Good morning, for coming to this earnings report of Salmones Camanchaca for the first quarter of 2023. I think it's appropriate to start this earnings report by having a one moment to remember our founder, Jorge Fernández Valdés, who died a few weeks ago. Someone that took control of Camanchaca, a holding company and controlling partner of Salmones Camanchaca in 1980, when the company was selling approximately $3 million. In the last year of Jorge Fernández Valdés, the company had revenue of $725 million. That is 250 times the size of the company when he acquired the control of Camanchaca. I think it's appropriate to remember him, and thanks for his great contribution to our company.
It is also appropriate to remember that we are in this first quarter of 2023, had the anniversary, the fifth anniversary of Salmones Camanchaca's IPO. I'd like to remember that when we made the IPO five years ago, precisely in this first quarter, the company, Salmones Camanchaca, had revenue of $80 million and EBITDA of $18 million and a net interest-bearing debt ratio over EBITDA of 1.3. Five years forward, revenues and EBITDA has grown 41%, and the net interest-bearing debt ratio has declined by almost one half. It's a good fifth birthday of this IPO. Next, the agenda. As always, we've now to cover the most relevant aspect of the quarter.
The highlights is, I should summarize it as profitability improved, mainly because the prices were higher than a year ago, but also because the achievement on the price was also very good. Thanks to formats and markets that were targeted, we had a good achievement on the price level in the market. It also explained the better results, much higher volume than the first quarter of 2021. As a consequence of that, the EBITDA was seven times higher than a year ago. We also had a good quarter in terms of biological performance of the fish. In fact, this first quarter of 2023, we had a very high survivorship rate for our fish, much higher than in 2022.
Remember that in 2022, in the first quarter, we have some incidents related to a decline in oxygen level in certain parts of the Patagonia's ocean. As a consequence of that, we have lower harvest weights in the first quarter of 2022 that explained the results then. We had a normal quarter in this abnormal summer in this 2023. As a consequence of that, there are about $3.7 million impacted in 2022 that are not now in 2023. Prices continued to be at a high level in the first quarter of 2023. Costs were contained despite the inflationary pressure, both from feed and other on our cost level. Costs were slightly below the first quarter of 2022. As I said, volumes were 37% higher.
I think that also explained the better results in this first quarter. Sorry. All right. Financial highlights. As mentioned, 37% higher volume harvested in the first quarter for Atlantic meant that revenue were 40% above the first quarter of 2023. Attributable, as I said, volumes and also a high price for the quarter. The product formats and markets targeted for this quarter were also helping the price achievement, as Manuel will explain in a minute. The price achievement, the volumes and all that meant that the EBIT per kilo for Atlantic was $1.68 per kilo. That was a very good number in for our standard and higher, a lot higher than in the first quarter of 2023, 2022.
If we will consider both Atlantic and Coho, the EBIT per kilo was $1.44. In fact, the EBIT per kilo of Coho was, in our view, slightly below our target. The reason for that was mainly attributable to cost. We had two factors affecting the cost of Coho. One was the feed cost was high, and it was high precisely when the fish was biggest at the end of its cycle, in the fourth quarter of 2022. That was when the feed cost was highest during the year. It also was attributed to an incident of ichthyosis, a disease that we confronted in our sites during the cycle that meant a higher mortality, and Manuel will cover that in more depth in a minute.
Quarterly, EBIT of $25.7 million, that was a lot higher, as I said, from the first quarter of 2022, seven times the $3.7 million that we had in 2022. In 2022 was impacted, as I mentioned, by this oxygen decline situation that we confronted a year ago, and also because the price were lower, huh. Sorry. Growth in harvest and stocking for 2023, quarterly Atlantic harvest volume was higher than the previous two years, and it was importantly in line with our projections that we provided to the market. That was also in line with our target plan of recovering above 50,000 metric tons of Atlantic by 2024.
