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Good morning, everyone. My name is Ivan Vindheim, and I'm the CEO of Mowi. It's a great pleasure. I wish you all welcome to the presentation of Mowi's second quarter results of 2021, also this time around, 100% digitally.With me today to walk us through our financial figures and fundamentals, I have, as usual, our CFO, Kristian Ellingsen. And after the presentation, our IRO, Kim Dosvig, will facilitate a Q&A session via e-mail where you can submit your questions in advance or as we go along. Please refer to our website at mowi.com for the necessary details.The disclaimer, I think, we'll leave for self-study. Then highlights. Overall, I would say the second quarter turned out to become a reasonably good quarter for Mowi, both operationally and financially. Despite the still ongoing pandemic, we have, with minor exceptions, managed to keep more than 200 farms and 35 factories in 25 countries, running normally by means of maintaining the strictest biosecurity measures all across of our operations. At the same time, we have also managed to keep our people safe. So yet again, a big thank you to all of our 12,000 employees who have made that happen. It's much appreciated.Last time we met, we said we were expecting increasing prices in the second quarter on lower seasonal supply and strong demand, partly driven by easing of COVID-19 restrictions in many markets. This scenario unfolded, and it's, therefore, encouraging to record the highest operational EBIT since the start of the pandemic of EUR 137 million, particularly taking into consideration a global supply growth year-over-year of as high as 9% when we factor in release of frozen inventory in Chile. That's evidently a clear indication of a very strong underlying salmon market, notwithstanding the still ongoing pandemic and the market disruptions it brings about. For order's sake, the operational EBIT of EUR 137 million is also in line with our trading update of the 14th of July. The increase in profit year-over-year from EUR 99 million is, as already indicated, mainly explained by higher spot prices year-over-year, up by 18% in Europe and close to 50% in Americas. Farming volumes of 108,000 tonnes were stable. The same goes for blended farming cost of EUR 4.50 per kilo. However, adjusted for extraordinary costs in Canada East related to harvesting out ISA fish in Newfoundland, blended cost is actually down by EUR 0.15 year-over-year to EUR 4.35 per kilo.Other than that, I would describe biology as generally good in the quarter, with good growth conditions and thereby good growth. It's no secret that we, over time, have not been satisfied with our financial and operational performance in our, by far, largest farming units, Norway Region Mid. And this year has been no exception in that regard. So to address this, we have decided to split Region Mid into 2 new regions: West and Mid. The purpose of the split is to strengthen focus and leadership resources and adopt an even more hands-on approach than previously.One cannot ignore the fact that fish farming still is very much about the details and craftsmanship that call for a great deal of micro management, particularly in the more biologically challenging areas. New Region West will cover production area 4 and 5 in Norway and new Region Mid will cover production area 6. Harvest volumes in 2021 are approximately equally distributed between the 2 regions. So much about farming for now.For Consumer Products part, we had yet another good quarter with record-high volumes for our second quarter of 58,000 tonnes product weight. Earnings were reasonably good in the quarter as well, although increasing raw material costs owing to the soaring spot prices resulted in lower operational EBIT year-over-year, though still the second best quarter for the -- second -- best second quarter for Consumer Products to date.Feed and feed numbers, on the other hand, were impacted by low season in the second quarter with reduced volumes and reduced earnings. However, that said, the feed itself performed very well in the quarter, which is maybe the most important factor for the Mowi Group. Another important factor for Mowi is sound and good financing. Therefore, it's a great pleasure we have recently entered into a new green 5-year EUR 1.8 billion facility with our bank consortium at very attractive terms. Sustainability is deeply ingrained in the Mowi culture and at the heart of everything we do. So it's very encouraging to have reached 85% green financing with this facility.Last, but not least, the Board of Directors has declared an ordinary quarterly dividend of NOK 0.96 per share, equivalent to 50% of underlying earnings per share. In addition, the Board of Directors has decided to pay out an extraordinary quarterly dividend this time around of NOK 1 per share, supported by a strong financial position and a favorable outlook. So in other words, in total NOK 1.96 in quarterly dividend to be paid out after the second quarter.Then over to key financials. Kristian will go in depth on financial figures under his session. So to not disrupt the course of events, we will just touch