Atlantic Sapphire share price plummets after release of revised revenue expectations

The share price of Atlantic Sapphire plunged on the Oslo Børs following a Sunday, 16 October announcement by the company revising its revenue expectations downward.

Soon after the market opened on Monday, the company’s share price dropped from NOK 10.95 (USD 1.04, EUR 1.50) to a low of NOK 6.80 (USD 0.64, EUR 0.65) in just under three hours. As of market close, the price settled at NOK 6.99 (USD 0.66, EUR 0.67). The price drop puts the company’s stock at its lowest value since it entered the public market.

The drop came as the company announced that due to “above-normal and increasing mortality in certain systems,” fish from its phase-one operations will be harvested at a lower weight than planned, averaging two kilograms in head-on, gutted weight.

While the company said it expects to continue to receive approximately USD 12.00 (EUR 12.19) per kilogram for its “Bluehouse Salmon” – superior three-kilogram or higher fish – it needed to reduce its revenue expectations due to the early harvest of some fish.

“The revenue for the second half of 2022 is estimated to be around the same level as in the first half of 2022,” Atlantic Sapphire said.

The company posted an H1 2022 revenue of USD 9.6 million (EUR 9.7 million), but its earnings before interest and taxes (EBIT) were negative, at a loss of USD 12.3 million (EUR 12.4 million).

The company did not reveal how many of its fish had died, or the volume of its early harvest. The company said its harvest guidance of 800,000 to one million fish “remains unchanged” and its biomass gain and harvest volume expectations for 2023 “are not impacted by the early harvest.”

The company said it plans to release a Q3 2022 operational update around 15 November 2022, through which it will share more details about its performance.

The news represents the latest in a string of setbacks for the company, which has plans to build one of the largest recirculating aquaculture system (RAS) farms in the world in Miami, Florida, U.S.A.. The company has suffered multiple mass-mortality events at its Miami-based facility, with one occurring in July 2020 which it blamed on “disruptive construction work close to the operating environment, including loud sounds and severe vibrations.” The next mortality event occurred in March 2021, causing a loss of the equivalent of 500 metric tons of head-on gutted salmon. Then, in September 2021, the company’s entire facility in Denmark was lost to a fire.

Atlantic Sapphire Chief Sales and Marketing Officer Damien Claire told SeafoodSource in January 2022 that the company took steps following the earlier mortality events to ensure any future incidents were isolated via independent farming units, as a means of minimizing mortalities.

"Following the two mortality events, the company has taken concrete steps to mitigate the risks of similar events happening again, specifically when it comes to the handling of the biggest known risk in all land-based facilities: handling of gases,” Claire said. “We are now operating 12 independent [farming units] in Miami.”

Atlantic Sapphire said it is still investigating the cause of the mortality, and plans to “take further corrective actions and minimize future mortality.”  

Photo courtesy of Atlantic Sapphire