Good morning. We are now reporting the third quarter earnings of Salmones Camanchaca. Together with me is Manuel Arriagada. We expect in the next 30 minutes, 35 minutes to go over the earnings, the report that was reported yesterday. The agenda for today is similar to previous reports, with one other item at the end, which refers to the capital increase that the company is undergoing now. One of the key highlights of this quarter, I believe that in the context of the incidents that we have had in the early part of 2021, in reference with the summer blooms that we experienced, I think that the quarter clearly signal a recovery from that moment.
We saw a very positive recovery of both earnings, revenues and earnings, as we will cover in this report. Price achievements were particularly strong in the quarter for reasons that we will cover, where we also leveraged our value-added strategy in the main and core markets, yeah. With the recovery also on the volumes sold, processed and sold, processing costs, which were somewhat high in the previous two quarters, came back to below the target that we have for long-term. Finally, the other highlight is the capital increase of about $30 million, which is aiming to reduce the risks that we face in the fjords and provide more stability for the company in the years to come, yeah. I think that these are the highlights of that, of this quarter.
On the financial highlights, I think that it's worth mentioning that despite the fact that the revenue were about 30% below the same quarter of 2020, that is the third quarter in the previous year, it showed a recovery of almost 50%. 50% increase with respect to the previous quarter. That is the second quarter of this year. That's an important recovery volume in this quarter vis-à-vis the previous one. Also, revenue grew by 19%. That's very strong, and this is mainly attributable to price increases, as we will see. The other, I think, highlight of this slide is that the EBIT showed a very positive recovery within the quarter.
We still have a slightly negative, marginally negative EBIT in the quarter, but if you double-click within the quarter, we saw a positive EBIT in the month of September. If we also would isolate a reclassification of a loss of $2 million that was booked on other operational or non-operational loss, which refers to the deductible of an insurance that we had in early 2021 due to the bloom, the EBIT was positive, as we will cover during the presentation. We see here volume, ex-cage cost, and EBIT per kilo. The quarter shows a continuous recovery throughout the month of July, August, and September.
Gradual increase in harvest volumes, stronger price realization, lowering costs, both farming and processing, which signal that within the quarter, although you may not see the full number in the total quarter, it was clearly a turning point in the month of September. The cost evolution was mainly due to the fact that all the Reñihué Fjord sea sites were fully harvested in the early part of August. These higher cost farming sites were completed about within the half of the quarter. Let me hand it over to Manuel to go over the operations within the quarter.
Good morning. I will cover the operational review. First one is the evolution of the live weight ex-cage cost. As you can see in the graph, remember that the algae incidents that we had since the end of 2020 until April this year affected all 7 sea sites that we have at the fjords in the Comau Fjord and also in the Reñihué Fjord, with ex-cage live weight cost implications for all 2021. In particular, the 3 sites of the Reñihué Fjord were harvested in the second and third quarter of 2021 and were impacted by poor feeding conditions, high mortalities, a very low average weight. This situation, of course, impacted the ex-cage costs of the second quarter and third quarter of this year.
Even though that the live weight cost improved to $4.18 per kilo in the third quarter and it is a reduction compared to the previous one. In the last quarter of this year, Q4, the cost will still be impacted by the Comau Fjord sites that will be harvested in that quarter. Now, we are starting a normal and gradual normalization of the cost, and we are going to see a more normal performance since the beginning of the next year. It's important to say that also we are having some feed ingredients increases in the prices that are pushing the live weight cost, as the vegetable ingredients mainly are following the price increases of several commodities.
The feed cost in the third quarter of this year increased by 60% compared to the same quarter of the previous year, mainly because of the prices of the vegetable oil and other ingredients in the feed. In relation to the total cost, that is ex-cage plus processing. The processing cost, as you can see, significantly reduced from previous quarter, mainly due to the increase in the processing volume from our own harvest and also due to raw material that we bought from third parties. The processing cost is getting back to the normal level of our target of $1 per kilo WFE, mainly because of the high processing volume despite the higher proportion of value-added. We reach an historical record in the quarter of 90% of value-added, including fillets and portions.
