Mowi Asa

Good morning, everyone, both in the room and online. Welcome to the presentation of Movi's second quarter results for 2024. My name is Ivan Windheim, and I'm the CEO of Movi. And the movie you just saw was from the opening of brand new state-of-the-art 100,000 tons primary processing plant at Jøssnøya in Hittra municipality in central Norway. A 72 million euro investment on time and on budget and with good value for money, I would say. So kudos to the organization for that. And not to mention 120 valuable jobs in coastal Norway, and yet another example of the salmon industry contributing to keeping coastal Norway alive and thriving, as we do in Scotland, in Ireland, in the Faroes, in Iceland, in Chile, and even in Canada and British Columbia, if anyone happens to believe otherwise. Otherwise, I have, as usual, our CFO Kristian Ellingsen with me today to help me with the financial figures and fundamentals. And after the presentation, our IRO, Kim Dresvik, will routinely host a Q&A session, but also you are following the presentation online, can submit your questions or comments in advance or as we go along by email, which is particularly relevant this morning as we present at Vestland på Börs today in Bergen and not in Oslo as we normally do. So please refer to our website at Moe.com for the necessary details. A disclaimer, I think we leave for self-study. So then we are ready for the highlights of the quarter. And as the first bullet point reads, Moe recorded 1.34 billion euro in operating revenues in the second quarter, which translated into an operational profit of 230 million euro, which is in line with the trading update of the 15th of July. And if I am to sum up the quarter in just a few words, I would say it was a strong quarter for Moe operationally with good biology and seasonally record high growth in sea to mention a few. After what I think is fair to say was a rather rocky start to this year biologically with sore issues in Moe Norway in the first quarter. And this materialized in season the record high harvest volumes in the quarter of 110 and a half thousand tons, which is put on our guidance, and irrespective of season, a record high standing biomass in seed at the end of the quarter of 327,000 tons, which is up by 28,000 tons year over year, or 9.4%. Biology has also developed well through the summer and into the third quarter, so we therefore reiterate the farming volume guidance of 500,000 tons for the year, which is a milestone for us as it will be the first time in MoVI 60 years history we cross the, for us, magic 500,000 tons mark, and which is equivalent to a growth of 5.3% year of a year, and by that surpassing that of the wider industry by a large margin again. Because according to Contali, the industry will grow by only a margin of 1% this year. So Moe's idiosyncratic growth continues. I would like to remind the audience that we harvested, as recently as in 2018, only 375,000 tons in Mowi, which means we have grown our farming volumes by as much as 125,000 tons over the past six years, or a CAGR of 4.9%, as we can see from the chart here. And this is important because as we have said numerous times, farming volumes and therefore farming volume growth are the mainstay of our business model and the lifeblood of this industry. Otherwise, good biology also manifested itself in a drop in realized blended farming costs in the second quarter, i.e. rate of farming costs for seven farming countries down by 21 euro cent per kilo quarter of a quarter from 6.05 euro per kilo in the first quarter to 5.84 euro per kilo in the second quarter. And we expect a further decrease in the third quarter due to higher harvest volumes. and therefore more dilution of fixed costs in addition to lower feed prices as fish meal and fish oil supply recovers driven by a normalized anchovy fishing season in Peru this year following the end of El Niño-induced shortages. Whilst volume and cost development were on the positive side in the quarter, I think it's fair to say that our price realization was more of a mixed bag. The prices in America is lagging behind in the wake of the cost of living crisis there. and a prize achievement for a Norwegian salmon negatively impacted by knock-on effects from sword issues in the first quarter and still some downgrading in the second quarter, but which is now in the rearview mirror as the quality of a Norwegian salmon has been excellent so far in the third quarter. When it comes to two other divisions, both feed and consumer products delivered a good quarter, I would say, at least adjusted for seasonality. I think that does it for the operational part of highlights. So now politics. As long feared, and right before this summer, the incumbent government of Canada regrettably decided to ban farming in net pens in British Columbia from 1st of July, 2029, with intention to move the industry either onto land or into closed