Hey, and welcome to the presentation of the results in the first quarter of 2020 for SalMar. My name is Gustav Witzøe, and I'm the CEO in SalMar. And I'm here today with the CFO, Trine, and our head of IR Håkon. Right now, we are at InnovaMar, our main office, and our fantastic harvesting and processing facility behind me. You can see the holding cages where the well-boat and loaded healthy and sustainable salmon to be locally processed here on Frøya, before being shipped out to our customers all over the world. First, I would like to give a great thanks for the efforts all of our employees are doing every single day. It is our employees across the entire organization which make SalMar strong in the challenging period and make sure that we will get through this even stronger.
Despite slight restrictions due to the corona pandemic, SalMar has more or less been running as normal, with limited corona impact in quarter one. The good results we are presenting today are partly due to the good prices, but most of all, it is the effort of our employees, the passion, and the strong SalMar culture we have in the company. I'm both humble and proud of this. We are a fantastic group of people, and we need to remember that the result we present today is not the result of something extraordinary in this first quarter. This is a result of strategic and operational focus over a long time. The deal is in the details. This has led to benefits in this quarter, but will also give benefits in the future. We will follow the same agenda as in the previous presentation.
I will take through the strategic and operational highlights before our CFO, Trine, will take you through the operational and financial updates, and I will return with the outlook. First, an update on the pandemic, which has shaken the whole world. I would like to thank the many thousand people working within healthcare all over the world who have been taking care of the sick. And it's good to see that the society is now opening, and then we soon will be back to a more normal situation. In SalMar, we have several postulates. One of them is we care. The postulate has gotten an extra meaning and dimension in this situation we are now experiencing. We have imposed strict restrictions in SalMar to prevent the disease from spreading and to make sure that all our employees have a safe- and- secure workplace.
It's good to see that none of our employees has been infected so far. As a company, we are fully aware of our responsibility towards our local communities. We have donated personal protective gear to local health authorities, and we have taken in people who have been laid off from other businesses. We are also focusing on stimulation of local business by purchasing from local vendors. Even though the spread of the coronavirus has led to significant market uncertainties and the prices have been falling, we in SalMar are in a strong position. The world population needs food. In the facility here on Frøya, we are processing large volumes of salmon, which are sent directly to stores all over the world. We must remember 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 we have financial flexibility of strength opportunities. SalMar's strategy is industrial, and we are now implementing strategic measures throughout the value chain. In May this year, the construction of Senja Smolt started. This is an important part of our future growth. When the smolt facility will be finished in 2022, it will give us increased capacity to produce more smolt with the right quality, size, and amount. On Senja, the construction of InnovaNor continues with full speed in accordance with the plan, and the building is now rising up from the ground with expected startup in 2021. The investment on Senja will give us a complete value chain in the north, from smolt to processing. Senja will be a powerful industrial center for SalMar, and we believe in Northern Norway.
In addition, the upgrade of our harvesting and processing facility, Vikenco, is also moving according to plan with expected finish first quarter 2021. The corona pandemic has given us, remember, the importance of having a strong and flexible value chain. Now, regarding our Ocean Farm One project, the final report for the Ocean Farm One development project has been sent to the authorities, and the biological performance on our second production cycle is very, very good. We have also applied for conversion for the development licenses to normal licenses. Ocean Farm One will be an important unit within our salmon production going forward and gives us important competence for the planning of smart fish farms, which will be established in the open sea. Our strategy has a clear ambition to be globally leading in both technological and substantial production of salmon.
But now, over to the results for the first quarter of 2020, where we have the highest operational EBIT in the quarter in the history of SalMar. In Norway, we harvested 35,700 tons in Q1 with an operational EBIT of 1,044 million NOK with a margin of NOK 29.22 per kilo. Including Arnarlax, we harvested 40,000 tons in Q1 with an operational EBIT of 1,065 million NOK with a margin of NOK 36.61 per kilo. Central Norway delivers strong results through solid operation and good biological performance. Northern Norway has a good result despite biological challenges caused by ISA. Solid and efficient operation and good capacity utilization within harvesting and processing have given good margin, but fixed price contract margins have been hit by high spot prices. To give you more details, we will now give the word to our CFO, Trine.
