Atlantic Sapphire reports lower losses, “stable conditions” at US operations

Atlantic Sapphire released its 1H 2022 results on 26 August, 2022, indicating the company has narrowed its losses and improved its operational stability.

The company reported a loss on its earnings before interest and taxes (EBIT) of USD 12.3 million (EUR 12.33 million) on revenue of USD 9.6 million (EUR 9.62 million) for the H1 period ending 30 June, 2022. The company’s net loss stood at USD 14.4 million (EUR 14.44 million).

Atlantic Sapphire's losses for H1 2021 were USD 51.5 million (EUR 51.6 million), and its EBIT was a loss of USD 48.7 million (EUR 48.8 million) on revenue of USD 10.8 million (EUR 10.83 million).

The lessening in the company's year-over-year losses was partially attributed to an insurance payoff. In September 2021 the company’s Denmark-based “Bluehouse” facility was destroyed in a fire, for which the company later secured a USD 25.3 million (EUR 25.37 million) insurance settlement. The company said in its results statement it is still “reviewing its strategy for its Danish operations.” The company also credited lower extraordinary mortality write-offs for the six months ending 30 June, 2022, compared to the same period in 2021 for the decrease in losses.

On the production side, Atlantic Sapphire also indicated that its operations in the U.S. have “stabilized” after the company experienced biological challenges in 2021.

“From an operational standpoint, U.S. phase-one conditions have stabilized after a long period of commissioning efforts and construction challenges, and we continue to see the importance of high smolt quality and avoiding stressors to ensure good biological results in the ongrowing stage of production,” the company said.

Atlantic Sapphire acknowledged that its initial salmon batches exhibited “mixed biological performances,” which it said was due to its Miami, Florida, U.S.A.-based recirculating aquaculture system facility was still being under construction, resulting in “unstable conditions with water quality and temperature fluctuations.”

However, the salmon that were stocked while the facility was still under construction have all been harvested, and Atlantic Sapphire said it didn't expect those issues to continue now that the farm is fully operational.

“As of 30 June, 2022, all initial batches were fully harvested out. Positively, the new batches introduced into the farm after mid-2020 have received a stable environment to thrive and grow in,” the company said.  “The new batches have outperformed the initial batches and are expected to bring the group into phase one steady state production in H2 2022.”

Atlantic Sapphire also said its approach to construction has shifted as it starts phase two of its Miami RAS, working to optimize quality and total cost of the project. In 2021, Atlantic Sapphire separated itself from RAS provider Billund Aquaculture and hired water treatment specialist Wharton-Smith as the project's general contractor and engineering firm Hazen & Sawyer to oversee design of the farm.

“In contrast to the U.S. phase one project, we now have the appropriate staffing level for a large-scale project, we have strategically selected a design consultant with proven experience on large water facilities, and we have partnered with a construction contractor with vast experience in constructing water treatment facilities locally in Florida,” Atlantic Sapphire said.

The company said the second phase of construction is expected to cost between USD 275 million and USD 300 million (EUR 275.8 million and EUR 300.8 million), but added that there is still the possibility the budget may shift due to ongoing work and the need to secure contracts.

“Given the current challenging construction environment with high and volatile raw material prices and long equipment and raw material lead times, the group is focused on value engineering and is working with its contractors to optimize cost and quality for outstanding phase two construction items,” Atlantic Sapphire said.

The company also said it has completed financing of phase two through a private placement of approximately USD 125 million (EUR 125.3 million) and an additional term debt credit of USD 98 million (EUR 98.2 million).  

Photo courtesy of Atlantic Sapphire