncertainty and increased distribution costs, sales and processing deliver good results. As signaled in the previous quarter, Arnarlax delivered a weak margin. To give you more details, I will now give you the word of our CFO, Trine.
Thank you, Gustav. As usual, I start with the farming, Central Norway. We did harvest 27,300 tons in the quarter with an operational EBIT of NOK 679 million and EBIT per kilo NOK 24.92. This is a strong result where strong biological performance combined with solid operation focus has resulted in lower cost level. Autumn 2018 generation was finished early in the period with stable development from the previous quarter. Spring 2019 generation accounted for 80% of the harvest volume in the period.
This is from a location just outside Frøya, which again shows biological performance which has resulted in lower cost level compared with previous generations. After a good price achievement in quarter one, this quarter has given satisfactory price achievement in line with average NASDAQ spot price. In the third quarter, we will finish harvesting of spring 2019 and start with harvesting of 2018 generation.
Autumn 2018 has shown a good biological performance in the last period, and in total, we expect cost at the same level as Q2 and slightly higher volume in Q3 compared to Q2. Guidance for the year is kept unchanged, 103,000 tons, but as Gustav already has mentioned, with the increased maximum biomass that we recently have bought, this also gives us some flexibility to optimize biological production. Therefore, we will continuously evaluate and adapt our harvest plan in the period to come.
Farming, Northern Norway. We harvested 12,000 tons in the quarter with an operational EBIT of NOK 242 million and EBIT per kilo of NOK 20.16. As for Central Norway, this is also a very good result where strong biological performance combined with strong operational focus has given a lower cost level. Nevertheless, the result is somewhat negatively affected by low price achievement due to 70% of the harvest volume coming in the beginning of the period until mid-May, where the price was at the lowest.
Autumn 2018 generation has accounted for all of the harvest volume in the period and was finished in the period. Our last location that was affected by ISA was emptied early in the period, and the main part of the harvest volume comes from a location that has shown significantly improved performance and lower cost level than the previous harvest location in northern Norway.
We stopped harvesting in July before we just started the last week in August, and then spring 2018 generation. Spring 2018 has shown good development the last month, and with increased maximum biomass, we will also there continue to evaluate the harvest plan to optimize biologically. We expect a low harvest volume in quarter three and slightly higher cost level compared to quarter two. As for Central Norway, we kept unchanged the guidance for the year, but keep in mind what we just referred to with the flexibility of this new maximum biomass allowances.
Sales and processing deliver an operational EBIT of NOK 70 million in the quarter. The quarter has been characterized by high market uncertainty due to COVID-19, with volatile prices and high freight expenses. Despite this, sales and processing deliver a good result in the period. It's not one single factor that explains the figure, but I will mention three main factors.
We have increased capacity utilization at the plant due to higher volume to the harvesting plant, and this combined with solid operation has given satisfactory margins from harvesting and processing activity. We had more than 33,000 tons through this plant in quarter two, which is 30% higher than last quarter. In addition, we have succeeded quite well in allocation of spot sales in a challenging period, and in addition to lower spot prices, it has given a positive contribution from the fixed price contracts.
In the quarter, we had the contract share that was 30%. Contract share currently is 25% for both quarter three, and we expect for the full year the 25% with prices slightly up from the level in 2019. As mentioned by Gustav, the construction work on InnovaNor, our new processing harvesting processing facility in Northern Norway, is progressing according to plan. The startup is scheduled for the summer of 2021, and we are currently recruiting personnel to key positions, and we are happy to see that we have a lot of well-qualified people.
When the facility is up and running, this will give us increased flexibility, and also we expect lower costs throughout the entire value chain in addition to local processing. Then Arnarlax. We deliver weak results this quarter, and I will talk through this in more detail after, but first, I would like to put Arnarlax in a bigger picture long term. We in SalMar have great faith in the future for Arnarlax and also salmon farming on Iceland. Iceland has some unique biological conditions that make it attractive for aquaculture.
