Mowi Asa

Good morning, everyone, and welcome to the presentation of Movi's fourth quarter results of 2022. My name is Ivan Mindheim, and I'm the CEO of Movi. And with me today to present the financial figures and fundamentals, I have, as usual, our CFO, Kristian Erlingsson. And after the presentation, our IRO, Kim Dresvik, will routinely host a Q&A session. For those who are following the presentation of webcast, you can submit your questions or comments in advance or as we go along, by email. Please refer to our website at movi.com for the necessary details. Disclaimer, I think we leave for a self-study as usual. Then we are ready for the highlights of the quarter. A quarter that marks the end of a record high year for Mowi financially with operation revenues totaling 4.95 billion euro and operation profit of 1,005 million euro or 1.0 billion euro if you like. This is an historic moment for us as it's the first time in Mowi's close to 60 years history across the one billion euro mark in operation profit. There are tens of millions of hours of hard work behind this achievement, so a big thank you to all of my 11,500 colleagues in 25 countries who have made it happen. It's, of course, much appreciated. For the fourth quarter only, Mowi recorded an operational revenue of 1.36 billion euro, which was also record high. And operation profits came to 239 million euro, second best fourth quarter to date on seasonally strong prices, I would say, driven by a reasonably good demand and a modest supply, actually a global supply contraction of 2% year over year, at least before we adjust for inventory movements. Including inventory movements, supply was stable year over year. For this sake, an operational profit of €239 million is also in line with the trading update of the 16th of January. Furthermore, blended farming costs, i.e. weighted farming costs for six farming countries, was €5.25 per kilo in the quarter, and that's relatively stable compared with the third quarter. Year over year, however, cost is significantly up due to inflation, and then first and foremost feed inflation. And we expect a slight increase in release from stock cost in the first quarter due to this, in addition to a seasonally lower dilution of costs because of lower volumes. The underlying inflation we have witnessed over the past 18 months is unprecedented, so hopefully 2023 can offer us some tailwinds on input costs. Time will show. In terms of farming volumes, we harvested 131,000 tonnes in the quarter, which was slightly above the guidance of 127,000 tonnes, adding up to 464,000 tonnes for 2022 in total. For 2023, we expect to harvest record high 484,000 tons, which is equivalent to a growth of 4.3% year over year. As late as in 2018, we harvested 375,000 tons in Moe, which means we have grown our farming volumes by as much as 109,000 tons over the past five years, or 5.2% annually. This is above market growth, and our clear goal is to continue to capture market share in the salmon category by growing our farming volumes in the coming years, both organically and acquisitively. Because farming volumes are, in the end of the day, the mainstay of our business model. That's what everything hinges on in this industry. And the demand for more salmon seems to be good. Otherwise, it was with great pleasure or Moe was once again ranked as the world's most sustainable animal protein producer by the prestigious Color Fair. This is the fourth year in a row, and as we have said numerous of times, sustainability is deeply ingrained in the Moe culture and at the heart of everything we do. So this is more definitely a recognition we sincerely appreciate internally. And personally, I must say it's very humbling to be allowed to lead such a company and organization that excel in this way in this important field. And speaking of pleasures, it was also with great pleasure we just before year-end received the approval of our acquisition of 51% of the shares in Arctic Fish, one of the leading salmon farming companies in Iceland. We have a separate slide on Iceland later in the presentation, so I think we leave it at that for now. When it comes to other divisions, consumer products, our downstream business has delivered another great set of great results in the quarter, which runs off a record high year for consumer products with an operational EBIT of 112 million euro on 229,000 tons product weight. This corresponds to a return on capital employed of solid 16.5%. Our feed division can also put behind its best year-to-date in operation EBITDA of 47 million euro on 517,000 tons of feed, which is equivalent to a return on capital employed of satisfactory 13.1%. Feed performance was also strong last year, the fourth quarter included, which is of course of utmost importance to us by virtue of being the world's largest salmon farmer. However, notwithstanding all these records, everything is so far from rosy in the salmon universe, at least in the Norwegian, not in the Norwegian part of it, at least. And then I'm thinking of the cataclysmic event of the 28th of September last year when the Norwegian left-wing government proposed to raise the tax level from 22% to unsustainable 62% on Norwegian salmon farming, or about 80% with Norwegian wealth tax. Such a tax level is completely unprecedented in a global aquaculture industry and would impose major limitations on future growth and development of the Norwegian salmon industry if it's put in action. The public consultation response process ended on the 4th of January, but as expected, expected massive resistance to the proposal among the majority of the respondents. As many as 8 out of 10 are against it, from professors to small farmers along the Norwegian coastline. So there is no lack of warnings of the negative consequences of this tax proposal. Everyone looks out for their own interests, of course, but even many of the municipalities, the main beneficiaries of this tax, at least according to the government, are skeptical as they fear the havoc it will wreak on current and future jobs in their local communities, which I think is well-founded. If this will make a difference, it's a novel story and remains to be seen. Now the political process has started, and we will, for our part, continue to work with all levels of Norwegian politics and organizations