Thank you. Thank you, Gustav. Yeah, starting with Central Norway, in the quarter, we did harvest 22,200 tons with an operational EBIT of 743 million NOK, giving EBIT per kilo of 33.50. We have a strong result in the period with stable cost development and an expected somewhat lower volume due to seasonality. After low price achievement in the previous quarter, where large volume was harvested in the beginning of the period, we have a much more even distribution in quarter one, giving us significantly higher prices in the quarter. In the quarter, we harvested mostly from the autumn 2018 generation. That was about 75%, which was stable cost development from the last quarter. We started also to harvest from the spring 2019 generation in the quarter, which so far showed very good biological performance and lower cost level compared to previous generation.
Those locations are actually ahead outside Frøya and in what we call exposed areas, and this location has proven a strong record for many years. In the second quarter, we will finish the rest of the autumn 2018 generation and then 2019 spring generation. We expect quarter two to have slightly lower volume and lower cost. For the year, we keep the guiding unchanged volume-wise. Then we go to Northern Norway. We did harvest 13,600 tons in the quarter, operational EBIT of NOK 389 million, and thus EBIT per kilo 28.68. This is a good result in the period with significant cost improvement compared to 2019. As Gustav mentioned, the result is somewhat negatively affected by increased harvesting cost due to ISA on a few sites, and also we had harvested from several harvesting facilities.
We will, to some degree, avoid this additional cost when we have InnovaNor up and running from summer 2021. In addition, I would also have a comment on the price because the price achievement is somewhat affected by a larger harvesting volume towards the end of the quarter, where prices were somewhat lower compared to the beginning. Spring 2018 was finished in this quarter, one third of the volume, and those were also the fish with somewhat higher cost towards the end due to increased harvesting cost, as already mentioned, and also somewhat lower growth. Spring '18 has been the main contributor to harvest volume with stable development from previous quarters. The sites affected by ISA have been emptied in April, and we will continue harvesting of autumn 2018 in quarter two with somewhat lower cost compared to previous harvesting sites.
We expect somewhat lower volume and lower cost in quarter two, and the guiding for the year is unchanged. Sales and processing. Sales and processing delivers an EBIT of NOK, 17 million in the quarter. We have this quarter solid and efficient operation together with improved capacity utilization has given us satisfactory margin from this activity. We have 26,000 tons to our harvesting plant in quarter one, which is higher than comparing quarter 2019 and higher also in the last quarter 2019. But due to the high prices in quarter one until the corona started, sent the prices towards the end of March, we then have fixed- price contracts with negative contribution in the quarter. In the quarter, we had about 24% of the contract share.
The contract share for the quarter two is expected to be around 25%, and for the entire year, we expect ± 20% at a price level slightly higher than we experienced in 2019, and as already mentioned by Gustav, the construction of InnovaNor is progressing according to plan. Arnarlax. We harvested 4,300 tons in the quarter with an operational EBIT of NOK 21 million, EBIT per kilo 492. As we already communicated in the last quarter, we experienced increased mortality in the beginning of this year caused by a winter wounds on the 2018 generation, which has led to harvest of large volume in a challenging period with bad weather conditions and low seawater temperature. This has resulted in a weak result with high cost in the quarter, where mortality cost has negatively affected the figures by NOK 30 million, which gives more than NOK 7 per kilo.
We will continue harvesting '18 generation in quarter two, but expect significantly lower volume. We expect about 1,500 tons. In addition to this additional cost, we also experienced a significant price drop in Euro in the very last end of the quarter that impacted also weak margin in the quarter. On the positive side, we see that the 2019 generation, which we harvested out in the last part of this year, shows good biological performance. Guiding for the full- year is kept unchanged. It's still 12,000 tons. Scottish Sea Farms delivers an operational EBIT of NOK 42 million with an EBIT per kilo 1.436. After challenging the second half of 2019, quarter one this year has shown good biological performance with good growth and low mortality, and there is good status in all regions. This has resulted in lower cost compared with previous quarter.