containment assistance. And that despite a 40-year history of sustainable and responsible salmon farming in net pens in these waters with First Nations, and after having created thousands of valuable jobs in coastal Canada. But it looks like emotion and political agendas have taken over facts and science in this case, which is, of course, really, really sad, as there is so much at stake here. But things are as they are, and this farming region has never been particularly profitable for Mowi. Last year, we harvested 19,000 tons in British Columbia, and we made 11 million euro through the value chain, which accounted for a modest 4% of farming volumes, and only 1% of our total profit. And this year we are barely break even. So with the framework conditions now seemingly significantly changed, we find ourselves obliged to explore our options before deciding what to do. So board of directors has therefore decided to undertake a strategic review of this farming region where we keep all possibilities open. Then the last bullet point in the highlights, dividend. The same board of directors has decided to distribute a quarterly dividend of 1.70 NOK per share after the second quarter, which concludes the highlights. So now key financial figures. Kristian will go in depth on these numbers later this morning, so it's not to be too repetitive. I will just touch briefly upon the most important ones now. And first, turnover. This order had been through when we recorded 1.34 billion euro in operating revenues in the second quarter, which translated into an operation profit of 230 million euro. On the back of seasonally record high harvest volumes of 110 and a half thousand tons. Net interest-bearing debt came in at 1.88 billion euro, which is somewhat above a long-term debt target of 1.7 billion euro. But the equity ratio was of roughly 48% at the end of the quarter. So we still argue we have a sound equity and debt composition in Mowi. In terms of, furthermore, underlying earnings per share was 30 euro cent in the quarter, and return on capital, and annualized return on capital employed was 16%. In terms of regional margins through the value chain, we saw once again strong prices and margins for our European salmon, and much stronger than those of our American salmon, due to, as already said, a somewhat muted demand in Americas in the wake of the cost of living crisis there. which has impacted the summer consumption in America more than in Europe, but the summer consumption so far seems fairly unaffected by the cost of living crisis, and the market remains tight, I would say. probably in part due to the salmon's relatively larger footprint in the food service segment in Americas, in addition to a less developed salmon category in store. But in parallel, with Western economies continuing to recover, coupled with falling retail prices, we believe that salmon consumption in Americas will gradually pick up the pace as well. Otherwise, the spot price in the quarter saw the usual seasonal pattern with prices at record levels to begin with, at least for the European salmon, before falling sharply towards the end of the quarter on higher seasonal industry supply. And this time around, accelerated and compounded by the new stiffening regulation in the EU and introduction of 96, our time limit on freezing of smoked salmon fillets to make slicing in the smoking process easier. And this led to, as expected, a building down of inventory among smoke houses in Europe in the quarter, and therefore a one-off negative effect on the demand. Then our own price performance in the quarter, which I characterized as a mixed bag earlier this morning, because outside Norway it was strong, I would say, as it was above or oscillated around the reference price for all countries, which is the standard we like to hold ourselves to internally. Whilst in Norway, or for our Norwegian salmon, it was negatively impacted by contracts and contract prices below the prevailing spot price in the quarter, in addition to knock-on effects from soil issues in the first quarter and still some downgrade in the second quarter, as well as a back-end loaded harvest profile. On a positive note, however, the quality of our Norwegian salmon improved markedly towards the end of the second quarter and has so far been excellent in the third quarter. And I guess could add all origins to that. Then it's time to have a look at different business entities in the quarter, and we start with Moe Norway, our largest and most important entity by far. And let's take the numbers first. Operation profit was 149 million euro for Moe Norway in the second quarter. Margin was 2.52 euro per kilo, and harvest volumes 59,500 tons. And as you can see from the chart there, both profit and margin are substantially down year over year due to lower price achievements, which we have been through already in depth. Other than that, I would say