to try and turn this, in our view, anti-business proposal into a viable framework for the Norwegian salmon industry also going forward. With regard to timetable, we do not expect to have a clarification until after Easter, at least a formal clarification, and most likely not until close to the summer. Last but not least, the Board of Directors has decided to distribute a quarterly dividend of 1.70 NOK per share after the fourth quarter, which compares with 50% of underlying earnings per share, and as such is in accordance with our dividend policy. That, I think, does it for the highlights for the quarter. Turn over to key financials. Christian will, as usual, go in depth on financial figures on his session. So to not disrupt the course of events, we'll just touch briefly upon the most important ones now. And first, turnover. which we already have been through when we recorded an operational revenue of 4.95 billion euro in 2022, which was record high and up by 80% year over year. Underlying volumes were quite stable last year across our business, so this is mainly explained by good market conditions and higher prices for all our divisions for the fourth quarter only when we recorded an operation revenue as said of 1.36 billion euro which is also record high and by coincidence up as up by 80 percent as well year over year Operation EBITDA, €1,005 million, we have already commented on, also high by a wide margin and almost double compared with 2021. As we addressed in the highlights, we have grown our farming volumes extensively over the past few years, which we capitalized on to the full in 2022 when the prices finally came back in euro after two troublesome pandemic years where we, as a euro company, did not benefit from the weakening of the NOC, contrary to our Norwegian peers. Cash flow in the quarter was highly impacted by tie-up of working capital and capital expenditures, in addition to closing of the Arctic fish acquisition. And net interest-bearing debt came in at 1.76 billion euro. Excluding Arctic fish, net interest-bearing debt would have been 1.51 billion euro, and adjusted for temporary build-up of working capital, it would have been below a long-term debt target of 1.4 billion euro. In the case of the latter, we will revert to a long-term debt target when we know the outcome of the Norwegian tax process. I think that's enough about cash for now. We'll get back to further details later. Otherwise, equity ratio was of half to 49% at the end of the year, and underlying earnings per share was 1.43 euro for a year and 33 euro cent for a quarter. And finally, annualized return on capital employed was 24% for a year and 20% for a quarter, both well above a long-term target of 12%. In terms of region margins through the value chain, Norway stood once again out positively, whereas our operations in the British Isles were disfigured by another biologically challenging quarter in the aftermath of a record warm summer. We will get back to the explanation shortly when we go through the various business entities. But first, briefly about prices. As already said, we saw seasonally strong prices in the fourth quarter, which have continued into the new year on a reasonably good demand and on a modest supply. Compared to the fourth quarter of 2021, reference price was up by 17% in Europe. up by 7% in the Americas for salmon of the Chilean region. For salmon of the Canadian region, the reference price was up by 10% in the Americas in the quarter year-over-year. Pristyn will elaborate more on prices and supply demand under his session. Then quickly about our own relative price performance. Overall price achievement was good for Maui in the fourth quarter and on or above the reference price for all our fish apart from Canna East where we harvested out some Isar fish in the quarter. So Perisher was also good in the fourth quarter. Then briefly about the EBIT waterfall. As we can see from the graph here, operation EBIT increased from 146 million euro in the fourth quarter of 2021 to 239 million euro in the fourth quarter of 2022. This was mainly driven by increased earnings in farming as a result of higher prices and volumes partly offset by higher costs. But also the other businesses contributed positively this time around with strong operation performance and results across the board. Then it's time to address the various business entities, and the first one out is, as usual, Moe Norway, our largest and most important entity by far. Appraisal EBIT was 198 million euro for Moe Norway in the quarter, which is the third-best quarter to date, at least according to my records, and up from 125 million euro in the comparable quarter of 2021. EBIT margin was €2.28 per kilo in the quarter versus €1.76 per kilo in the fourth quarter of 2021. As the graph clearly demonstrates, this was caused by higher prices and volumes, partly offset by inflation and, first and foremost, feed inflation. In terms of biological performance, it's improved in the quarter year-over-year and also for 2022 as a whole. And by extension, I think it's fair to say that MowiNorway has been on a formidable journey over the past few years. As the graph here shows, we harvested 210,000 tons in MowiNorway as late as in 2017, which is record high. 294,000 tons in 2022, which means we have grown our farming volumes in Norway organically by as much as 84,000 tons over the past five years, or 6.9% annually. And by that, putting Norway towards the top of license utilization and production efficiency in Norway, which in turn has laid the foundation for the record high results we saw last year. So a big thank you to our Norwegian farming organization for this achievement. It's highly, highly appreciated. Then the breakdown of the margins for the different regions in Norway in the quarter. Region North stands once again out as the margin winner with 2.65 euro per kilo on lowest cost and on strong price performance. But neither Region West nor Region South were far behind this time around with margins of 2.35 euro per kilo and 2.21 euro per kilo on good operation performance, I would say, taking into consideration their geographical location. Region Mid, on the other hand, was lagging behind in the fourth quarter with a soft margin of 1.47 euro per kilo, adversely impacted by harvesting 50% of the