The stocking plan that we have at the moment, that we are concluding in the next weeks, is targeting for around 55,000 metric tons of Atlantic for 2024, and we are in the path to that in 2023, with an expected 44,000-46,000 metric tons of Atlantic. On the Coho side, as you saw in the table, we had a substantial increase in our Coho from a low level in 2022. We expect now in 2023 to get 10,000 metric tons, between 11,000 and 12,000 metric tons of Coho for 2023. We've completed the cycle for the Coho, the 2022/2023 cycle. Harvest and sales were very similar in the first quarter of 2023.
The reason why we did not sold more inventories in the first quarter of 2023, it is in the table. As you can see, the second quarter of 2023 contains a very low harvest volume, between 6,000-7,000 metric tons for the quarter. Therefore, because of our marketing strategy, both for Atlantic and Coho, we sell relatively stable over the course of the fourth quarter of the year, and therefore we expect inventories to serve the purpose of keeping sales stable in the second quarter of 2023. That's the reason why we hold more than 3,000, almost 4,000 metric tons of Atlantic inventories and around 3,000 metric tons of Coho inventories at the end of this first quarter.
That is precisely why we can say that in the second quarter we will be selling more than what we will harvest. Obviously, in Coho, we will not harvest anything because the cycle for the season 2022/2023 is already over, huh? Manuel, you can follow with the operational review.
Thank you, Ricardo. Now I will cover the operational review of Salmones Camanchaca. As you can see in this slide, the most important farming operational and biological indicators. As you can see, Camanchaca has had an excellent operational and biological performance in the last 12 months. It's important to say that here we are seeing the outcomes of an internal farming improvement program that we initiated more or less one year ago that has mainly three key initiatives. The first one is several internal measures in order to improve the farming.
The second one is the implementation of a risk mitigation system, a well in an oxygen, to reduce the impacts of algae blooms and oxygen events. Third, it's a risk diversification strategy that includes, first, to reduce the exposure of Atlantic to the fjords in the 10th region and replace that by stocking in the 11th region. Also including Coho stocking and harvest in the fjord of the 10th region. Three key initiatives of this program, and now we are seeing very good biological indicators. As you can see in the left graph, the monthly mortality rate has been below the industry average in the last 12 months. In the right table, you can see the main indicators compared with the industry. In all of them, we are better than the industry average, such as the mortality rate, four point...
4% compared with 11.3%, the conversion, the growth, the length of the cycle, the grams of antibiotics per ton produced, and the harvest weight. In general, very good performance. In relation to the cost, this Q1 came with an ex-cage cost of $4.27. That is lower the same period of last year. That was $4.36. Mainly because of this good biological performance. Even though we have been pressed by higher feed cost and mitigation cost and, of course, the inflationary pressures. If we compare the costs of this quarter, $4.27, with the pre-pandemic level, let's say Q1 2020, we are approximately $1 per kilo higher. Mainly because of feed cost. That's the main deviation that represents 45% of the total farming cost and account for an increase of $0.40.
Second, mitigation plus inflationary pressures that accounts for another $0.40. That's the main difference between 2020 and 2023. In general, of course, we are experiencing cost pressures due to the global inflation, including mainly, that are positively affected or offset by strong market prices and good price realization, as Ricardo mentioned. In relation to the total cost, the total cost in the quarter was $5.83. That is down 2.3% compared with Q1 last year. The processing cost, that includes wellboat, primary, secondary, packaging, and freight, local freight, was $1.24, was lower than Q1 last year due to the higher process volume, but still stressed by the global inflation. The last 12 months Chilean inflation was 4% until March. Sustainability indicators.
The sustainability indicators for closed sites were also positively affected by the good biological performance. As you can see, the Fish In:Fish Out ratio was well below one and with a very big improvement in Q1 of this year. We are also had an outstanding length of the cycle of only 14 months. Also, it's important to highlight the reduction in the antibiotic usage grams per ton this quarter, driven by the good biological and farming conditions. It's important to mention also an important improvement on the percentage of the ASC certified harvest biomass that increased from 89% in Q1 last year to 100% ASC certified biomass this quarter. That's also a very important improvement. Coho. Regarding Coho salmon, during the first quarter of this year, we completed the last site.