the second quarter was a strong quarter for MoE in Norway with good biology and seasonally record high growth in C2 mentioned a few. And I have to say it's particularly encouraging to see that cost is coming down and that we report exactly the same realized production cost in this quarter as we did in the second quarter last year. And furthermore, that outstanding biomass in sea at the end of the quarter supports our farming volume guidance of record high 305,000 tons for the year, which is another milestone for us. And finally, that the FX hit in the wake of the unprecedented weakening of the NOC we saw last year is diminishing as it works its way through the value chain. In the second quarter, this disadvantage cost Moe Norway 9 million euro or 15 euro cent per kilo. Then the breakdown of the margins for the different regions in Moe Norway in the quarter. And for starters, I got to tell you, it's very pleasing to see Region Mid on top of the margin podium this time around, with a margin of almost €3 per kilo. Because this is a region in which we have never really succeeded in mowing, and for which we therefore initiated a turnaround plan last year, as some of you may remember. Having said that, that doesn't mean that we're out of the woods yet, because quarterly margins in this industry, they do fluctuate, that we know for sure. but it's most definitely a pat on the back along the way, which we will take with us in our further work with this region. Otherwise, region north and region west saw fairly similar margin in the quarter on good biology and strong operational performance for region west part. For region north part, which is normally our best region on margins, margin was negatively impacted by still some after effects from this winter's biological issues in addition to low harvest volumes in the quarter and less economies of scale. Region South, on the other hand, was lagging somewhat behind in this quarter due to low harvest volumes in addition to a back-end loaded harvest profile. And finally, all regions were hit by a soft price realization in the quarter due to contracts and downgrading. Then the last slide on MoE Norway, our sales contract portfolio. Contract share was 30% in the second quarter for MoE Norway, and was with that in line with our guidance, and I said a few times already, these contracts contributed negatively to our earnings. As for the second quarter, we expect the contract share to be 16% with relatively stable contract prices quarter over quarter. And in volume terms, they are quite stable as well as we can see from the chart here. Then it's time to have a look at the other farming countries and we start with Scotland. Moe Scotland delivered another strong quarter this year, I would say, with an operation profit of 44 million euro and a corresponding margin of 2.22 euro per kilo, or 19,500 tons harvest volumes. And on the back of good biology in the first half of the year, I would say, which has continued through the summer and into the third quarter. And this combined with lower sea temperatures in Scotland this year compared with three last years due to a cool and wet summer, I think we have a good starting point to deliver a better second half this year biologically. Knock on wood. That said, still a heads up on cost realization in third quarter due to lower harvest volumes and therefore less dilution of fixed costs. Otherwise, our postmortem production in Loch Etif is going well, and we plan to move the first batch to marine sites already in September, or perhaps October, which bodes well for biological performance next year. And finally, we have started construction of a brand new bespoke broodstock and egg facility at Odesi, which will make us 100% self-sufficient for eggs when complete in 2025. which is another vital component in our biological turnaround plan for Mowi Scotland to mitigate the effects of climate change and rising sea temperatures. Then overseas to Chile. Mowi Chile delivered another set of good biological metrics in the second quarter, I would say, despite having been through an El Niño season. But soft prices in Americas weighed, unfortunately, once again on an otherwise good quarter for Chile. So the margin for our Chilean volumes therefore came to a modest 86 eurocent per kilo in the quarter, which is considerably lower than that of our European salmon. And paired with 15,000 tons harvest volumes, this translated into an operation profit of 12.5 million euro in the quarter, which is substantially down from the 25 million euro we made in the second quarter last year, and then 14,000 tons harvest volumes. And soft prices and margins were also a recurring theme for Movic Canada in the second quarter, which resulted in an operation profit of €7 million and a margin of €70 per kilo on almost 10,000 tonnes harvest volumes. Also a heads up on cost realisation in the third quarter for Movic Canada due to