briefly upon the most important ones now. Turnover of EUR 1 billion was the second highest recorded turnover for a second -- sorry, the highest recorded second quarter turnover ever for Mowi, equivalent to 10% increase year-over-year. This is explained by, as already said, first and foremost, higher spot prices year-over-year. Volumes were quite stable. Operational EBIT of EUR 137 million we have already commented on. Underlying earnings per share in the quarter was EUR 0.19, and unrealized return on capital employed was 13.6%, above the long-term target of 12%.In terms of regional margins through the value chain, they were reasonably good in the quarter, apart from Canada and, more precisely, Canada East, which was yet again loss-making. We will revert to Canada and Canada East shortly when we address the various business entities. But first, prices. As already said, it was as expected and encouraging second quarter price-wise with soaring spot prices in all markets on lower season supply and strong demand, partly driven by less restrictive COVID-19 measures in many markets. We also expect good prices going forward adjusted for normal seasonal patterns and, I guess, I should add, provided that the pandemic does not make a U-turn. Kristian will elaborate more on prices and supply demand under his session.Turn over to our own relative price performance. Overall, it was 4% below the spot price in the quarter, largely explained by contract prices lower than the soaring spot prices in the quarter. For salmon of Norwegian region, knock-on effects from issues with winter sores earlier this year and resultant downgrading played an additional role, which resulted in a price achievement of 8% below the spot price in the quarter. In Scotland, it was the other way around with price achievement 5% above the spot price driven by good contracts. Relative price performance for salmon of Chilean region was 4% below the spot price driven by a mix of soaring spot prices versus contracts, sales to Brazil and quality issues after a troublesome summer and fall season this year. Price achievement for fish of Canadian region was also below the spot price with 5% for that part, heavily impacted by harvesting out ISA fish in Newfoundland. Price achievement in Canada West was actually 3% above the spot price in the quarter.Then briefly about EBIT waterfall. Overall, operational EBIT increased from EUR 99 million to EUR 137 million year-over-year. This was in its entirety driven by increased earnings in farming as a result of the already mentioned higher spot prices. Both farming volumes and farming production costs were stable year-over-year. The other business entities on the other hand contributed [ EUR 16 million ] less in the quarter.Then it's time to address the various business entities. And as usual, we'll start with the largest and most important one, Mowi Norway. Operational EBIT was EUR 93 million in the quarter, up from EUR 60 million in the comparable quarter last year. EBIT margin was EUR 1.66 versus EUR 1.06 last year, i.e., an improvement of 57% year-over-year. As the graph clearly demonstrates, this is caused by both higher prices and lower costs, 2/3 and 1/3, respectively. Volumes of 56,000 tonnes in the quarter were stable.As already said, under the walk-through of the relative price achievement for Norway, it was negatively impacted by contracts and knock-on effects from downgrading related to winter sores earlier this year. In terms of biology and growth, they were reasonably good in the quarter.Then the different regions in Norway. Margin wise, it was a mixed bag also this time around. Region North stands yet again out as the margin winner with EUR 2.26 per kilo on very low cost. Region South achieved a margin of EUR 1.37 per kilo, which is substantially up from last year on higher volumes and a better performing year class. Region Mid's margin, however, of EUR 1.07 per kilo was highly impacted by very low volumes. We have deliberately chosen to prioritize biomass growth of harvesting in Region Mid in the quarter, following our troublesome first quarter with respect to gill issues and winter sores that heavily weighed on standing biomass.On that note, and as I already said, Region Mid's financial and operational performance have over time not been satisfactory. So the split we have decided to do of Region Mid into 2 new regions will, hopefully, enable us and equip us to improve our performance in this very important farming area for Mowi in the future.Then our Norwegian sales contract portfolio. Due to our positive market view last fall, we decided to have relatively low contract share for Norwegian volumes this year, i.e., 67,000 tonnes on a full year basis or approximately 26% of our total volumes as we speak, of which 27% is in the second half. In the second quarter, the contract share was 29%. So far, this has truly been a successful strategy. But for order's sake, we reserve the right to change this if we find it opportune. In terms of prices for the remainder of the volumes of 2021, they are in line with recognized contract prices in the second quarter.So much about Norway. Then over to