Some examples: there is unique access to water that is important for the smolt, and the sea temperatures are in line with Finnmark, the Northern part of Norway, that provides good biological conditions for farming. If we look at the period since SalMar invested in Arnarlax in 2016 and today, the harvest volume has increased significantly. And looking into both existing licenses but also applications that are ongoing, there is fantastic growth potential.
And we are now taking steps to equip ourselves for this growth. Arnarlax is present in the entire value chain: smolt, farming, harvesting, sales, and therefore we have full control of the value chain. It's therefore a matter of exploiting this to equip ourselves for further growth. We have made investments to strengthen ourselves, especially on the smolt side, at the same time as we invest in modern equipment in other parts of the value chain.
But we must not forget that Iceland is a young farming nation, and Arnarlax is a young company. Our focus is therefore not only to invest in equipment, but also to build culture and competence and bring some of what Gustav mentioned earlier, the strong culture in SalMar. Among other things, Arnarlax Academy has been started. This is based on an important meeting place we have developed in SalMar over time, which is referred to as SalMar School.
Culture and competence is something that takes time to build, but we at SalMar contribute with competence and experience in all parts of the value chain, and we will with this facilitate that we help the fantastic people who work in Iceland to utilize this potential. In sum, we are sure this will improve performance from Iceland over time and make it an attractive place for us to be present. But some comments to the figures.
In the quarter, we harvested 1,700 tons in the period with an operational EBIT of NOK - 30 million . As we signaled in the previous quarter presentation, Iceland delivered a very weak result in the second quarter, where the result is impacted by both high cost but also weak price achievement. Some comments to the cost first. The location which earlier this year experienced increased mortality due to winter wounds was finished harvested in the period. This has given high cost, where among around EUR 1.1 million is related to increased mortality cost and is expensed in the quarter. That amounts to NOK 7 per kilo.
The freight cost also increased in the period due to more challenging logistics out from Iceland. In addition, lower volume to the harvesting plant has given lower capacity utilization and thereby higher cost. Together, all of this has given a high cost in the period. Price achievement. Around 90% of the volume was sold in April and May, the period with the lowest price during the quarter, and also in this period, the price difference on larger size fish was lower than usual, and Arnarlax has not gotten the effect of higher average weight on the harvested fish.
In addition, I will mention that Arnarlax also accounts in EUR and hasn't had the positive impact of the exchange rate. Looking forward short term, location with increased mortality is finished harvested out, and in quarter three, we will harvest from 2018 generation location, which has not been affected by high mortality. We will also start harvesting of the 2019 generation in quarter three, which has shown improved biological performance and lower cost level compared with previous generation.
But the period we are currently in with lower spot price will also affect the result from Arnarlax in quarter three. Combined with just a slightly higher harvest volume in quarter three, we expect a weak result also in quarter three. We expect a slightly higher volume in the quarter and somewhat lower cost in quarter three compared to this quarter. We keep unchanged the guidance for the year, 12,000 tons.
And then Scottish Sea Farms. Scottish Sea Farms harvested 6,500 tons in the quarter and delivers an operational EBIT of NOK 89 million , which gives EBIT per kilo NOK 13.69 . Harvest volume increased by 30% compared with the same quarter last year, and we have harvested from all three regions with good results in the quarter. The positive development is continuing with lower cost compared to quarter one. The company reports of good biological performance with good growth and low mortality in all regions. The guidance for the year is unchanged, 26,000 tons.
Then we move to the financial update. Starting with the EBIT bridge comparing to last quarter, we have reduced EBIT per kilo NOK 5.98 compared to quarter one, and this is related to lower sales price but somewhat offset with lower cost in the value chain. For the group, this also includes Arnarlax. This is a smaller reduction in EBIT NOK comparing to last quarter. This is a result that Arnarlax consists of a relatively smaller share than it did for the other quarter.
P&L. Some comments to the P&L in the quarter where we compare with the same period last year. We have a stable revenue despite the lower spot price. This is a result of higher contract price combined also that some customers have been willing to cover some of the increased freight cost in the period. As you can see, we also have higher operational cost due to this freight cost. Both the EBITDA and operational EBIT is down due to lower volume and lower spot price, but the effect is slightly reduced through lower cost in the value chain.