We envision that our processing cost will be in line with our target in the last quarter of this year and the same for the next year. As we mentioned, the total finished product cost is still impacted by the ex-cage cost, of course, and we will see a normalization in 2022. The volumes. We increased the volume in the third quarter to 9,500 tons, but it still is a very low volume if we compare with the same quarter of 2020. It's a 30% reduction compared with the third quarter of last year. In the last quarter of this year, we are harvesting a volume of between 15,000-16,000 tons. That represents 40% of the total harvest of the year.
The total volume that we will harvest this year will be in the range of 40-41,000 tons of Atlantic. Our stocking program is in line with our budget. In relation to the industry, it's important to say that the year-to-date stocking in 2021 is up 11% compared to last year and 7% compared to 2019, that is the comparable year in terms of the size. Biology. In the third quarter, the site closure mortality, as you can see, we closed two sites from the Reñihué Fjord, heavily affected by poor feeding conditions, high mortalities, and very low average weight. The mortalities was very high, 23.4%.
The good news is the overall biomass mortality, that is the living one, living biomass, returned to more normal levels, in the range of 1% per month. Of course, because of the situation of the Reñihué, the yields, that is the productivity, is very low, kilos per smolt, and also the average weight at 3.7 because of the feed, the poor feeding conditions because of the algae blooms. In terms of sustainability, also the same situation in Q3 2021. Closed sites from the Reñihué Fjord affected by the algae. So, we increased the number of the antibiotic treatments and the antibiotic usage compared with 2020, the previous year, third quarter.
If we compare with 2019, that is 2019, that is the comparable year, you can see a reduction of 15% in the antibiotic usage. That is important. We are increasing the use of anti-parasite pharma solutions to keep sea lice under control.
Thank you, Manuel. It's worth mentioning a few developments on the market, particularly in the North American market, where the company sells about 65% to maybe even 70% sometimes between the U.S. market and the Mexican market. In that market, in the U.S. market, the food service segment is experiencing a very strong demand. Certainly, certain supply disruption from Asia in the seafood imports, which are benefiting the Americas producers, such as Salmones Camanchaca. Just to give you a few examples, in terms of numbers. Grocery sales in the U.S. supermarkets in September were 20% growth versus 2019, prior to the pandemic. They were in September 9% above September 2020, in the middle of the pandemic.
10 months in a row growing at double digits, the grocery sales in the U.S. market. The expectation for 2021 is that the growth will be about 5% with respect to 2020, a year where supermarket sales were very strong because of the food service closures. The conclusion of this is that the food service reopening in 2021 are not declining retail sales. That is very important because it shows consumption pattern changes in the U.S. Seafood is up 32% this year with respect to 2019 in the food service. Largest market share increase in the food service. Very strong frozen sales in the supermarket. Food service with respect to 2020 is obviously much larger, but also now is larger than the pre-pandemic time.
The conclusion is that Americans are not eating more at home, buying more in supermarket, but also they are eating more than the pre-pandemic level at the restaurants, which implies a much larger per capita consumption of seafood and particularly salmon, very strong within seafood. The Chilean salmon product is getting more and more stronger positioning in the U.S. as the Chilean Salmon Marketing Council developed and unleashed its marketing strategy for the third consecutive year. We also see very positive prices, very strong prices in China, in Russia, and in Brazil. This might be a consequence of lower average weight in general in Chile due to the summer that we had.
Finally, good news is that the Russian market reopened for some companies that were closed in 2020, as well as Salmones Camanchaca, where we are now selling back in the Russian market. Manuel?
Okay.
To cover this.
Yes. In relation to our Salmones Camanchaca price achievement, it's very important to say that finally, we were able to catch up on price achievement during this year after eight months affected by lower volumes. During 2020, the price achievement was very strong, as you can see in the evolution, mitigating a very weak market condition, proving that our strategy works as an insurance that provides extra return on weak price context. During this year, we have seen a very important evolution of the price achievement. During, especially the last part of this third quarter, the contract renewals and also the larger harvest volume allow us to have a much higher prices than in the first and second quarter of this year. We expected to continue to do so in the last quarter of this year also.
