Good morning, everyone. Thanks for coming to this first quarter 2022 earnings report of Salmones Camanchaca. We will. I'm with Manuel Arriagada, the managing director of Salmones Camanchaca, and we plan to cover the highlights of the first quarter. A quarter that I would name it as a lot better than previous year, than the first quarter of 2021. However, yet, not good enough for reasons that we will cover. This is the agenda for the next 45 minutes. Let me jump into the highlights of the quarter. Profitability certainly improved due to a much better pricing for the quarter.
The price impact on the operational EBIT of the company, only due to the price, was approximately $18 million for the operation compared to prior first quarter of 2021. We have a smaller impact of extraordinary mortality of the summer of 2022 compared to 2021. That was on the good side, and the extraordinary mortality this year was about half of what it was a year ago, but yet still about $3.6 million for the quarter. After the quarter ended, prices have reached maximum historical levels, and we are certainly pleased with that, despite the fact we envision lowering the price in the rest of the year.
Harvest came lower than anticipated as some of our farm confronted incidents of low oxygen in the water in some areas of the Los Lagos region that affected one of our sea farms that was precisely harvested during the quarter which explain about 45%, almost 50% of the harvest of the quarter. Something that led us to anticipate the harvest of that farm and therefore we ended up with very low average weight for that particular site below 4 kg. Overall a 4% decline in the total harvest of the quarter compared to the previous year. We completed with great satisfaction during this quarter the season of the Pacific salmon or Coho with 1.8 EBIT per kg on the quarter.
That was very good news for our future project. We had a higher than normal cost of Atlantic, as I mentioned, came mostly exacerbated by these farmed that grew very slowly to a point where we had to harvest earlier, as I mentioned. At this point, we have fully harvested all the surviving fish from the Comau Fjord that had the incident of algae bloom one year ago. Although the fish as of today are out of the water and therefore will not be with us in the remaining part of the year.
However, the environmental ocean conditions from March onward have been much more favorable for the fish than the early part of the year, and we have had very good performance in the second quarter of 2022, catching up harvest volume that we didn't reach in the first quarter. That means that we are keeping our guidance of about 51,000-54,000 metric tons of harvest for the totality of 2022. This is the highlights of the quarter, and we'll get into a bit more details. Revenue in the quarter recovered about 16% versus the same quarter of 2021. Mostly due to a 34% increase in our price during this quarter compared to the previous one. Sales volume was 30% above harvest volume, meaning that we were reducing inventories during the quarter.
We purchased some of raw material from other farmers, and therefore, we had additional volume that help absorbing fixed cost during the quarter and also able to keep the volume with the clients. The quarterly EBIT it was almost zero, slightly negative. The Atlantic EBIT at about a quarter of a dollar negative. But that includes about $0.35 of extraordinary mortality. A lot lower than the first quarter of 2021, but yet still negative.
Volume is recovering from previous quarters with better average weights. Estimated harvest for the second to fourth quarter of 2022, stable around 12,000 metric tons-13,000 metric tons per quarter, very stable. A good recovery from the first quarter and also the first three quarters of 2021. We will have good news on the volume side. We keep our guidance of about 45,000 metric tons-47,000 metric tons of Atlantic for the remaining part of the year, plus the 6,000 metric tons-7,000 metric tons of Coho harvest. Stocking plan are in line, and there has been a good growth of stocking in the industry level. Manuel?
Okay.
Regarding the operational review, in particular the Atlantic salmon, biology.
Oh, gotcha.
First, for closed sites, that means the sites that closed their harvest in the first quarter of 2022. As you see, we have a very, very low mortality, total mortality of 6.5% in the quarter, down from 28% in the first quarter of 2021. A very good indicator in terms of mortality. However, as Ricardo mentioned, in the first quarter, we harvested one site that was affected by oxygen levels, without mortality, but generated an underperforming biomass growth, so that forced us to harvest it earlier. These farms represented 45% of the total harvest of the quarter. Because of this, the average weight of the quarter was lower compared with one year ago at 4.3 kg WFE.
