The Kingfish Company announced that sales in the second quarter of 2023 were up 14 percent year-on-year (YoY) to €5.6 million
“We reached important milestones in the past few months, financially as well as operationally: we have started operations of the Phase 2 grow-out systems and celebrated record production at our facility in Kats. We have also secured additional financing which will provide full funding until we reach positive cash flow,” said Vincent Erenst, CEO of The Kingfish Company, in a press release.
“Our priorities now are to finalise construction of Phase 2, continue to improve operational performance, and increase sales volumes to reach profitability,” Erenst added.
Sales and production
Sales for the quarter increased 14 percent year-on-year to €5.6 million. Revenue per kg continued to improve compared to the same quarter last year, up €2.4 per kg, at €14.8. Revenue per kg was lower than the first quarter of 2023 due to a larger share of smaller fish resulting from the delay of commissioning of Phase 2. Total volume sold in the quarter amounted to 377 tonnes, roughly in line with the same quarter last year, with demand continuing to outpace the company’s production capacity.
Total standing biomass increased by more than 25 percent to 512 tonnes with an all-time high net growth of around 195 tonnes in June alone, and 512 tonnes net growth in the quarter, showing the excellent performance of the systems as well as the faster growth of the third generation fingerlings. As a result, the company will approach their maximum standing stock faster than expected. Operations of Phase 2 started in May 2023 and the full system will be operational by the last quarter of 2023.
In the quarter, productivity was 0.83 kg growth/m3/day and eFCR improved again to 1.27. The company completed some feed trials resulting in new formulations, which aims to reduce the content of marine ingredients, while reducing feed costs.
Convertible loan agreement of €32 million
On July 5, the company announced it had successfully raised €32 million in an unsecured convertible loan. The majority of the convertible loan is allocated to existing key shareholders, while €11 million will be allocated to Ocean 14 Capital Fund. Ocean 14 is a sustainability focused impact fund with significant aquaculture industry experience.
The loan provides full funding for the expansion until the company reaches positive cash flow and sustainable profitability. The harvest volume from the farm in Zeeland will start to increase in the first quarter of 2024. Steady state harvest volumes are expected in the course of 2025. Estimated capex for Phase 2 remains at approximately €95 million.
Outlook
The company’s management remains positive about the outlook for The Kingfish Company. With financing secured for completion of Phase 2 and the path to profitability, the company stated they can focus fully on growing the business and optimising operations.
The Group capacity will more than double after the new extension of the farm in Zeeland is fully commissioned, enabling the comapny to meet the growing demand for high-quality yellowtail kingfish. The company expects to benefit from the scaling effect and further improvement in operations and productivity, to become profitable and cash positive. Where the current focus is on completion of the Zeeland project, management continues to develop expansion plans in the US and Europe.