Market and product distribution, the American market remains the number one market, with 65% of the sales of the quarter, followed by the Mexican market. Both markets, American and Mexican, with a very important and significant increase compared with one year ago. Also, we have been producing with a significant increase in the value-added, especially in portions, as you can see in the evolution. Almost 50% of the production in portions. Compared with Q3 2020, that is almost half. The marketing strategy in pandemic and also post-pandemic has been, first, to focus on our core markets, leveraging our long-dated relationship and strong positioning in the American and Mexican market, first. Second, to increase the value-added products and particularly portions, reaching up to 90% of value-added in this third quarter.
Finally, it's important to say that we started again with Russian sales that accounted for 6% of the total sales of the quarter. Yeah.
Thank you, Manuel. On the financials. This was a quarter with light and shadows. Because as you can see here, we have a much higher cost than in the third quarter of 2020 for the older reasons that we've already known. On the other hand, we have a much brighter environment on the market and the price. What I believe is more important is that the recovery of the third quarter compared to the second quarter of 2021 was significant, and it signals a turning point in our early part of 2021 progress. As you well know already, the cost of goods sold were heavily influenced by the Reñihué incidents and the fact that during the quarter, we completed the harvest of those fish from the fjord, and therefore, getting better after we complete that.
However, going forward in the fourth quarter, as Manuel mentioned, there's still going to be some impact on the cost side because of the Comau Fjord incident in April 2021, which had harvest in the fourth quarter of 2021. Don't expect costs to be normal in the fourth quarter, but rather I would say within the first half of 2022. In addition, during the quarter, we have a $1 million impact of an SRS incident in the Reñihué. Also worth mentioning, during the quarter is a positive contribution of the [inaudible], which is now, as we speak, in the process of being harvested.
Mm-hmm.
Therefore, you will see in the next quarter report the outcome of that which looks better than in 2020 due to prices and cost. What can I say in addition to what EBIT told us on the P&L? Well, I think that the recovery of the EBIT within the quarter, and a fair value, which shown a positive evolution on price, volumes, and costs going forward, meant that there was a positive or a profit of 4.6%. It's $4.6 million, which is about $14 million higher than the loss of 2020. Again, the fair value, although not part of the EBIT or the EBITDA, it's signaling a positive environment in the months and quarters to come. With that description of the quarter, let me touch slightly on the capital increase.
The capital increase was approved by the extraordinary shareholders meeting held in October 18. That is within the fourth quarter. The takeaway of that is that the company faced substantial price impact due to the pandemic in 2020 and early part of 2021. It also faced a very important and material impact due to the bloom explained by the driest and sunniest summer in 60 years in the south of Chile in 2021. What did it meant? It means that the equity of the company was cut by about $55 million. That is about 25% of the equity pre-pandemic, and therefore, the shareholders of the company considered it that it was worth adding some additional capital to face the future.
This capital increase will help us recover in 2022 and 2023, as well as reducing the risks associated with blooms in the tenth region, in the fjords, and recovery of the biomass. As said, the equity of the company declined $55 million between the fourth quarter of 2019 and the third quarter of 2021. That is the pandemic impact and the bloom impact cost around 25% loss of the equity, and that's the capital increase context. It also meant a slight breach in the equity ratio covenant, which now is formalized and fully authorized by the lender banks, which have supported the company strongly over the last period and are looking forward for better results in the quarters to come.
With the capital increase, we will recover the ratios that are needed to comply with the lenders. In terms of the growth plan for the future, I think that the 2021 production is well explained, and you have already incorporated that into all the analysis. In 2022, we will recover the biomass and execute a partial transitioning from the tenth to the eleventh region, harvest stockings and harvest, and we will be back in terms of total production to the 50-55 thousand metric tons by 2023. In 2022 and 2023, adding Atlantic and the Pacific salmon production. Long-term goal and capacity is kept at 65-70 thousand.
The timing when we will achieve that is obviously dependent on the execution of the transition from the tenth to eleventh region, the inclusion of new equipment and technology in our new sites, as well as the market environment. We envision that by the middle of the decade, we'll be utilizing the full capacity of the company. I can visit the last slide about the extraordinary investments. Obviously, in 2021, due to the context that you already know, we were somewhat conservative in our investments and they were lower than we anticipated. For 2022, we envision about $20-$25 million to recover the biomass loss and the equipment technology and transitioning from tenth to eleventh region. That is behind the capital increase that you have already known.