Scotland. Mowi Scotland had yet another great quarter with an operational EBIT of EUR 30 million versus EUR 14 million last year, and EBIT per kilo of EUR 1.56 versus EUR 0.98. The more than doubling of profit in absolute terms was driven by both higher prices and volumes in addition to improved cost year-over-year. Both production and biology very good in the quarter. Other than that, there is not much to say about Mowi Scotland this time around. The numbers, they speak for themselves. For the third quarter, we expect somewhat higher costs on lower volumes and harvesting from sites with a higher cost level.Then Chile. Mowi Chile turned a profit of EUR 15 million in the second quarter versus EUR 12 million in the comparable quarter last year. EBIT per kilo was EUR 0.98 in the second quarter this year versus EUR 0.82 last year. This was driven by higher prices. Volumes were quite stable and cost was up as a result of knock-on effects from an unusual warm and dry summer/fall, I would say, this year in Chile, which led to more challenges than normal with oxygen levels and algae. However, now it's wintertime in Chile with reasonably good biology and growth for our part. For Mowi Canada's part, the second quarter was a mixed bag, to put it mildly. Canada West turned a profit of EUR 8 million or EUR 1 per kilogram, which is a huge improvement from last year's loss of EUR 5 million. Canada East, on the other hand, made a loss of EUR 15 million in the second quarter, mainly related to harvesting out ISA fish in Newfoundland, which impacted both price, not to mention, cost. The fish is now harvested out and will not impact our third quarter results of any significance. To avoid further ISA issues in Newfoundland, we have started to screen all our broodstock for HPR0, which, under appropriate conditions, can mutate to the pathogenic ISA virus. And all broodstock used for the 2021 year class was 100% free of HPR0. We are also preparing to start ISA vaccination as from 2022 stocking.On top of this, we have introduced stricter biosecurity measures all across our operations, including collaboration with neighboring companies. Canada East has been, unfortunately, riddled with biological challenges since we took over the rein in 2018, but with a turnaround plan ongoing and all the measures taken and to be taken, we hope and believe that financial and operational performance for this region will improve going forward.Then time has come for Mowi Ireland and Movie Faroes. For Salmon of Irish origin, we made an operational EBIT of EUR 3 million. This is substantially down from the EUR 15 million we made in a record high second quarter last year, driven mainly by significantly lower volumes by Irish standards close to 2,000 tonnes this year versus 4,000 tonnes last year. Margin wise, it was also lower, EUR 1.84 per kilo versus EUR 3.83 due to lower price achievement and higher cost.In Faroes, operational EBIT was slightly down year-over-year from EUR 7 to EUR 5 million due to lower volumes. Margin wise, it was quite stable, EUR 1.91 per kilo versus EUR 1.89. Higher prices were offset by higher costs as we harvested from [ Haldorsvik ] this year and our best performing sites last year [indiscernible].So much about Farming. Then Consumer Products. As touched upon initially, the second quarter was a good quarter for Consumer Products with record-high volumes for the second quarter of 58,000 tonnes product weight and resultant operational EBIT of EUR 16 million. However, increasing raw material costs owing to soaring spot prices year-over-year resulted in EUR 7 million less earnings quarter-over-quarter. We saw a very good development in demand in almost all markets in the quarter, partly driven by, as already said a few times, easing of COVID-19 restrictions, aggregated 10% higher year-over-year. And provided that the pandemic does not take a U turn, we expect this positive development to continue.Building markets and developing products are essential in growing demand and our branding efforts continue unabated with the launch of the Mowi brand in 3 new countries in the second quarter: Belgium, Italy and Spain. You can now find a Mowi brand in the shelf in 8 countries: the U.S., U.K., France, Poland, Belgium, Italy, Spain and Japan.Then our latest addition to the Mowi family, Mowi Feed. The second quarter is characterized by low season for Mowi feed and all that entails. And the second quarter this year was no exception in that regard. Operational EBIT of EUR 3 million was somewhat down compared to the EUR 6 million we made last year on lower volumes due to, among others, less third-party sales, rough quarterly volumes of 96,000 tonnes versus 110,000 tonnes. Overall, feed production has been satisfactory in the quarter, and the feed performance itself has been the very best. The latter is maybe the most important part for the Mowi Group.In the second quarter, we entered into the salmon's main growth season in the Northern Hemisphere, and as such, production and sales for Mowi Feed will increase accordingly.Then Kristian, the floor is all yours for walking us through our financial figures and fundamentals. Thank you so far.