There is low harvest volume in the quarter where most of the volume came from Scotland and Orkney Islands. Volume is around 2,000 tons lower compared with the same quarter last year and is a result of the biological challenges in the second half of 2019, where we had higher mortality. In quarter one, we have chosen to let the fish grow, and the volume harvested has been mainly sold to maintain contract obligations. As mentioned also in the last quarter, we have invested in a new smolt facility using recirculation technology also in Scotland. Also this quarter, we have put a significant number of smolt into sea with about 156 grams, which is about double the size compared to previous years. I will also mention that the impact in our accounts of the tax is negatively this quarter, and that is because of the fair value adjustment.
The operational result is positive. Guidance for the year is also here unchanged with 26,000 tons, and then some comment on the P&L. I will start with the comparison compared to last quarter and starting with the Norwegian operation. As you can see from this slide, we have increased the EBIT per kilo with NOK 1,250 per kilo, and that is mostly driven by higher sales prices. On the second half of the figure, we present the same, including Arnarlax on Iceland, and we have here increased the margin with NOK 10 and EUR 30 from last quarter and also driven by higher prices, but then also somewhat negatively affected with the higher cost price on Iceland. If we go into the P&L, some comments.
We have increased the harvesting volume and increased spot prices this quarter compared to the same quarter last year, and that is also the reason that we have increased the EBITDA and operational EBIT for the quarter. Due to significant changes in the index range rates, we have some impacts on the P&L, and I will highlight some of them. If we go to this fair value adjustment, which is negative by NOK 480 million this quarter, NOK 450 million out of this is directly related to unrealized change of forward currency contracts. If you go to the other financial items, negative with NOK 125 million, that is also related to unrealized loss change on currency from Euro and Pound to Norwegian kroner. The last comment I will highlight is the items to be reclassified to P&L, NOK 303 million.
And that is due to the investment we have both in Scotland, Norskott, on Iceland, Arnarlax, where we recalculate the equity in pound and Euro to NOK. And income in associated companies, which is mainly from Scottish Sea Farms, is negatively due to the fair value adjustment, which I referred to some minutes ago. If we go further to the balance sheet, we're comparing the balance sheet to the balance sheet as of 2019. Some main comments: the investments continue according to plan, and that is also one reason that the balance is increasing somewhat. In addition, the total balance increase is due to Arnarlax and also Norskott, where we have items in Euro and Pounds. Standing biomass is on the same level compared with last year and somewhat lower since the end of 2019.
Net interest-bearing debt is reduced with 671 million NOK during the quarter, which gives us a net interest-bearing debt end of this quarter, 2.2 billion NOK. To sum up, SalMar has still a very strong and solid financial position with an equity share of 55.7%, and we have the ratio net interest-bearing debt EBITDA of 0.55. In addition, we have still strong flexibility in committed bank facilities, which is not used at the moment. If we look into the movement in the net interest-bearing debt from year 2009, as you can see from this slide, we're starting with the net interest-bearing debt at the beginning of the quarter, 2.9 billion NOK, and then we include the IFRS leasing, and then we have, of course, the result for the period, and some other comments to the rest, I would like to highlight investment again.
As we have communicated last quarter, we have a strong CapEx program, and that is ongoing as planned. For the rest, that is increased debt due to exchange rate NOK versus Pound and Euro. That leaves us to a net interest-bearing debt of NOK 2.2 billion end of quarter one. Then, Gustav, I will give the word back to you after clearing this up.
Thank you, Trine. Back to the outlook. We also have a postulate in SalMar saying that what we do today, we do better than yesterday. For us, now is very important, and 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 on cost improvements projects.
At the moment, we are experiencing good biological status in the sea, both in Central and Northern Norway. In total, we expect similar volumes in Norway in Q2 with lower cost, slightly higher volume in Central Norway with lower costs, and slightly lower volume in Northern Norway with also lower costs. As Trine mentioned, we expect lower volume and weak margin on Iceland in Q2. Contract share is at 35% in Q2 and 30% for the full year, with prices slightly up from the level of 2019. Guiding in both Norway and Iceland is kept unchanged. We still expect moderate supply growth in 2020, but COVID-19 has led to increased market uncertainties, and SalMar is well- positioned to handle a demanding market with strong operational and financial flexibility, and we have, of course, a positive view on the future for salmon.
Our job is to implement the measures and strengthen us today, and at the same time, we'll make us even stronger going forward. We focus on the solution, not the problems. Within 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 quarterly presentation will be in August. Until then, we hope all of you stay safe and healthy. Thank you.