The same, the yield was the same as 2021, mainly because we have lower mortality. The good news is that the feed conversion ratio was low at 1.12, and with a very good trend in the last three years. Regarding the living fish, the oceanic conditions during the summer were rather unstable, with some algae incidents and also with lower than normal oxygen levels. Since the end of February, the oceanic conditions improved very well in a positive way, with very good oxygen levels and also with very good in general conditions, improving the growth and with lower mortalities. The live weight cost for the first quarter was high at $4.36 per kg live weight. That is 11% above last year and 40% above two years ago.
The main reason of that is related to that one particular site with very low average weight because of the oxygen situation that I explained. Also, it is important to mention that we are experiencing in farming and also along the total value chain, the impacts of the global inflation. In particular, in farming, we have a very important increase in the feed price. That is approximately 30% increase compared with one year ago. We estimate a total impact because of the feed price and also because of the inflation of about $0.40-$0.50 for the harvest of 2022. Of course, once the markets stabilize, we will provide new cost targets for both for farming and for processing.
In relation to the total cost, the total cost in the quarter was $5.97, above the previous year and above the previous cycle in 2020. The processing cost, in particular, was $1.29. That is 7% above last year. That is $0.09, mainly because the lower volume and the lower average weight of the quarter. Processing is also affected by the inflation, the personnel cost, and also the packaging cost. As I mentioned, because of the inflation and the price of the feed, the increase of the feed, we expected an impact for the full year between $0.40-$0.50 in terms of the costs.
Thank you, Manuel. Let's take a quick look at the markets. Prices in all markets remain at historically high levels and are expected to remain so for the rest of the year. There will be two forces in the second half of 2022. A very limited growth, or I would say no growth for the year globally and certainly for Chile, and unexpected tighter demand conditions because of the environment and because of the macroeconomic situation. Other major non-seafood proteins increased in consumer retail prices similarly to salmon, that is in the 12% to maybe 15% growth, year-over-year.
Retailers have absorbed, as you can see now, compared to our own price increase, retailers have absorbed a large fraction of the price hike, as they probably did in 2020, but on the reverse side. In light of a very moderate growth of the second half of 2022 and some negative growth for the full year, we anticipated prices will not ease much going forward, and everything will depend now on how strong demand is. However, there are some economic ingredients that might generate a rapid decline in economic growth in the second half of 2022. We may even have a recession at the end of 2022. This obviously might end up affecting some salmon prices as global demand eases and consumers watch for their wallet.
In fact, 95% of Americans are saying now that they are concerned about inflation, and two-thirds of Americans have said now that they are taking measures to protect them against the inflation situation. This will translate into consumer trading down to lower costing proteins such as chicken, pork, and other center of the plate meals, such as low-costing pasta, for example. That will happen likely if the macroeconomic condition is as we expect. However, seafood source data confirmed this with fresh seafood sales dropping close to 12% year-on-year in the U.S.. But this hides the fact that overall fish, finfish, have not seen any price impact. The main impact on the seafood sector has been on the shellfish more than on the finfish where salmon belongs.
Overall, our view for the year is caution, but starting from a very bright baseline, which is the current price. All in all, my personal view is that there will be somewhere a moderate decline on prices during the second half of 2022. In reference with the price achievement of Salmones Camanchaca, price realization following upward trend as market price rises. As you can see from the chart, every time the market price increases rapidly because of the value-added strategy that we have in the main markets that we operate, we tend to lag behind. The opposite is true when the prices are downward. We tend to remain above the market conditions. These provide us less volatility on the price and more stable relationship with our customer base.