volumes in October at seasonally low prices in addition to more issues than normal last year, in particular sea lice. Otherwise, it deserves a mention that both region north, region west, and region south harvested record high volumes last year. And all our entities in Norway recorded record high results, which is, of course, great. than our Norwegian sales contract portfolio. In 2021 and 2022, we deliberately decided to keep our contract level low for our Norwegian volumes to capitalize on the expected post-pandemic market recovery. In hindsight, I think we can safely say that this strategy has served us well. For 2023, we have decided to keep our contract level relatively low as well, at least so far. partly due to uncertainty related to the Norwegian tax scheme, at least initially, but also due to our skewed harvest profile. In terms of contract prices for 2023, they are significantly higher than last year. Then it's time to address the other farming countries, and the first one out is Mowi Scotland. The fourth quarter turned out, unfortunately, out to become another biologically challenging quarter for a sorely-tried Scottish organisation, now with issues with SRS, Salmon Rickettsil Syndrome. Normally, a low virulent bacterial disease in these waters, which changed in the fourth quarter, probably triggered by an unusual warm summer, actually the warmest on record, and huge issues with micro jellyfish, the Mygia atlantica, which did not only cause elevated mortalities, but also a weak fish health in general. Against this backdrop, MoE Scotland recorded a soft operation profit of 7 million euro in the quarter, or 67 euro cent per kilo. Volumes have also been impacted by this, a total 10,000 tons for the quarter and 48,000 tons for the year, both on the weak side. On a positive note, however, cold waters have done wonders for the fish shelf in Scotland, and by extension, we have harvested large-sized fish so far in the new year, which should prepare the ground for improved KPIs. Knock on wood. Then Chile. More in Chile, so increased earnings and margins year-over-year in the quarter on higher prices and volumes, partly offset by higher costs for their part as well due to inflation. In terms of numbers, Operation EBIT was €20 million in this quarter versus €11 million in the comparable quarter of 2021. And margin was up from €0.64 per kilo to €1.08 per kilo. Volumes are also up, as said, from 16.5 thousand tons to 18.5 thousand tons. In general, both production and biology were reasonably good for our Chilean operations in the fourth quarter. Then following off to Mowi, Canada. Mowi, Canada turned a profit of 60 million euro in the fourth quarter against a breakeven result in the fourth quarter of 2021. This was driven by higher prices as well as cost increased year over year for our Canadian operations too due to inflation. Volumes, however, were stable, 11,000 tons versus 10,000 tons. In Canada West, we achieved a strong operational profit of €21 million, or €2.15 per kilo, which is a significant improvement from €8 million or €1.07 per kilo last year, or in the fourth quarter of 2021. As far as Canada East is concerned, we harvested very low volumes in the quarter. On top of that, they were related to harvesting of ISA fish at high cost and low prices, in addition to low dilution of cost after low volumes. In terms of overall biology for Canada yeast, it has improved compared with previous years, from which we expect to start gradually benefiting in 2023. I guess I should add knock on wood to this one as well. Then our two smallest farming entities, Mowi Island and Mowi Faroes. For salmon of Irish origin, we made a loss of €3 million in the quarter, following issues with SRS, as in Mowi Scotland. We also expect a weak first quarter due to this, in addition to other biological issues last year. Our biomass in sea is low, and we will prioritize biomass growth going forward and take advantage of colder waters during the winter and improved fish health. Inifero's operation EBIT came to 5.5 million euro, positively, by means of a margin of 1.75 euro per kilo on 3,000 tons harvest volumes. Then our latest addition to the Moe family, Arctic fish. As already said in the highlights, it was with great pleasure we just before year end received the approval of the acquisition of 51% of the shares in Arctic fish, one of the leading Icelandic salmon farmers. Iceland is Moe's seventh farming country and was the last spot missing from our geographical footprint. Now we are looking forward to further develop the company together with the other owners and the highly competent and motivated organization. Iceland is namely one of the very few areas left that still offer extensive organic growth opportunities in conventional farming. And on top of that, Icelandic waters also provide excellent growth and living conditions for the salmon, which is key in this. For 2023, we expect to harvest 15,000 tons in Iceland. And in terms of reporting, we will start to report on the figures as from the first quarter onwards. The balance sheet is also already in our balance sheet. in our balance sheet, so I'm referring to the P&L figures. So much about Mowi Farming, then over to Mowi Consumer Products, our downstream business. Massive operational profit of 43 million euro in the quarter. In terms of overall demand, it was good in more or less all markets in the quarter. And we also see a reasonably good development in demand so far in the new year, notwithstanding the economic slowdown we are facing. Last one out, MowiFeed. I said initially this morning, MowiFeed can also put behind its best quarter to date with an operation EBITDA of 47 million euro and 21 million euro respectively, which corresponds to a return on capital employed of satisfactorily 13.1% for 2022. Feed performance was also strong in 2022, as said, the fourth quarter included, which is, of course, of paramount importance to us as the world's largest salmon farmer. In terms of volumes, we sold 149,000 tons in the fourth quarter and 517,000 tons for the year. And as is proper, I would like to commend our feed organization for these great results in what has been a challenging sourcing environment. Dan Christian, the floor is all yours for walking us through the financials and fundamentals. Thank you so far.