Thank you for that, Ivan. Good morning, everybody. I hope everybody is doing well. We start as usual with the profit and loss statement, where we see good figures. It demonstrates that we have improved our performance from last year. The top line shows revenue of EUR 1 billion, which is up 10% from Q2 last year on higher prices.Operational EBIT, EUR 137 million, up by 39%. And this was EUR 38 million higher than Q2 '20 on higher farming prices, partly offset by lower results in sales and marketing. And then a few comments to the items between operational EBIT and financial EBIT. Net fair value adjustment positive EUR 67 million this time around on higher salmon prices. We have noncash impairment losses of EUR 40 million related to the turnaround of Canada East. And then [ some ] of the other items are 0.Income from associated companies that's mainly related to our associated company, Nova Sea, where we own 48.7% of the shares, and they had a good operational result of EUR 2.12 per kilo, although somewhat lower than Norway Region North in Norway. And this operational result translates into a return on capital employed of 13.6%, above the 12% target and increased from Q2 '20 on higher results, partly offset by somewhat higher balance sheet.Underlying earnings per share was EUR 0.19 and the net cash flow per share, EUR 0.31, positively impacted by higher earnings and also a release of working capital in the second quarter.Then we move on to the balance sheet. And we see that from end year 2020, that was relatively stable. Adjusted for IFRS 16 leasing, the balance sheet is up EUR 60 million, 50-50 between fixed assets and current assets. We see that covenant equity ratio is very strong, 58.1%, and the net interest-bearing debt at EUR 1.152 billion, which is below the target level. So we have a very healthy financial position in Mowi.Then we move on to the cash flow statement. Cash flow from operations of EUR 236 million. Change in working capital was released -- mainly related to release of accounts receivable and inventory and sales and marketing. But now we expect to tie up working capital for the remainder of the year. Tax payments were low last year, we see, and that was due to postponement of payments related to these COVID-19 aid packages from the authorities. So a more normal level this year. All in all, there was a positive cash flow of EUR 122 million. The other items are more or less as expected. When it comes to the cash flow guidance, that's kept unchanged from the previous quarter, so we will not go into further details there this time around.Then a few words about cost and cost development. Cost was stable Q2 '21 versus Q2 '20, but it would have been reduced by EUR 0.15 had it not been for Canada East and ISA issues. And we see from the graph here that we have been able to keep costs relatively stable in the period from 2016 to 2021 year-to-date. The annual cost growth measured as CAGR, compounded annual growth rate, is 1.8%, which is less than annual inflation in the period of 2.3%. So that means that for Mowi Farming, in this period, we have actually decreased cost in real terms. However, the cost is higher than we would like. There has been an underlying cost pressure for many years, first and foremost, related to biology.We see that the health cost has a CAGR of 6%, mortality cost 2.9%. So these items are dragging in the wrong direction. Other cost items such as equipment, boats also impacted. Biology is being addressed through a wide range of initiatives, which we discussed in detail on the Capital Markets Day. So we will not go further into that here. But in any case, it's clear to me that cost initiatives and cost-cutting measures, they matter. These initiatives have contributed to the fact that we have had a stable cost development despite this underlying cost pressure. And then also speaking about cost, it's worth mentioning that we are in Mowi the #1 or #2 performer in the various regions. We currently see a strong cost pressure in the industry, and I guess in many industries, not just in salmon farming, including feed raw materials, boxes, packaging, equipment, salary pressures in many regions. So there is still very much an underlying cost pressure. And that means that it's very important to have a continued cost focus, which we do. It's necessary to combat the increasing feed prices, more challenging biology, more complex regulations. And we are on track to deliver on the 2021 cost-cut program. We have realized EUR 18 million year-to-date in June versus a target of EUR 25 million for the year.So this means that we have cut costs amounting to EUR 155 million annualized since 2018, where the largest contribution naturally is from Farming. And this is over 1,000 different initiatives throughout our business, and each initiative represents a verified permanent saving for the group, mainly related to renegotiations of contracts, procurement savings related to improved coordination between departments and units, entering into frame agreements and achieving volume discounts, tailoring contracts to our needs, fee cuts, reducing the number of suppliers, cuts on external services and, in general, really a careful review of our spend in all areas.And this graph down here to the right also indicates how the cost savings are distributed amongst the various categories. We see that we have savings in many items: boats, treatment capacity, nets, net cleaning, vaccines, other health items, procurement savings and other initiatives. And through these initiatives and through this work on cost, we have improved what we call our cost culture, and we now have an organization which is more cost aware. And in the end, we are, of course, dependent on everybody in the organization working in the same direction when it comes to working on cost.And then 1 year ago, we announced