In this season, we harvested two sites, one in Q4 2022 and one in Q1 2023. As you can see in the left table, the mortality and the conversion were slightly higher than the previous year. Mortality was 10.2% and conversion was 1.14. The Fish In:Fish Out ratio was 0, that's very important due to the fact that we use marine ingredients produced from fish waste in our diets. It's important to say that in this cycle, we did not use any antibiotics or any Antiparasitics. No sealice and no antibiotics. If we go to the season, regarding the ex-cage cost for the full season were higher than the previous season in $0.83, an important increase, mainly due to the higher feed cost.
That is, represent $0.63 out of the $0.83 increase. Of course, some inflationary pressures. We are also affected in this season by a percentage of fish with some smoltification problems, more or less 4% of the total stocking. Also, as Ricardo also mentioned, an increase in the mortality due to an outbreak of Ictericia or Jaundice. We are certainly implementing several measures this year to avoid both situations in the next cycle. Let's go to the markets. In this graph, you can see the Urner Barry trimmed fish, fresh evolution. As you can see, the prices in Q1 this year are in very good levels, influenced by strong demand from our main markets, American markets, Mexican market, Brazil, and also China. Prices remain at high levels, we expect that remain in good levels.
However, they are now in a lower level compared with last year, as you can see in the graph. Chilean supply recover in the first quarter of this year with a +3% increase, and also demand suffered from the global inflation. In light of the negative growth for the second and third quarter of this year, -5% for Chile and -4% respectively, we anticipate that prices will not ease it too much going forward. Kontali for this year, for Chile expects a 1% drop in the Chilean supply, and for global, only a 1% increase in the global supply. Atlantic salmon price achievement. In this data, you can compare the return of Salmones Camanchaca compared with the return of the Urner Barry index.
As you can see in the graph, first, we increased our prices during Q1, lagging behind the benchmark, Urner Barry, in January and February as market price rose sharply. In March, our return was $0.33 above the market. Second, it's important that due our greater flexibility in our production mix and markets, the processing and export market is essential to capture the higher prices. In Q1, as an example, 50% of our sales went to fresh markets and formats. If we analyze our price trend over the time, our prices are more stable than the market price, thanks to our value-added strategy, our market diversification, and of course, because our contract with some key customers. Atlantic sales and value-added mix.
As you can see in the left graph, the American market continues to be the largest market with 39% of market share, followed by Mexico with 22%. It's also important to highlight the contribution of China, that has an important increase to 5.4% compared with 2% the Q1 last year. Value added was 73% in the quarter, lower than Q4 2022. We had better opportunities in the fresh age on format. The age on format varied from 10%-30% in the last two years as we optimize our return based on our processing and market flexibility. Finally, one word for Coho. The marketing, processing, and product mix strategy for Coho is very similar to Atlantic. The marketing strategy for Coho aims to first develop new markets.
As you can see in the left graph, Japan and Korea were our most important markets in 2020 and 2021. Now, the most important markets are American market and Mexican market. An important shift in the markets first. Second, what is important to mention is the production mix flexibility. We increase a lot the percentage of value-added fillets and portions as a part of our strategic initiatives from 36% in 2020 to almost 100% in this season. 97% in fillets and portions in the processing in this last season of Coho.
Thank you, Manuel, for the explanation and a quick review of the financials. If we go to the waterfall that we have built here between the EBITDA of the first quarter of 2022 and the EBITDA of 2023, the first quarter, you will see that about 50% of the increase is attributable to the higher price level in the marketplace, as well as the price achievements that Manuel has explained. That is related to the formats and the markets that he explained. It also important to mention the Atlantic cost of goods sold. This is a consequence of many, many months and many quarters that we have had a good biological performance.