Whenever prices are going up, as I said, like in the first quarter from, I would say March to April, we saw a very rapid increase in price. We tend to lag behind, but we catch up, a situation that I envision will happen in the second quarter of this year. Our volume will grow substantially in the second quarter and third quarter that Manuel mentioned before, compared to 2021. We will be harvesting somewhere between 40% and 50% more volume than in the first quarter of 2022 in the next two quarters, so that will be. That will allow us to catch up very quickly on the marginal prices. That would be very positive, and we'll see that in the second and third quarter earnings report.
In terms of markets and formats, the strategy of Salmones Camanchaca continues to be focusing on the core markets to leverage long-dated relationship and strong positioning of our distribution offices in this market to allocate our value-added products. The most important market for us remains in this quarter, the U.S. with more than 50% and Mexico, which is about 1/6 or 1/7 of our sales. We're becoming a leading provider of portions from Chile, mainly in the North American markets, a format that explained about 44% of our sales in the first quarter of 2021. Very substantial enhancement of our portioning capabilities of Salmones Camanchaca in the last year and a half or so. Manuel, maybe you can cover on sustainability, good news that we have in the quarter.
Yes. Thank you, Ricardo. Yes, the first integrated annual report at the end of April in our shareholders meeting, we delivered our first integrated annual report that includes the sustainability topics in our traditional annual report. That is very in line, of course, with our long-term commitment with sustainability. It's important to highlight three very important achievements that are included in the integrated annual report. The first one is that we are now included in the Dow Jones Sustainability Index in 2021, with the highest Chilean industry rank. The second one is that we gained the recognition of Industry Mover for our substantial improvement in the metrics during 2021. Finally, the third is that among the largest 60 food public companies globally, we rank number 20 on sustainability according to the Coller FAIRR Index.
Three very important achievements during 2021 that are included in our integrated annual report that now is available in our website for you. Regarding some indicators, the first one, it's very important to highlight the good evolution of the fish in, fish out ratio that is well below one, and with a very important improvements in the first quarter, and with a very good trend in the last three years. However, during the quarter, we increased the number of antibiotic treatments, and also increased the antibiotic usage in general. It's important to address that this increase in antibiotics is mainly because some fish harvested in the first quarter came from the environmental challenges that we had back in 2021 because of the algae blooms, that add more stress for the fish.
That opens finally an opportunity to the SRS bacteria and we need to treat. However, we anticipate a reduction in the antibiotic usage during 2022. Another thing that is important to mention is that at the end of the last year, as you know, we obtained a sustainability-linked loan that was a, an important achievement of the financial area of the company. This new linked loan have five main important objectives with specific metrics that are the following. The first one is the climate change. We have the commitment to reduce the greenhouse gas emissions to achieve the carbon neutrality in the Scope 1 and 2. The second objective is to farm sustainable. Our objective is to increase the ASC certified biomass in excess of 60% per year. The third one is the marine protection.
is to decrease the marine ingredients in the salmon feed. That means to below 0.5 the ratio of fish in, fish out. The fourth one is the circular economy. Our objective is to increase the solid waste recycling to over 60%. Finally, the fifth one is regarding the people. Our objective is to improve the occupational health and safety and reduce our accident ratio below two. We will be reporting the progress of these five important objectives once a year.
Thank you, Manuel. Getting more on the financials of this first quarter. The EBIT shows an $11 million improvement from one year ago. A lot better, as I said, but certainly not good enough, huh? The increase in prices explained the majority of this improvement in the EBIT, huh? Extraordinary mortality financial impact on EBIT this first quarter of 2022 was half of what it was the first quarter of 2021, and came at around $3.7 million versus more than $7 million in the previous year, huh? That helped, but certainly it was negative, huh, the extraordinary mortality.
Higher cost of goods sold was partially due to the low harvest weights mentioned by Manuel, and also the fact that we purchased third party or other farmers', fish in order to be processed and sold by Salmones Camanchaca, and therefore that put a higher cost on the fish. But it was a good thing because it gave us scale and positioning in the market, huh? The fourth element I would like to mention here is the very favorable condition of the quarter in the Coho project that we are conducting. We expect to triple production this year, 2022 compared to 2021.