the productivity program, and that's part of the overall cost-cutting program. We note that salary and personnel expenses, they represent the second largest cost item after feed costs for the group. And there are, of course, opportunities there as in all other cost items. And that was demonstrated in 2020. We managed to reduce the number of FTEs for the first time, 353 down versus '19, despite record high volumes. So that represents a 3% productivity increase. And we are on track to deliver on this target we have, 10% FTE reduction, productivity improvement by 2024 on as is volumes. And the FTE reductions will, to a large extent, be sold through natural turnover, retirement, reduced overtime, reduced contracted labor. And our expectation is, of course, to grow our business, grow the volumes. So we expect, in fact, to be a net job creator as we have also communicated before.So much about the cost update, cost status and productivity program where we are on track with our initiatives. But that's, of course, also important because of the underlying cost pressure. Moving on to financing. In June, we entered into a term sheet for a 5-year sustainability-linked EUR 1.8 billion facility in order to refinance the existing EUR 1.4 billion facility we have. In addition, there is a EUR 300 million accordion option. We are very satisfied with the terms, and I wish to thank the banks for constructive conversations. The lenders are DNB, Nordea, ABN AMRO, Rabobank, Danske Bank, SEB and Crédit Agricole. The latter is new from the existing facility.Interest on the facility is linked to Mowi's performance against sustainability KPIs, which are consistent with our overall ESG strategy. And sustainability-linked facility is, of course, a significant step towards our aim of 100% green or sustainable financing. With this, we are up to 85%. As with the existing facility, the financial covenant is an equity ratio of minimum 35%, so no changes there, and that is to be adjusted for the effects of IFRS 16 as today.And then we move on to the market fundamentals. We see from this table here that the supply increased from the various farming regions in the quarter for the industry by 1%. But as we will see from the next slide, consumption in the market increased by 9%. So the difference is related to inventory effects. In Q2 '21, there was a release of frozen inventory, mainly in Chile, so total supply growth of 9%. But the increase in supply from the farmers that was somewhat higher than expected, mainly due to harvesting more individuals in Chile. The supplier growth in Norway 6% was in line with guidance, good growth conditions in sea, as Ivan also commented upon for [indiscernible].Scotland, supply growth, 17%, in line with guidance, increased biomass, improved harvest weights. But in Chile, a supply reduction, 14% less reduction in guidance as more individuals were harvested, but still a big contraction. Yes, algae bloom in Q1 and impacting also Q2, higher mortality in the industry, lower biomass in Chile and a negative growth is expected now for Chile for the remainder of 2021. Total frozen inventory in Chile is now expected to be at a normal level.And then we see the various markets for the salmon. The table shows there's consumption growth of 9%, we see here. But despite 9% more volumes, we had a price increase. Spot prices increased by 25%. This indicates a really strong demand, good demand growth year-over-year estimated of 10%. Food service increased 50% year-over-year on gradual reopening, and retail decreased slightly 4%, but holding up at high levels. And we remember that Q2 last year, then retail was very strong, including the effect of promotional activity.Further progress in the vaccination rollout has, of course, led to a general easing of restrictions, gradual recovery in the food service segment and also continued high activity in retail. We see the consumption in EU and U.K. increased by 2.1%. Retail volumes remained good, while the food service segment is still in a recovery phase in Europe. According to our information, some domestic food service frozen inventory was also released in Europe, which comes down in addition to the 2.1% shown here. But we see that especially the U.S. and Brazil, they stand out. 22% consumption growth in Americas. We see a very strong retail demand still in the U.S., a strong recovery in out-of-home consumption on the top of that. The U.S. has come the furthest with the reopening and the figures are very encouraging from the U.S.Asia with a more mixed picture. China/Hong Kong decreased by 25% from a high base, I might add, in 2020 in the second quarter when the market was opened before we saw a tightening of COVID-19 restrictions. But we see that China/Hong Kong increased by 37% from Q1. Japan, relatively stable. Korea and Other Asia showed a good development.And here we see the spot price increases in the different markets, up to 8% in Europe, close to 50% in America. And also, we note that the airfreight cost is still higher than before the pandemic. So that means that for Chile, which is, as we know, dependent on airfreight to their main market in the U.S., there is still a difference between the spot price and the realized price in Farming, which is larger than normal.When it comes to industry supply growth for 2021, we expect the global supply contraction of 2% to 3% for the second half of the year. And for the next 12 months, we expect a global supply contraction of 2%. And this, of course, indicates a tight market in the time ahead. I think that's strongly supported by these numbers.And then when it comes to Mowi's own volume guidance that has been increased slightly to 450,000 tonnes from 445,000. The increase is in Scotland by 5,000 tonnes.So then I will I will leave it at that for now and then it's over to Ivan for the outlook statement.