That is high survivorship rates. That means that the embedded cost of the fish that is harvested is lower than the previous year. Therefore, that's a positive impact on the cost of goods sold, despite the fact that we've had pressures on the cost side because of the feed, as Manuel mentioned. It is also important to understand the better EBITDA, the fact that in 2022, the first quarter, we have these $3.7 million impact on the EBITDA because of the extraordinary mortality of the declining oxygen level in certain part of the Patagonia's ocean . That's also positive. Coho, as mentioned, contributed less than expected because of this situation, this disease situation.
The cost of feed for Coho impacted the Coho precisely when the Coho was at its peak of weight before being harvested at the end of 2022. That also important to understand the transition from one EBITDA to the other. On the P&L, what can be said in addition to what we have already mentioned, I think that the higher interest rates are affecting the financial expenses in around $1 million approximately comparing 2022 to 2023. That's the fair value. Negative fair value is a consequence of the lower harvest volume expected for the second quarter of 2023. As you saw in the table, we expect to have slightly more than 50% in the second quarter harvest compared to the first quarter harvest.
Therefore, the decline in biomass at the end of the first quarter is behind the fair value. We expect that to be very different at the end of the second quarter when we are going to be ready for an important growth in harvest in the third and fourth quarter. That number will definitely look different. It also affected the fair value, the fact that at the end of the month, the market price that serves to account for the fair value was lower than at the beginning of the quarter. On the cash flow, relatively small negative cash flow. Operating cash flow is mostly related to the mix of fresh frozen formats sold, and therefore the longer collection of the frozen formats vis-à-vis the fresh formats.
Investments are aligned with our plan of diversifying geographically in the Patagonia and all, as well as reduction on the risks related to a potential climate change in the Patagonia. That's behind. In addition to what we mentioned, related to the cost of Coho. The equity ratio at around 52%, very similar to the end of 2022, 50%. Net interest-bearing debt ratio of 0.88 is better than 0.97. Lower interest bearing debt in relation to the EBITDA is mostly as a consequence of the better EBITDA, very simple. The financial, the financial debt in relation to the harvest volume to have an idea of how much do we own, do we have debts related to the volumes that we have.
In March 2022, we had $2.76 per kilo harvested. In March of 2023, we have $1.63 per kilo of debt. That is a substantial reduction from $2.76-$1.63 per kilo of harvest. Lot lower debt in relation to the size and the volume of the business. A quick word on the Chilean industry supply. We used to say that we've used this opportunity to have a view of the Chilean industry for the year. As you can see, we are expecting a decline, a small decline in Chilean supply for 2023. However, that is something different quarter by quarter.
As you can see in that table, we are expecting a first quarter, and we'll see the numbers soon. Above 3% with respect to the first quarter of 2022, and also, a growth in the fourth quarter of 2023 compared to the fourth quarter of 2022, but a decline in the second and the third quarter of 2023. We've, we are expecting a rather limited supply from Chile, during this quarter and the next, meaning that the price level that we envision for the fish, for the Chilean fish is robust during this, six months, huh? Finally, a word on Salmones Camanchaca growth plan.
We maintain our target of around 45,000 metric tons of Atlantic harvest for 2023, doubling the size, the volume of Coho harvest for 2023, something between 10,000-12,000 metric tons for Coho in 2023 compared to almost 6,000 metric tons in 2022, 2023. Remember that we harvest Coho at the end of the year and at the beginning of the following year, so we talk about the 2022/2023 season ended in the first quarter, at around 6,000, and that will be between 10,000-12,000 for the following cycle. We've completed or we are in the process of completing the stocking for 2024 in Atlantic.
With the existing fish in the water and the ones that are coming to the water in the next coming weeks, we are projecting something around 55,000 metric tons of Atlantic harvest for 2024. For 2024, we expect to have a similar volume for Coho, maybe slightly higher than in 2022/2023. Therefore, we are targeting for 2024 a total harvest in the 65,000-70,000 metric ton, which is something that we have been aiming for the last several years, huh? In summary, for the quarter, good price for Atlantic salmon and Coho as well. Both increased in the quarter compared to the last year's, to the first quarter 2022. Better volume explain a much higher revenue, therefore, a substantial recovery of the EBITDA.
