Atlantic Sapphire CEO bullish on US salmon market

Atlantic Sapphire’s losses grew in the first half of 2019, but its United States land-based salmon farm is on track, the company said, with its first commercial harvest expected by the end of next year.

The Miami, Florida-based aquaculture producer, which operates a salmon farm in Denmark and is constructing a massive land-based salmon recirculating aquaculture system (RAS) farm near Miami, Florida, realized operating loses of USD 5.6 million (EUR 5 million) in the first half of 2019, compared to USD 4.7 million (EUR 4.3 million) for the six months ending 30 June, 2019.

However, revenue surged from USD 4,000 (EUR 3,621) for the first half of 2018 to USD 2.02 million (EUR 1.8 million) for the first half of June. Notably, Atlantic Sapphire had USD 262 million (EUR 237 million) in assets as of 30 June. 

In total, Atlantic Sapphire has 3.6 million fish in its U.S. and Denmark "Bluehouses."

Atlantic Sapphire is on track to have its first batch of commercial salmon ready from its Florida "Bluehouse" in the fourth quarter of 2020. In June, the aquaculture producer purchased an additional 80 acres of land for its Florida RAS facility for USD 5 million (EUR 4.5 million). 

The property, adjacent to its existing 80 acres, will support the producer’s plan to expand production capacity to 220,000 metric tons annually by 2030, as well as develop additional vertical integration opportunities, the company said.

Atlantic Sapphire CEO and Founder Johan Andreassen is confident that there is a strong demand for its “premium” salmon in the U.S. market.

“We have a lot of relationships and customers who are interested in U.S.-supplied salmon. We are supplying a few of them with our salmon from Denmark, and we are quite bullish that we can sell it into the U.S. market at premium prices,” Andreassen told SeafoodSource on an investor phone call. “Customers are willing to pay a premium for a premium product.”

The producer has committed about 80 percent of Phase 1 construction budget for its Florida facilities, while its capital expenditures increased by 5 percent in the first half of the year. 

“We have made quite a few changes in our processing plant, including more machinery and better layout, which will give our processing plant better flexibility and lower costs,” said Karl Øystein Øyehaug, finance director for Atlantic Sapphire, on the investor call.

“We are now using a system in the U.S. that has worked well in Denmark Bluehouse,” Oyehaug said.

The South Florida facility’s harvesting and filleting line will be completed in the second quarter of 2020. Construction in the U.S. is going according to plan, and “makes us ready to deliver the first harvests from Miami by the end of next year,” Oyehaug said.

In Denmark, the company realized lower harvest volumes due to water quality issues. “We did not receive full prices for the quarter and we had a late harvest … due to water quality,” Andreassen said.

However, Denmark production will approach a “steady state” by the fourth quarter of this year. “We have achieved improvements in water quality as of the end of August,” Oyehaug said.

A new sea water intake was added at its Denmark facility in order to utilize the full production capacity of the "Bluehouse."

Photo courtesy of Atlantic Sapphire