Thank you very much, Ivan. Good morning, everybody. Hope everybody is doing well. As usual, we start with the profit and loss. And this statement here shows group revenue increased year over year for both Q4 and for the year. The full year figure was a record high 4.9 billion euro following all time high achieved prices driven by a strong market and reduced contract share for Norwegian origin. Strong revenues and volumes and competitive costs gave a record high operational EBIT for the year. And for the quarter, at the same level as the third quarter. And we will go further into costs in a few slides. In financial EBIT, the fair value adjustment on biomass was positive on higher prices. Novasi, our associated company, where we are the largest owner with 49% of the shares, had an operational result of €2 per kilo. That was above the Norway region mid, but below the other regions in Norway, impacted by some biological issues and low rates. Net financial items, as expected, paid interests of approximately €12 million, in addition to unrealized accounting effects. Underlying apps increased in line with the operational EBIT. and return on capital employed annualized 20.3 for the quarter and 23.7 for the year driven by farming, but also strong return in consumer products and feed well above the 12% target. Cash flow per share impacted by working capital tie-up. We come back to that in the cash flow statement shortly. We then move over to the balance sheets. These numbers include a consolidation of Arctic fish, and that's the main driver behind the change from the third quarter. Maui's financial position is very strong, with a 52% covenant equity ratio. With regards to the cash flow and the NIBD, we see that the cash flow from operations was impacted by a working capital tie-up of €229 million in the quarter, mainly related to temporary build-up of working capital in sales and marketing, feed, and biomass in farming. Other investments include €180 million for the shares in Arctic fish, partly offset by dividends from NovaSea. Excluding the acquisition of Arctic Fish, NIBD would have been 1.51 billion euro, i.e. without the share purchase and the consolidation of their inhibit. As it looks now, we expect a net release of working capital this year in the amount of approximately 150 million euro, as many of the items this year have been of a temporary nature, including delays in the supply chain. Given the current information, we expect the release in the first half of the year of approximately €200 million related to accounts receivable, inventory, and effects on payables. When it comes to COPEX, the guiding is €370 million, including Arctic fish, with €30 million. With regards to the structural capex, this includes 70 million euro approximately in freshwater investments, including post-mold projects in Norway, which were already underway when the decision was made to hold back on expansion projects in Norway following the resource rent tax proposal. The same also with the ongoing Jyssenøya processing plant project in Norway. Also, Arctic fish has high investments this year in a new processing facility and also expansion of the smolt facility. With regards to the interest paid, this is expected to increase to approximately 70 million euro this year and taxes estimated to 175 million euro. If we look further into the cost situation, the backdrop is that we have been able to keep costs stable for the last five years until 2022. We see that indicated here also in the graph. A CAGR of 1.8%, that's less than annual inflation. Cost initiatives have offset the underlying cost pressure in farming. However, the post-COVID inflation impacted cost figures in 2022. But the entire cost increase of 62 euro cents can be attributed to inflation as biological performance has improved year over year. And the by far most important driver here is feed inflation as feed prices have increased significantly. But continued cost focus is very important. We need to combat increasing feed prices, biological measures, and more complex regulations as best we can. And we also would like to mention that we have a cost performance which is good relative to peers. We are number one or number two in the various regions we operate over time. And then with regards to the cost-saving program, we over-delivered on the targets we set ourselves for the 2022 program. The €48 million annualized savings we achieved last year were related to the productivity program, yield and efficiency, procurement savings, and other savings. And the accumulated annual savings since these programs started back in 2018 amount to €230 million related to various procurement, contract improvements, productivity, other savings. One example of the latter is that we achieved our target set for 2022 when it came to travel costs. We cut that by 50% compared with 2019 on avoiding unnecessary traveling and utilizing digital tools. We have initiated a new program now for 2023. This year it also includes energy savings. We target a 3% cut on annual energy usage in Mowi, amounting to approximately 28 gigawatt hours. And one important result of these cost programs, in addition, of course, to the P&L effect and the cash effect, is that we have built a more cost-conscientious organization, cost culture, Our teams across the company have a stronger cost culture than what was the case some years ago. And we think it's