algae issues in British Columbia during the summer, in addition to lower harvest volumes. Having said that, the second quarter from over Canada will hardly be remembered for soft prices, margins, and algae issues, but for what we addressed earlier this morning, the incumbent government of Canada's infamous decision to ban salmon farming in net plants in British Columbia from 1st of July, 2029. with the intention to move the industry either onto land or into closed containment systems. And that, despite the 40-year history of sustainable and responsible salmon farming in net pens in these waters with First Nations, and after having created thousands of valuable jobs in coastal Canada. But as we said earlier this morning, it looks like emotion and political agendas have taken over facts and science in this case, which is of course really, really sad. But things are as they are, and this farming region has never been particularly profitable for us. So with the framework conditions now seemingly significantly changed, we find ourselves obliged to explore our options before deciding what to do. So we have therefore decided to undertake a strategic review of this region where we keep all possibilities open. Then our two smallest farming entities, Mowi Island and Mowi Faroes. And if you take Mowi Island first, Mo Allen delivered another strong quarter this year, I would say, on good biology, which translated into an operational profit of 7 million euro and a margin of 2.22 euro per kilo on 3,300 tons harvest volumes. Moe Pharaohs also saw strong earnings in the second quarter with an operation profit of 10.5 million euro by means of a rock solid margin of 4.13 euro per kilo on 2500 tons harvest volumes. Operation metrics were also once again strong for Moe Pharaohs which is another confirmation of Faroe Islands excellent conditions for salmon farming. Then the latest addition to the Mowi family, Arctic fish, a 51% owned Atlantic subsidiary, which we took over in the beginning of last year. Operation profit was 1.2 million Euro for Arctic fish in the second quarter, at least when we include Mowi group costs. And margin was 94 euro cent per kilo, excluding Morbius group cost, it was 1.8 euro per kilo. And both bear the mark of very low harvest volumes in the second quarter of 1,300 tons, and therefore very little economies of scale. But underlying operation performance in the quarter was reasonably good, I would say, and has been good so far in the third quarter. Other than that, I don't think there is much more to say about Arctic fish in the second quarter. So then I think we can conclude more with farming and move on to consumer products or downstream business. Consume products made an operation profit of 25 million euro in the second quarter, which is down from an unusual strong operation profit of 37 million euro in the second quarter last year, which is mainly explained by a slower market in Americas in addition to tighter margins downstream in Europe. Compared with the first quarter, however, the second quarter is actually slightly better, and that despite the fact that Easter and Lent season were in the first quarter this year, which are normally earnings booster in this industry. In terms of the market, I said earlier this morning, we continue to see a somewhat muted demand in America in the wake of the cost of living crisis, which has impacted the salmon consumption in America more than in Europe, where the salmon consumption so far seems fairly unaffected by the cost of living crisis, and the market remains strong. probably in part due to the salmon's relatively larger footprint in the food service segment in America, in addition to a less developed salmon category in store. But again, in parallel with Western economies continuing to recover, paired with falling retail prices, we believe the salmon consumption in America will pick up the pace as well in due course. Then the last entity this morning, what we feed. The second quarter is Normally, a low season quarter for Moe feed, but all that entails, and this quarter is no exception, but adjusted for that, I would say the second quarter was another strong quarter for Moe feed, with among other things, seasonally record high soil volumes of 132,000 tons, which is up by 16,000 tons year over year, or 14%. Following seasonally record high growth in Moe farming, in addition to new this year, supplying our new farming region, Iceland. Furthermore, operation EBITDA was also seasonally record high in the quarter at 11 million euro, which is up from 10 million euro in the comparable quarter last year. And finally, feed performance was evidently strong in the second quarter for all our volume records, which is, of course, extremely important for us as the world's largest salmon farmer. So then, Christian, the floor is all yours. You can walk us through the financial figures and fundamentals. Thank you so far.