Complete within half an hour. A summary. In EBIT is certainly not good, not well. Most important than that, which is a forensic analysis, is that within the third quarter, there was a turning point. We get back to positive numbers, and the fourth quarter and 2022 looks much brighter than the early part of 2021. That's our clear takeaway of this presentation. Second is that the demand is very strong. The recovery of the demand after the pandemic, the reopening of the food service, the restaurants, the hotels, not only now are larger than pre-pandemic, but also the retail market has not declined as we might have anticipating. Therefore, the seafood consumption per capita, and particularly salmon, is much higher than the pre-pandemic. That, in our view, is a structural change in the consumption pattern.
Cost was not good during the quarter, but it was a lot better than the second quarter, showing again a signal of recovery and normalization. Cost will not be as good as we expect or as good as we like in the fourth quarter because of the consequence of the Comau Fjord that is old news for you. It will normalize in 2022. We see very positive developments on the capital increase. The process is fully underway. We expect to be completed within December, and we are welcoming the decision of the controlling shareholder of Salmones Camanchaca, who has indicated that it will subscribe and pay the entire pro rata of the capital increase. That is about 70% of the total capital increase.
We expect, as I said, this to be completed and fully executed within the months of December. That is in about a month or a month and a half. By 2022, we see an important recovery in volumes between 15%-20% recovery from 2021. Therefore, we are delighted to finish this 2021 and embrace the brighter future in 2022. Thank you very much. Daniel Bortnik, the CFO, do you have questions from attendees?
The first question came from Antonio Wittman. I would like to know what are you expecting for prices going forward for Q and also 2022?
We would certainly like to have a crystal ball for 2022 in terms of price, but everything points now to stability. I wouldn't say surprising, but certainly welcoming. We have had almost two months of very, very stable price at a much higher level than any previous year for the month of August, September and October, which are not strong months, seasonally speaking. We see very stable prices. That indicates that as the year ends and as the new year comes, particularly in the second quarter, the prices should be higher than now. We see very positive, but stable prices.
From the supply side, what we are expecting is that the growth on supply is not going to be more than 5% to maybe 6% globally in the salmon market next year, indicating the strength of the regulations in general in Norway and in Chile. Canada is somewhere down for the incidents that you all know.
Next question come from Carl-Emil Kjølås Johannessen. It is confirmed that it will be issued 12 million shares at $2.5 per share.
A good question. Yeah, a good question, Carl. I can say that the shareholders meeting have approved 12 million new shares issue, and I can say that the shareholders meeting have delegate into the board of Salmones Camanchaca, the exact number of shares that will be offered and the price at which they will be offered. I can anticipate or I can estimate that that decision of the board will be taken within the month of November. Therefore, we will communicate the terms and conditions, that is the number of shares and the price to be offered, as soon as the board takes that decision. Unfortunately, you need to wait, Carl Emil, I would say a couple of weeks to know exactly what are the terms.
Do you expect in 2022 to achieve your long-term cost targets, or you expect some negative impact from the relocalization of some sites?
We certainly will not show in our earnings report the renormalization of cost in the first quarter, and that's because part of the harvest of the fourth quarter of 2021, which are still affected by the Comau Fjord incident, will be sold in the first quarter. Not everything that has been harvested in the fourth quarter is sold in that particular quarter, but rather there is a lag on that. There will be some impact on the cost of goods sold in the first quarter. We envision that for the remaining three quarters of the year, it will be closer to the normal. How much closer? We'll have to await the development of 2022.
Do you expect any increase in sales to China going forward?
Well, China is not normal yet, as you all know. It's pretty close in several aspects. China will have to compete for the fish, and the other markets are very strong. The Americas market in general is very strong. That is the North American market, the Mexican, the Brazilian. The Russian market is also strong. They will need to compete. I don't think that in our share, China will be significant in 2022. Sorry, one more element on that response is that Salmones Camanchaca has a clear advocacy for value-added. China is mostly a market for the whole fish, whether fresh or frozen.
Therefore, unless we can find a way to sell value-added in China will remain for us a commodity market and that we will exploit that when the prices are good. It's hard for us in our strategy to commit to China on our value-added production if the market remains only whole fish. No more question? Well, thank you very much all. I hope to see you in the next earnings report, which will happen in the month of March. Before that, you will know from us in the success of the capital increase, yeah. Thank you very much, and-