important to maintain this focus and continue to monitor and to follow up and to seek various improvement all across the value chain. When it comes to the productivity program, this is, of course, an important part of the overall cost-saving program, and salary cost is the number two cost item in our P&L, 613 million for the year of 2022. We are proud to have achieved a 9% FTE reduction end 2022 versus the start of the program in 2020. In this period, volumes have increased 6%. Don't forget that. So we have, in fact, increased productivity with regards to FTEs and volumes by 15%. But we believe it's possible to have a further reduction in FTEs now in 2023 by working smarter, utilizing automation, and right-sizing. And this will, to a large extent, be solved by natural turnover, as it's also stated here. Then we move over to fundamentals. First, sustainability. We have cut our CO2 emissions for Scope 1 and 2 by 9% the last year, as much as 33% reduced comparing with 2019. With regards to Scope 3, i.e. the suppliers and the value chain, We have, together with our partners, managed a 10% cut since 2019. That's a good achievement, I would say. In the end, Scope 3 emissions are the most important part of the total here. So we are progressing well on our ambitious long-term targets in MoE in this respect. And if you put this a little bit into context, have avoided 2 million tons also in 2022 annualized savings of CO2 compared with what had been the case if you replaced our proteins with a mix of other land-based proteins. So salmon is definitely on the right side of sustainability. We have a good starting point with salmon being such an efficient protein. But these results don't come by themselves. And we are proud that we have been ranked number one on the Color Fair Index now for the fourth time in a row. And we also have several other good rankings that's also reflected here on the slide. A large part of our financing is also green or sustainability linked, including the bank facility, which is the backbone of our financing in Maui. So we have linked financial performance to sustainability performance. The current mix is 81%, including Arctic fish, and the target is to be at 100% in 2026. We have very solid financing in place and we are comfortable with that and very good relationship with our core banks in D&B, Nordea, ABN AMRO, Rabobank, Danske Bank, SEB and Kredi AGK. Then the market fundamentals, starting with the supply developments in the quarter, adjusted for inventory movements. Then global supply was stable. So some additional comments to the supply situation. We saw that there were lower volumes than expected in Norway and Scotland in the quarter, partly offset by higher volumes than expected in Chile. In Norway, there was some early harvesting, lower weights, lower feed consumption than expected. Biomass in Norway, down 3% for the market versus last year. In Chile, more harvesting than expected, but biomass down also here, down 5% versus last year. And here we see that the supply to the markets was stable year over year. And it's also very positive, of course, to see that the prices and the value of the salmon consumed was up approximately 20% in Q4, and 2022 was a record year when it came to the salmon market, with consumption totaling 21 billion euro, up as much as 30% for the year. When it comes to demand and consumption, we see in Europe, food service continued to improve in the fourth quarter. Retail sales were higher than before the pandemic, but decreased from the high level seen during the last years. In the US, consumption increased by 8%, despite the very harsh winter weather in December. When we look at our own trading and consumer product figures in the US, we increased volumes by even more, 13%. So the numbers in the US were strong in the quarter. In Asia, however, we saw a consumption decline by 3%, higher than normal air freight still, and also limited availability of large-sized fish from Europe. So it has been a record year price-wise, and after a seasonal downward adjustment after the summer, we have seen a good development during the winter. And the blended euro price increase in Q4 was approximately 20%. And then with regards to the expected supply growth, with lower biomass in Norway and Chile, the expected supply growth for 2023 is on the low side, 2%. And in Q1, we are looking at the supply contraction of between 0% and minus 5%. So a constrained supply side going forward. When it comes to our own volumes, 2022 was another year where we not only reached our harvest volume guidance, but also over-delivered on the guiding we set. With regards to 2023 volumes, they now include Arctic fish estimated to 15,000 tons. Total figure, as we see here, is 484,000 tons for the year. In Scotland, we expect a volume recovery from a challenging 2022. We expect growth in Chile on overall good performance, while Canada West will be reduced following the loss of licenses in the Discovery Island area and also a site mix. Canada West is expected to be around 25,000 tons from 2024 onwards. And with the 484,000 tons harvest volume guidance, we have increased volumes by as much as 109,000 tons over the last five years, equivalent to 5.2% annual growth versus industry at 4%. And there is an intrinsic potential here to grow volumes well above 500,000 tons. Then it's over to Ivan for some comments on the prospects ahead of us.