We completed the year 2021 season very profitably and successfully, and this is very important for what is coming in the future for us in this species. On the P&L, since we've covered all the more operational of the financials, it's worth mentioning the Trout JV this year contributed $1.1 million more than in the previous year. This is an even year for the trout business, and therefore it will be much better than the previous year. There was, on the non-operational side, no extraordinary mortality financial impact, contrary to 2021. This non-operational extraordinary mortality relates to the deductible of the insurance that was claimed last year. Financing cost was higher due to the increased interest in the interest rate of the financial debt of the company.
Although fair value is seldom considered, it's favorable to anticipate that the fair value anticipates better prices for the next couple of quarters. On the cash flow in the first quarter, positive operating cash flow in the first quarter as we collect higher prices and large volumes sold in the fourth quarter of 2021, that was collected in 2022. That's very positive for the cash. Investments resume as we deploy our risk mitigating plan, both in species and in farming location that we've mentioned in previous quarters. That's the main point of the cash flow.
In summary, if we take a look of Chile's condition, - two-year Chilean harvest growth, if we compare 2020 with 2022, which means similar geographical zones as we have a two-year cycle, we had an 8% reduction in the Chilean supply in two years. 2022 will have, in our view, very similar volume than 2021. Negative growth in the first half of 2022, and some marginal growth in the second half. Overall, our view is a slight decline in the yearly supply of Chile coming from Chile. In summary, to finalize, I would like to leave you with five or six messages.
One is the prices were substantially better than a year ago and helped absorb higher cost of fish, caused by one farm lack of biomass growth situation attributable to oxygen levels, mainly, and second inflation pressure, as Manuel mentioned. Second point is our Coho initiative to diversify species, to one that does not have exposure in the fjords, to the summer conditions, is evolving very well with a profitability of 1.8 EBIT per kg, during the quarter. Coho performance is very important for us, because we are aiming this year to triple production, and we are also aiming longer term to have a Coho production, which is about maybe 20% to maybe 25% of our production in the middle of this decade.
Four is that the summer condition in 2022 was challenging for the reasons Manuel mentioned, particularly with the oxygen and some incidents of algae. It was a lot better than 2021. This autumn in 2022 is evolving very, very favorable for us for our biomass. We should recover the volume that we did not get in the first quarter in this quarter, second, and the next third. Cost will follow that pattern, as we leave behind algae blooms of 2021 and the oxygen condition that Manuel mentioned in the first quarter. We certainly, and we reiterated our guidance that the cost will getting to more normal levels in the second and third quarter.
Finally, this good condition of the biomass in the second and third quarter, as we expect, will help catching up the volume to end up, as we said, in the 51,000 metric tons-54,000 metric tons of harvest for 2022. We remained committed to our plan of reaching 65,000 metric tons-70,000 metric tons between Atlantic and Pacific salmon by year 2022, 2024, 2025. With that, we can see some of the questions that we have. I will read it. Yeah. Thank you. Question number one, do you project that the profit of the Chilean industry will continue in 2023-2024 given the high demand and the lower supply? My view is that that's the case. Supply will be very limited in the coming years.
There is some regulatory discussions in Chile, and I don't think that there will be room for growth from Chile. And also Chile is very committed to reduce the use of antibiotics, which means that there will be some time for the operations to get the final solution of that situation before they jump into higher growth. Very limited growth, if growth at all, from Chile. Despite the macroeconomic condition and the global aggregate demand condition in the world, we believe that salmon has continued to gain plate share in the consumer's mind and in the consumer's menu, both at the retail level and at the food service level. That is what the data is telling us.