Thank you very much, Ivan, for a good walkthrough. Good morning, everyone. Hope you are doing well. As usual, we start with the overview of profit and loss, which shows the top line of 1.34 billion euro in the quarter and 2.7 billion euro year to date, both slightly down from last year. Operational EBIT amounted to 230 million euro on good operations, good cost performance, but with somewhat lower achieved prices than Q2 last year. With regards to the items between operational EBIT and financial EBIT, the net fair value adjustment of biomass was negative this time around following the seasonal price development. And when it comes to income from associated companies, this is mainly related to NovaSea, where the operational result was 3.26 euro per kilo, which was a good performance, including a positive FX gain from the weakening of the NOC, and in general, good price achievement, while price achievement was on the softer side for Norway this time around. Net financial items were mainly related to interest costs And the earnings in the quarter translated into underlying earnings per share of 30 euro cent or 3.51 NOK per share, while cash flow per share was impacted by working capital and phasing of tax payments. Return on capital employed was 15.9%, where the resource rent tax in Norway has been taken into account as a cost. Then we move on to the balance sheet where total assets were somewhat reduced from year end 23. Covenant equity ratio is 51% stable from Q1. Movi's financial position is strong and we have a solid financing in place. The cash flow contribution from EBITDA was partly offset by working capital tie-up mainly related to biomass build-up and the tax payments affected by resource rent tax for 2023. CapEx was reduced from 2023 as several large projects have been completed. This figure includes fixed-price MAB purchase in Norway of €5.9 million in the quarter. And in total, Moe acquired four licenses in the traffic light system this year, partly in the fixed-price part in April and the rest in the auction in June. The latter was paid in July. With regards to the cash flow guidance for 2024, we have kept this unchanged at an overall level. CapEx and taxes have been adjusted somewhat down, while interests are somewhat up. The overview of our financing is unchanged from Q1, so we'll leave this for self-study this time around. Let us instead take a closer look at cost performance, which is one of our strategic pillars in MAUI. And as we know, and as we also see from the graph here to the top, costs in 2021 to 2023 increased for the industry as a whole, also for MAUI, driven by post-COVID inflation, particularly on feed. The positive thing here is that we have seen a recent easing of this inflationary pressure with the feed prices decreased around 5% year to date. We see that the cash cost to stock is down versus Q1 and also versus Q2 last year. We see that realized full cost has now come down from the peak in Q1. We expect lower full cost in the second half this year on positive scale effects from higher volumes, operational improvements, and lower feed price. And in Norway, we have a strong focus on cost containment, on cost leadership in the seven farming regions we operate. This has been a highly prioritized area in Norway for several years, with a number of initiatives to offset the underlying cost pressure. On a relative basis, Norway scores well versus our peers, and we are consistently number one or number two in the various regions we operate. This has been achieved through good execution, achieving operational improvements. A couple of recent examples. In 2023, we were able to keep cost items other than feed stable on a per kilo basis, despite an underlying inflation. This is a good achievement in today's environment. And furthermore, our most important business unit, Moe in Norway, has stable overall cost per kilo, including feed, in Q2 this year versus Q2 last year. This is another strong achievement. And then we expect lower realized full cost in Q3 and Q4. While prices for non-marine ingredients have already come down, feed prices in 2023 were kept high due to high marine ingredient prices. Marine ingredients represent approximately 20% of total farming full cost. And in 2023, the anchovy catch in Peru was disrupted by El Niño. This was an important driver behind the high marine prices. Therefore, it was very positive that we now saw a successful first catch season in Peru this year with a volume above historical levels and good oil yields. The second season is expected to start in October. And already, marine prices are down approximately 25% from the peak, and feed prices have been reduced in 2024. Provided a normal second catch season, we expect continued reductions in feed prices. And as mentioned, we also estimate a lower full realized cost on the back of this as well. Cost-cutting initiatives are very important. In the last years, we have attacked costs from two main angles. Firstly, a long list of operational improvements has led to Moe being a better cost performer. For example, because we have increased