Thank you, Christian. Much appreciated. Now it's time to conclude with some closing remarks before we wrap it all up with a Q&A session hosted by our IRO, Kim Dusvik. As already said, the fourth quarter marked the end of a record high year for Moe financially with operational revenues totaling €4.95 billion and with an operational profit of €1,005 million. It is, as I said, a historic moment for us as this is the first time in almost close to 60 years history we crossed the magic 1 billion euro mark in operational profits. And further to this, I think we must say that 2023 has started off on a good note with reasonably strong prices so far, on a reasonably good demand and a modest supply. How this will develop further on the The demand side, no one really knows, of course, including ourselves, but normally the salmon fares well in challenging economic times. And the supply side looks supportive with an expected global supply growth of as low as 2% for 2023, according to Contali. So, in other words, a good start to the new year. Having said that, and as addressed earlier this morning, everything is though unfortunately far from rosy in the salmon universe, at least not in the Norwegian part of it. Because the Norwegian government's infamous resource grant tax proposal is hanging over us all and cause a dark cloud of the future prospects. for the Norwegian salmon industry going forward. An unprecedented tax level of 62% or 80% with Norwegian valve tax is simply not sustainable and would impose major limitations on future growth and development if it's put in action, and thereby cause irreparable damage to current and future jobs in their thousands along the Norwegian coastline. Because the additional billions of NOC going to resources and tax payments going forward will not be replaced by external capital infusions and therefore deteriorate our and the industry's investment capacity. There is no such thing as a free lunch, not here. either and i must admit that it really puzzles me that the norwegian ministry of finance in all seriousness appear to believe that this tax proposal is neutral on future investments go figure or in norwegian for store dance on con nevertheless the public consultation response process ended on the 4th of january but i said massive protest from the majority of the respondents including many of the local municipalities So now the political process has started, and we will, for our part, continue to work with all levels of Norwegian politics and organizations to try and turn this, in our view, anti-business proposal into a viable framework for the Norwegian salmon industry also going forward. With regard to timetable, we do not expect to have a clarification until after Easter, at least not a formal clarification, and most likely not until close to the summer. So much about politics. In terms of full farming volume guidance, we expect to harvest, as Christian just showed us, 484,000 tons in 2023, which is equivalent to a growth of 4.3% year-over-year, double of the expected industry supply growth, and a continuation of the growth trajectory Christian just walked us through. Our clear goal is namely to continue to capture market share in the summit category in the years to come. And as you all know, in our industry, it's all about the farming volumes. Otherwise, a heads up on blended farming costs for the first quarter as we expected to increase slightly quarter over quarter due to seasonally lower dilution in addition to previous inflation. That being said, we hope to see a decline in cost to stock this year on falling input prices. That's at least our take as of today. And finally, the Board of Directors has decided to distribute a quarterly dividend of 1.70 NOK per share after the fourth quarter, which compares with 50% of underlying earnings per share and as such is in line with our dividend policy. Then I think we are ready for the Q&A session, Kim. So if Kristen can please join me on the stage.