Therefore, despite overall aggregate demand being weaker in the quarters to come because of the macroeconomic condition, inflation, monetary policy, tight monetary policy and so on, we believe that our product will behave from a demand standpoint, quite healthy. Second question is, what do you think of the statements of President Boric in Chile about prohibiting aquaculture concessions in protected area? Very good question, and I will answer very quickly. With the years, I tend to see more the politicians' actions more than what they say. I tend to believe that it's better to see their actions rather than what they say. Therefore, we will wait until the policy is on the table and discuss.
I don't think that the salmon farming in the Chilean ocean contains any threat for the environment. I think that we are very compatible with the care of the environment, and it may take us some time to convince politicians that that's the case. Next question is, how do you see the harvest weights in April and May in autumn, and if we should expect a recovery in the average kilo of Atlantic in the second quarter. The answer is very clear. Yes.
We will certainly see an enhancement of the average weight, an enhancement of the cost, and also an enhancement of the price as we have more volume, and the prices in the second quarter, at least, in April and so far in May, is very high. Certainly an improvement in the second quarter. The next question is the lower harvest weight revert in this. Yes, the same question as before, we certainly will revert that. We Manuel, you mentioned how big is the recovery in the second quarter.
Yes. Yes, we will have a recovery. The main reason of the first quarter was one very particular site with oxygen situations that prevent us from feeding that particular site. That site is completely harvested in March, so in April, May, and June, we are harvesting sites with a very good growth performance, and we will increase the average weight and also the volumes. We will capture a larger fraction of the spot prices that are very high in the second quarter.
Next question relates to insurance, and the question is, will insurance company cover the mortality experience during first quarter of 2022? The answer is no, because the extraordinary mortality incidents were relatively marginal and therefore were below the deductibles. That's why we did not have an impact on the non-operational P&L of the company for the quarter. It was a rather small incident. The issue of the first quarter was not mortality, as Manuel mentioned, but rather the lack of growth in one farm site.
Correct.
That gave us lower harvest weights. Could you give us some guidance on Coho price and market supply? Coho price is certainly better. Manuel, would you add something to that?
Yes. One thing that is very important in Coho, for this particular season that ended in March, is that we opened new markets. We reduce the exposure to the traditional markets and the traditional formats, I mean, mainly Japan and head-on, and we increase the share of the value-added, mainly fillets, to the American market and also to the Mexican market. Because of that, we obtain a better price achieved than in Coho. Also, we increase a lot the average weight of Coho. We harvested at around 4 kg. We were able to produce value-added with a very good yield.
Next question, relatively related. How large cost improvement do you expect in the second quarter, of this year compared to the first? Also related to that is, what is the cost we should expect for the rest of the year? There will be a reduction. I would like not to give a specific number because we have not closed yet the quarter. Going forward, we envision a better situation for us, a reduction in the cost for the remaining part of the year. We have stable volumes during the next three quarters, and that will help the processing plant. We also have more volume and therefore being able to catch up more on the price. That gives extra room for the EBIT kilo.
The cost will certainly, as Manuel mentioned, has had an inflationary pressure that we see on the feed ingredients. That means that we are paying about 30% more on the feed cost than a year ago, and that will continue, in my view, during the remaining part of the year. That would put some pressure on the cost. Since we leave behind the incidents of 2021, the algae bloom incidents, because we already harvested all the fish from those farms, and the environmental condition of the ocean has been very favorable in the autumn and likely in the wintertime, we envision that the coming harvest would come at a lower cost than the first quarter. How much less?
I leave it for the next earnings report meetings. Should we expect similar amounts of investment in the coming quarters in technology and moving operation to the Aysén region? Should we expect increments in processing cost? Manuel?
Yes, sir. We are in the middle of the process of the CapEx program to reduce the risk and to move some concession to some more less exposed areas. In the first quarter, our cash flow for investing was $14 million. For the full year, the plan is $36 million.
An important reduction.
An important reduction.
Quarter by quarter.
Correct.
Very well. I think that these are all the questions we have. It's 45, 40 minutes. If there's no other question, then thank you for attending. We'll see everyone on the next earnings report. Thank you very much.