If you take a look of the EBITDA of the last 12 months of Salmones Camanchaca, we are about $100 million in annual EBITDA and above $400 million in revenue. EBITDA margin of about 25% during the last 12 months. This is the first quarter of that. We've opened new markets for Coho. That is behind the strategy that we have for Coho. We are opening markets and formats for Coho in different parts of the world to have a lot more diversification in our Coho marketing. The price have absorbed higher cost that we've confronted, particularly on the feed cost for both Atlantic and Coho. That's, that's good.
Despite that, we've had substantial improvement in our biological performance, and therefore, the cost has been contained in the case of Atlantic. We paid dividend about a few weeks ago. That dividend was 60% of distributable earnings of 2022, and that gave our shareholders a dividend yield of about 7.3%. Finally, the last slide was in relation to our plan for 2023 and 2024, when we expect 2024 to be the year that we will achieve a goal that we have to completely utilize the capacities of the company at around 70,000 metric tons of both Atlantic and Coho. With that, we can have a few questions.
First question is, do you expect the same cost per kilo as in the first quarter for the inventory of Atlantic salmon and Coho to be sold in the second quarter? Manuel?
Okay. For Coho, the answer is yes, since the total we already harvested and produced 100% of the season. We have a remaining inventory of 2,600 tons until March. For Atlantic, I would say no. We ended March with an inventory of 3,500 tons, and we will produce in the second quarter around 6,500 tons with a higher cost because of the lower volume. We will increase a little the cost of the goods sold in the second quarter for Atlantic.
Next question is, also about cost, Ignacio, and do you see cost easing at some point during this year? Do you see them coming back to the pre-pandemic level? I would start with the last part of the question, and the answer is no. For two reasons. The cost of feed is already higher than the pre-pandemic, despite the fact that we may see cost of feed in 2023 at a lower level than in 2022, but most importantly, because we've added to our farming in Salmones Camanchaca, several initiatives, strategy, devices, services, and the like, to mitigate the risks of a potential climate change in the Patagonia, so that we confront, in a much better position, the bloom and the decline in oxygen incidents that we may have.
Because of that, there are certain beauties and competencies of our farm that are a lot better than the pre-pandemic. I think that that will continue to be the case. I don't see them coming back to the pre-pandemic level. Do you expect the strong biological performance to translate into lower ex-cage costs compared to the level in the first quarter?
In general, of course.
Yes.
The biological performance will help always a lot in order to contain the cost. I would say we are aiming to maintain the Q1 cost level. That is our target, at least.
For 2023.
Yeah.
Under the current context. Is there any other question? Do you expect the higher sales price for Coho in second quarter? We expect so. The strategy for Coho is value-added, new markets, non-traditional markets for Coho. That means that we get deeper into the market with our Coho products, and with the volumes that we have already harvested in our inventory, the plan is to keep the same strategy until we complete the sale of the around 3,000 metric tons of inventory that we have. It's not a substantial amount.
Exactly.
How much of the required working capital related to the future growth in harvest has already been spent? Not that many, because remember that the most relevant part of the working capital was related to the Coho. The Coho is already been harvested, we just start with the Coho the next season. The next season will peak the demand for working capital in the fourth quarter, not now. Maybe obviously for the Coho in the fourth quarter. For the Atlantic, 2022 has a similar volume, and it's in 2023 will be at around 45, not too different from 2022.
The bigger change will come in 2024, therefore, the working capital for Atlantic, I will envision that to be higher at the end of 2023, early 2024, because the volumes, the higher volume of Atlantic will be in a year from now. Can you explain the Ichthyophthirius incident, Manuel?