So we have the first question from the web this time. Alexander Jones, Bank of America. He's got two questions on demand. The first one, can you give us an update on what you're seeing in terms of latest demand trends? And the second one in China. How do you expect China's relaxation of COVID curbs to affect salmon demand this year? And what do you believe is the long-term outlook for Chinese consumption?

Yes, so if we start with demand, I would say that prices have been good now for a significant period of time. We have seen, of course, we saw the seasonal decline following the summer last year, but the salmon has fared well during this autumn and this winter. And in the end, the best indicator of demand and the market is prices. And we continue to see good prices in the market. In the Q4, volumes and developments were good. As mentioned in my section, we saw that volumes were still ahead of pre-pandemic levels in retail and also good development in food service. And then we are in challenging economic times, so time will show how this develops going forward. But still, prices are good and development in the market has been good. And then when it comes to China, China is a market which which used to be around 5%, looking at the 2019 situation before the pandemic. Now it is significantly lower, I guess around 3%. There is a significant potential for China. We see still air freight rates. That is expected, of course, to improve at some point. We know that China is predominantly a food service market. There is significant potential for more home consumption. And we have our presence there. So I think Imove is well set to benefit from improving market conditions in China, which we, of course, expect now with the reopening over time.

Could you say something about the winter wound situation in Norway this year compared to last year?