Thank you, Kristian. Much appreciated. Then it's time to conclude with some closing remarks before we wrap it all up with a Q&A session, facilitated by our IRO, Kim Dosvig. I said a few times already, we are optimistic about the market prospects going forward. The market is, the way we see it, on the road to full recovery. Concurrently, we have built new markets gradually during the pandemic, and the recovery of the food service segment, we think, will only bolster an already strong demand for the Atlantic salmon. Combined with our global supply outlook for the coming 12 months of minus 2%, we think that bodes well for prices going forward. And with Mowi's low contract share and integrated value chain, we think we are in a good position to capitalize on this.In terms of harvest volumes and guidance, we have, as Kristian just showed us, upped it slightly from 445,000 tonnes to 450,000 tonnes on a full year basis. And lastly, and as already stated, the Board of Directors has declared an ordinary quarterly dividend of NOK 0.96 per share, equivalent to 50% of underlying earnings per share and an extraordinary quarterly dividend of NOK 1 per share, supported by a strong financial position and a favorable outlook. So in other words, in total, NOK 1.96 per share in quarterly dividend to be paid out after the second quarter. Then I think we are ready for the Q&A session, Kim.
Okay. Thanks for that, Ivan. Just a friendly reminder to everyone, if you have any questions, please send those to me on my e-mail address, and then I will ask Ivan and Kristian. The first question is from Nils Thommesen in Fearnley. How has biology in the different regions in Norway developed so far in the third quarter with regards to higher seawater temperatures and increased sea lice pressure?
Thank you, Nils. A very good question. So far so good, I would say, but at the same time, knock on wood, as you indicate yourself, this is the most troublesome part of the year, but we are okay as per date or as of today.
Okay. And then a question from Carl-Emil Johannessen, Pareto. What is your view on the potential new closed system licenses in Norway? At what prices per license are these licenses attractive?
Thank you, Carl-Emil. Another good question. This was announced yesterday. So on behalf of the rest of the administration and the Board, we haven't spent so much time on this so far and the consequences it can have for us. But we take the news as very interesting, and this is a potential opportunity for us. But when it comes to pricing and the way this is allocated, that we haven't a clear opinion on yet. So you have to bear with us. This we can, I guess, discuss in depth next time we meet.
Then the next question from Alexander Aukner, DNB. When do you expect Canada East to be back to a normal cost level?
Maybe we should start with the last part, normal cost level. So this is a tricky part of the salmon universe. Canada East has the lowest seawater temperatures in the winter season and the highest in the summer season. So cost level in Canada East will always be at a relatively high level compared to the best farming regions. But that doesn't say that it's not possible to run Canada East profitable because it is. And that was absolutely the case until we were riddled with biological challenges over the last 2 years.So we are targeting first now breakeven going forward and then the idea is to start to make money here. But as you all know, it takes some time to grow a year class or generation in salmon farming, [ roughly ], a long production cycle. So -- but for the generation we have in sea now, the shape is much better. And with the ISA measures we have taken, we have faith in a better year next year with regard to the season. And the latter is actually crucial with ISA and significance of ISA issues we had this year, that's really devastating for not only financial figures but also the operational performance.
Okay. Then his second question is in relation to Norway. Price achievement was weak in Norway in Q2 due to downgrades contracts. What should we expect in the second half of this year?