volumes, we utilize our licenses better, our assets better, we conduct our business activities in a better way. Secondly, we have had a strong focus on cost improvement and cost savings programs, where we set concrete targets in all kinds of areas of spending throughout the organization. The measures are verified by the controllers. and are reviewed by headquarters. And so far in 2024, we have realized €22 million in annualized cost savings, which means that we are well ahead of schedule to reach our €25 million target this year. And since 2018, we have realized as much as €307 million in total cost savings, of which €207 million in farming. There's a total of around 1,700 initiatives across different categories, including boats, treatments, health, nets, automation, productivity, procurement, and other initiatives such as 4% energy cut and 50% cut in travel costs. And since we have worked this way now for several years, we have built more cost-aware teams, and this places Moe in a good position for the coming years. An important part of this cost savings program is the productivity program on FTEs. Salary and personnel expenses, they represent the second largest cost item in MAUI, amounting to 648 million euro in 2023. And this cost item is clearly something we can influence through efforts to work smarter, become more productive. Since 2019, we have achieved an 18% productivity increase on FTEs, which means that we have delivered more than the 10% target we set ourselves back in 2020. We produced 9% more volumes with 9% less nominal FTEs. And this has been achieved through natural turnover, through retirement, reduced overtime, reduced contracted labor, automation, and rightsizing. And we are well underway to reach our target here for 2024. We then move on to sustainability, which is another strategic pillar for Maui. Ocean-based salmon farming is on the right side of sustainability. Maui has numerous strong ratings by various facts and science-based rating agencies looking at all aspects of our business. Further to this, we are proud to have been covered by prestigious Time magazine on two recent occasions. In June, Mowi was named in their list of the world's most sustainable companies, highlighting corporate responsibility and sustainable practices. And in October, our collaboration with Tidal on AI-driven underwater sensing and analysis was named one of the best inventions of the year 2023. And we are, of course, glad that the outside world appreciates our ESG efforts in Maui. So the world needs more salmon. And with this in mind, we move on to market fundamentals and start with the industry supply of salmon. Global supply was relatively stable versus Q2 last year, which was in line with the guidance. Consumption in the EU plus UK area grew by 3% versus Q2 last year. In the major European markets, demand continued to be supported by positive retail developments. Promotional activity carried on into the second quarter and this was positive for market activity and consumer demand. Estimated food service demand was stable in Europe in the second quarter. And then consumption in the U.S. decreased by 7% compared with the same quarter in 23. We know that the U.S. market has an overindexation to food service and retail development was somewhat muted. And also the category is still less developed in retail. Lower shelf prices for salmon continue to trend slightly down in the quarter. This should be positive for consumer uptake in the second half. Shelf prices are so far only slightly down. So we believe that this demand effect will come as this development continues. And then we also know that the U.S. market has grown by as much as 5% on a CAGR basis the last five years, almost double the rate of global growth, supported by a salmon megatrends. And we expect the pattern of short-term demand fluctuations to work itself out in due course and that we return to a growth trend. We have already seen some indications of a turn in the trend in retail volumes during the quarter. Consumption in Asia increased by 4% compared with the same period in 23. The Chinese and Hong Kong market continued to grow, driven by food service. Retail sales also grew through increased e-commerce offerings. And consumption in other Asian markets continued to grow somewhat on good underlying demand and increased sourcing from Europe and Americas. While European prices have been strong and have followed the usual seasonal pattern, the US retail market is somewhat behind on the recovery curve compared with Europe, and we have seen some muted prices in America. But despite some short-term headwinds in the US, the market looks tight in the coming years. We estimate supply growth overall for 2024 to only 1%. And this is expected to be limited also in 2025 and the coming years. But Moe is set to deliver more volume growth than the overall industry. Our guidance of 500,000 tons represents 5.3% increase from last year. We have done some minor volume changes for Chile, Ireland and Iceland, but the total number remains. Then let us hear some comments from Ivan on the outlook.

