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Clean Seas Incurs Losses Ready for Changeover Year

Economics +1 more

AUSTRALIA - Clean Seas Tuna Ltd has warned that it would incur a net loss of about AU$6 million for the second half of the 2009 year, compared with the first-half net loss of AU$6.6 million.

For the full 2008 year, the company incurred a net loss of $658,000. Clean Seas say that the recent rise in financial losses is due to a decision to "clear the decks".

The company was responsible for this years's advancements in the technology needed to spawn and grow-out Southern Bluefin Tuna, but it also works in the field of Mulloway and Kingfish production. Clean Seas expects an operating profit for the Kingfish division in FY2010.

The considerably better margins that are available from Southern Bluefin Tuna in the medium term have caused a refocusing of Clean Seas' business priorities, says the company.

These include: diverting some of the resources which would have otherwise been utilised in Kingfish and the majority of resources otherwise utilised in Mulloway to SBT; lowering Kingfish fingerling production from 1.25m to 1.0m to ensure the SBT division operates without capacity limitations; and utilising some of the existing Kingfish and Mulloway inventories for market entry/development strategies into new Asian offshore markets where the company's medium-term preference will also be to market SBT.

According to Clean Seas, in an ever competative market the company recognises that it must continue to improve.

"The profitability of the Kingfish business must be optimised while the longer-term upside from SBT is being achieved. The board views FY2010 as the 'changeover year'," the company said.

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