Yes, of course. Ichthyophthirius, it's, I would say, a common disease in the industry for Coho. We started the season, as I explained, with an situation in the smoltification at the freshwater stage. We did not smoltificate 100% well, the production of Coho. The original Coho stocking was not as health as we want. That was the first incident in the stocking in the last season. We don't have, we did not have a Coho with a good sanitary condition in order to confront or to deal, if you want, with the environment. We have the Ichthyophthirius situation. There is no antibiotics or no vaccine against Ichthyophthirius. It's only the fish against the disease in this case.
We had ichthyophthirius at 2.5 kilo. It was about 4% mortality at that part of the cycle. Too costly because of the weight of the fish. What we are doing in this new cycle is to strengthen the smolt in order to avoid any situation in the stocking and to have a better sanitary fish to prevent to have a ichthyophthirius situation again.
Well, I think, more generally speaking, the Coho is something that we've started a couple of cycles ago. One, then two, then three, farmings. It's a learning process for a new species. There are 90-something% similarities with Atlantic, but there are some peculiarities, and we are in the process of evolving and perfectioning the farm of Coho. I think this incident had taught us lessons that are already being implemented?
Exactly.
I don't think that this goes beyond that. Next question is also about the Coho. Coho has historically been dominated by Japan demand. Why you have focused on Mexico, and do you see the potential for Coho to be as profitable as Atlantic? For everyone to have seen, tried, and eat Coho, you will acknowledge that the Coho is as good as Atlantic. There are certain farming peculiarities, such as the fact that we have to harvest in about one quarter of the year, the total volume. Historically, because of that, the value added to that Coho was relatively low, and the market for a relatively low value-added Coho was Japan. That's the reason. There is nothing more than that on the Japanese concentration for the Coho.
We expect to change that and treat the Coho in a similar fashion as we treat Atlantic. Whether that will be more profitable or less profitable, we'll see. So far, we are very enthusiastic with that because it had and it has advantages vis-a-vis the Atlantic, such as the fact that we had no antiparasites, no sea lice, and no antibiotics. That will help. We'll have to wait and see a few more cycles to learn how much more or less profitable is with respect to Atlantic. What I can say today is if you wanna eat a portion of salmon, you will like more the Coho in your plate than the Atlantic.
Yes.
It's more beautiful, in my view. Any impact expected from the El Niño? El Niño is in the process of developing. As you probably heard, there is a coastal El Niño in Peru at the moment. It was strong, but declining. There is an traditional El Niño in developing in the center, in the center of the Pacific, that is expected to reach the central South America, the Ecuador and the Peruvian coast in the fourth quarter of 2023. Some El Niños in the past have affected the southern part of Chile. Some have not affected. We don't have really any evidence at the moment that this El Niño, if it really arrives in Ecuador and Peru, will get into the southern water of the Patagonia.
It will affect, likely the northern part of the Chilean coastline, but it's uncertain whether it will reach until the Patagonia, huh. No evidence at the moment, huh.
Let me, Ricardo, one thing about that, is that we are better prepared for any possible El Niño situation for the next summers.
Certainly.
Yeah. Because we reduced our exposure in the fjords of the Reñihué Fjord, as I mentioned. Second, because we are implementing, the risk mitigation, devices at the sea farms.
Manuel, maybe one clarification on that. If we take a look of the pre-pandemic, cost of farming, vis-a-vis the now, the current cost of farming, there is about a $1 difference-
Correct.
more or less.
Correct.
How much of that do you think is related to the risk mitigating measures that we've taken at the farm? New technology, new devices, several things that we've implemented in the farm.
Okay.
And these-
Yeah, okay.
$0.30.
Yeah. The $1 difference is, as we explained, $0.60.
On the risk mitigation.
Yeah. $0.40 shared by inflationary pressures plus mitigation. Mitigation depends on the site, but it's an average around $0.20.
20. Okay. $0.20, it's there for something. It's precisely to reduce the risks.
So.
I think that we've completed the question. Okay. Thank you very much. We'll see you in our first half earnings report around September, I think. Early September, late August. Thank you. Bye-bye.
Bye. Thank you.