Thank you, Christian. Much appreciated. Right. Then it's time to conclude with some closing remarks before we wrap it all up with our Q&A session hosted by our IRO, Kim Dusvik. And as we said earlier this morning, the second quarter was a strong quarter for MoE operationally with good biology and seasonally record high growth in C2 mentioned a few. After what I think is fair to say, or after, what is fair to say, a rather challenging quarter in the first quarter due to issues with source in Moe in Norway. And this materialized in seasonal harvest volumes of 110,500 tons in the quarter, which was put on our guidance, and irrespective of season, a record high standing biomass in sea at the end of the quarter of 327,000 tons, which is up by 28,000 tons year over year, or 5.3%. And as we said earlier this morning, biology has also continued well through the summer into the third quarter. So we have therefore, as Christian just showed us, reiterate the farming volume guidance of 500,000 tons for the year, which is a milestone for us as it will be the first time in MoE 60 years history we crossed the, for us, magic 500,000 tons mark. which is equivalent to a growth of 5.3% year-over-year, and by that surpassing that of the wider industry by a large margin once again. Because according to Contali, the industry is expected to grow by only a margin of 1% this year. So Moe's idiosyncratic growth continues. I would like to remind the audience that we harvested as recently as in 2018. only 375,000 tons in Mowi, which means we have grown our farming volumes by 125,000 tons over the past six years, or a CAGR of 4.9%. And this is important because as we have said numerous of times, farming volumes and therefore farming volume growth are the mainstay of our business model and then lifeblood of this industry. Otherwise, good biology also manifested itself in a drop in realized blended farming costs in the second quarter, and we expect a further drop in the third quarter due to higher harvest volumes and therefore more dilution of fixed costs, in addition to lower feed prices as fish meal and fish oil supply recovers, driven by a normalized angiovia fishing season in Peru this year, following the end of El Niño-induced shortages. In terms of the market, we are now at that time of year when seasonal high industry supply puts pressure on prices, and this year is no exception to that rule. But the underlying demand for our European salmon is strong, so we expect to see the usual price recovery towards Christmas when industry supply slows down on lower sea temperatures and less growth in sea, and Christmas demand starts kicking in. And in parallel with Western economies continuing to recover, coupled with falling retail prices, we expect the salmon consumption in America to gradually pick up the pace as well. And this combined with limited supply growth going forward, I would say fundamentals are still looking very strong. Then some marketing in the end. As this heading reads, please save the date of the 25th and 26th of September, because then we will hold a capital markets day in central Norway, where we will present our operational and strategic plans for the coming years. There you will also get the opportunity to have a first-hand look at our 410,000 tons feed factory in Bjorn. Our 6,200 tons smolt and post-smolt facility at Norheim, which happens to be the world's largest, according to my numbers, not to mention our brand new state-of-the-art primary processing plant at Jøssenøya. our feeding station in central Norway, our smart farming concept, just to mention a few. So once again, please save the date of the 25th and 26th of September. I think it will be worth your while. So then, Kim, I think we are ready for the Q&A session. So if Christian can please join me partly on the stage. We have a very small stage here today, so there's not much room for more than me, I'm afraid.

Very good. Thanks, Ivan and Kristian. So we have received some questions from the web due to the time limitations this time around. All analysts will get responses to their questions later on today. But we have time for two questions. The first one is on cost. If you can elaborate on the cost development in Q2 and also provide some more comments on the outlook on the cost reduction.

We are very satisfied, of course, with this development. I think it's very exciting that we have seen a turn in the cost curve. We see that the cost to stock curve has turned. The cost in stock in biomass, we have seen a turn. So according to me at least, this is not a one-off. This is a lower cost situation driven by of course us being able to contain other cost items than feed, as already mentioned. And then we have then seen a reduction in feed prices, which of course is a main driver here. And then the magnitude will also, of course, depend on on continued feed price developments. Yeah. So I think we prefer not to go into specifics on the magnitude, et cetera, but we definitely see a cost reduction.

Very good. And then the last question may be for Yvonne, if you can comment on the biomass development in the quarter. There was there are some comments in the report about good growth in sea. If you can elaborate, please.

Yeah, so as we said During the presentation, we have never seen a better growth in this part of the year. And I can also add to that that July was very good for us. We harvested record high harvest volumes and the biomass was still record high. So another five months more to go in this year. That being said, we know that things can happen in this industry. This is biology and biology is the law. Everything else is just a recommendation. But so far so good, Kim. It has been a good year apart from the start of the year in terms of growth, in terms of the over biological KPI. So for the rest of the year, I'm just crossing my fingers and hope that we will not what should I say, wreck it on the home stretch. So, yeah. No, we are good. We are good, but we are far from self-confident. We are always humble. Okay, thank you.

That wraps up the Q&A session.

Right, then it only remains for me to thank everyone for the attention. We hope to see you already on the 25th and 26th of September at the Capital Markets Day, and if not, at least in November, in connection with our third quarter release. Meanwhile, take care and have a great day ahead. Thank you.