Thank you, Knut Ivar, for the question. It's still an issue. How this evolved during the winter is a little bit early to say, but we already see signals of winter sores at the normal sites, or the usual sites. So most likely it will be an issue this year, but for Moe's part, I think we are doing okay so far. But again, still early days.

Just a question on the strong development in the consumer products market. Could you elaborate a little bit more on how you see the margins going forward here? Just based on how you see the demand developing going into Q1 and also just operationally.

As we said during the presentation here, so far it has been reasonably well. So there are no indications of a slowdown. But as Christian just said, we are in uncharted waters, right? So if this... turns into a recession and it becomes deep and also persistent, then this can change. But so far, I think we are good. It's just to look at our prices so far this year, and now I'm talking about 2023. It's amazing. It's fantastic. It's the best start of the year ever, at least in my time in this industry. So far, so good. But again, we are humble. So we are not wizards. We don't know about the future. So in general, it's about how does the world economy in general develop. And salmon is our global product. Food service has been fantastic after the pandemic. the pandemic. So that market has really come back at the expense, partly of retail, of course, because then people go out instead of eating home. But in total, as Christian showed, a really fantastic development so far. But again, who knows about the future?

We saw that you made some contracts now for first half 2023. Is the contract market more functioning now than it did a few months ago?

Yes, it is.

Is that because of the comments on achieved prices or is it something else from the politicians?

No, that's because, you know, the demand has been there all the time. The problem has been the supply, right? The farmers, including ourselves. But with the statement we have heard from the government, we take it for granted that the norm price will not be an issue at least this year when it comes to taxation. Beyond that, who knows? That's actually not decided yet. So challenging. But on a positive note, the salmon market is, or the salmon contract market is a one-year contract market. So this doesn't really impact our operation anymore.

And your net debt target, is that something you're looking into post-acquisition of Arctic fish?

Well, I guess you should ask the CFO about that. So...

Yeah, so I think it makes sense to now see what happens with the resource when in tax situation. We have some clarity on that, hopefully in a reasonable amount of time, and then we come back to that after that.

Martin Karlan, ABG. It sounds like we have had some notable issues in central Norway. At the same time, costs into Q1 are only guided slightly higher, volume guidance largely unchanged. Does that imply that the other regions in Norway are performing so much better, or is the situation also better in central Norway going into Q1?

I think in relative terms, mid has had or had more challenging last year than the others, as you say yourself. And now we are six weeks into the new year, so a little bit early to conclude on 2023. But nothing has changed, really. So it's the same pattern now. But In this industry, you have a bad year and then all of a sudden have a good year. So things fluctuate. So I don't think necessarily 2022 will be the new standard for mid-Norway going forward. At least I do not believe so. You have normal fluctuations in this. So overall, I think, and I said it during the presentation, moving over, we had a fantastic year. So I think this must be, at least relatively speaking, the best year so far in our history. And in absolute terms, it's absolutely our best year. It's just to have a look at our numbers. And so far, we are doing fine. But again, six weeks into the new year, it's still early. Welcome. Welcome.

Questions? No? So that concludes the Q&A session.

Right. Then it only remains for me to thank everyone for the attention. We hope to see you back in May, all of you, at our first quarter release. And meanwhile, take care and have a great day ahead. Thank you.