Well, quality is increasing. So in terms of that discount, I think you will see improved numbers going forward. When it comes to contracts, losing money on contracts is always a good thing. That means that the spot prices are high and higher than what you expected. So that part, we hope, will go on. But we don't know. Normally, we have seasonal patterns in salmon, and we think that we will see that this year. So pressure on prices and an increased volatility in the third quarter and then increased prices towards the year. But overall, with a minus 2% global supply growth in the coming 12 months, it looks good. We are positive.
Then Martin Kaland in ABG. He is asking, do you expect the challenging summer conditions in Chile to continue to weigh on costs going forward? Or have the improved biology during the winter had a positive effect?
Unfortunately, there are some knock-on effects from biological problems. So the standing biomass is, of course, impacted by what happened this summer. But with good biology and good growth going forward, some of this could be mitigated. I think we shall expect quite stable cost levels for Chile going forward, at least in the short term. And then I'm thinking of the next quarter and maybe the quarter thereafter.
Okay. Then a question from Christian Nordby, Kepler Cheuvreux. He's got more of a strategic question on the new licensing proposal yesterday. What are your thoughts on closed systems in general versus offshore or complete land-based solutions?
That's really a big question, which you have to spend more time on than what we have available today, Kristian. So -- and I'm happy to have this discussion with you. So -- but I think we take it in a different forum.
Okay. Then a question from Alexander Jones, Bank of America, on demand. Demand into Q3. Can you discuss what you have seen in the evolution of demand at the start of the third quarter, particularly considering the Delta variant and new restrictions in some Asian economies? And the second part is, had food service demand continued to recover? Or have you seen any temporary setback?
This was -- thank you for the question, Alexander. This was a very short period. So it's really hard to talk about demand, yes, [ when we apply weeks ]. But so far, the demand has been at a good level, and we haven't seen any setbacks from the Delta variant in terms of the consumption of the Atlantic salmon maybe with the exception of China. So I think so far, we are okay. But of course if the pandemic for some reason take a turn, then it will hit us as well. But so far, I would argue, it hasn't. That's at least my personal view.
Okay. A question from Lars Konrad Johnsen, Carnegie. Could you elaborate on the issues and expected improvements in Region West and Mid now as you separate the 2 regions? Do you expect any extraordinary costs following the split?
We do not expect any extraordinary costs due to the split. So that part I think the -- nothing is for sure in this industry, but that part, I think, we can rule out. It takes 1.5 year in sea, and then you have production on land. So for this generation and next generation, I don't think we shall expect much, but this will enable us and equip us to be even more hands-on in this farming area than what we have been previously. That's, I really think, we can take for sure. And this will give us improvements.We strongly believe in the new organization model. And with the 2 new MDs at the helm, we also have a very experienced and talented management, so particularly with the newcomer in Region Mid. So this we will follow with argus eyes going forward. But we have to be reasonable. We cannot expect much for the generation already in sea. But from there onwards, I think you must both expect and deliver better results than what we have done in this very important farming region for Mowi Norway. As we said during the presentation, we have not been happy with it up to now.
And then a question from the Investor Market on dividends. The Board decided to pay an extraordinary dividend this time around. Can you elaborate on the -- on that decision to pay an extraordinary dividend and some of the thinking behind the extraordinary dividend?
Yes. So we have recently introduced a new dividend policy in Mowi, and this is 100% in line with that policy. So we have decided to separate our dividend with qualifying or calling it ordinary or naming it ordinary and extraordinary. So it's the ordinary part we can take for granted under normal circumstances. And the extraordinary part is at the Board of Directors' full discretion.And the explanation this time around is -- as we said during the presentation, it's based upon a very solid financial position. We have a net interest-bearing debt target of NOK 1.4 billion, and we are far below that as of today. In addition, we have a favorable outlook. So with that backdrop, the Board of Directors found it appropriate to pay out an extraordinary dividend this time around. And I guess you also remember that we sold off our well boat company just a few months ago. So that has also impacted our financial situation positively. So -- but again, this is at the Board of Directors' full discretion. So you cannot put any automatic into this.
Okay. Very good. That concludes the questions from the webcast.
Thank you, Kim. And then I would like to say thank you for the attention. Take care.