At the end of quarter one, there was large movement in the currency rates between NOK and foreign currencies, but during quarter two, the NOK has gradually strengthened itself, which leads to some negative changes last quarter, is to a large degree reversed in this quarter. We have a fair value adjustment, which is positive due to unrealized change in currency and currency contracts combined with biomass adjustment.
Other financial items are positive this quarter due to realized and unrealized currency movements from loan in other currency than NOK. As from previous quarter, income from associates mainly relates to Scottish Sea Farms and is positive in quarter two due to improved result and lower negative fair value adjustment, so if we're comparing EBIT per kilo compared to the same quarter last year, it has decreased due to lower spot price.
The NASDAQ is reduced with NOK 4.85, but we have compensated with NOK 2.98 lower cost in the value chain. It's also worth noting that if you're looking into the first half result for SalMar, operational EBIT, that is actually higher than first half in 2019. Balance sheet. Here we compare the balance sheet to the end of previous quarter. Investments are progressing according to plan, and fixed assets have increased at the same time. As we also have combined that we actually have taken into use the first battery hybrid wellboat, which increased what we call the right to use asset.
The standing biomass is higher comparing year to year. We have more fish in sea, and we have a larger release of smolt in the first half of 2020 compared with the previous year. This gives a higher amount in the sea with a slightly lower average weight, which again gives us a good foundation for utilization of increased MTB capacity. Net interest-bearing debt is reduced with NOK 564 million in the quarter, and as of quarter two, the net interest-bearing debt is NOK 1.7 billion.
In total, we still have a very solid financial position. The equity share is 59.7%, and we have a ratio between net interest-bearing debt and EBITDA of 0.32. As you know, we used some money recently on traffic light growth, NOK 1.8 billion. So therefore, the net interest-bearing debt will increase in quarter three, but it's very satisfying that after this payment, that we still have significant available facilities and a robust financial position.
Movement in net interest-bearing debt is really only two items, and that is the EBITDA that we have talked about, and then there is the investment. We have used NOK 520 million in various CapEx investment, and that is actually the highest CapEx figure in one quarter ever for SalMar, and also demonstrates clearly that we are investing in the future. And then I will give the word back to you, Gustav .
Going forward, we will even have even more focus on what we do today. We do better than yesterday. SalMar wishes to cement our position as a technology leader in the aquaculture industry, to become an even larger contributor for sustainable growth in the future. We will continue to have focus on the things we can impact and do something with. Good financial results come from good biological conditions and operations, and the salmon always come first.
The devil is in the details, and we shall continue our optimization and cost improvement project. Combined with our strategic focus, this will make us even more robust in the future to handle challenging periods. At the moment, we are experiencing good biological status in the sea, both in Central and Northern Norway, and in Iceland. In total, we expect lower volume in Q3 2020 with cost at the same level. Slightly higher volumes and cost at the same level in Central Norway, low volume and slightly higher cost in Northern Norway, and as Trine mentioned, slightly higher volume and weak margin from Iceland.
Contract share is at 25% both in the third quarter and the full year, with prices slightly up from level of 2019. Guidance both Norway and Iceland is kept unchanged, but we'll utilize increased MTB capacity to optimize biological production. We still accept moderate supply growth in 2020, but COVID-19 has led to increased market uncertainties. SalMar is well positioned to handle a demanding market with strong operational and financial flexibility. We have a positive view on the future for salmon, but we have to acknowledge that the effects of the coronavirus are not over in a few months, but will likely last for longer periods of time.
Our job is to implement the measures that strengthen us today, and at the same time, will make us even stronger going forward. As you say in the postulate in SalMar, we focus on the solution, not on the problems. With this, we have come to the end of our presentation, and we would like to thank all of you who have been watching. Our next quarter presentation will be in November, and until then, we hope all you stay safe and healthy, and you have to eat a lot of salmon. Thank you for the attention.