Blue Star’s operating losses grow in Q2 2023

After a tough start to the year, Miami, Florida, U.S.A-based Blue Star Foods, a crab importer and operator of a crab recirculating aquaculture system (RAS), continued to struggle financially in Q2 2023.

The company reported an operating loss of USD 1.1 million (EUR 1 million) in the second quarter ending 30 June, and a net loss of USD 1.5 million (EUR 1.4 million), it said in a press release. The company’s revenue fell to USD 1.7 million (EUR 1.6 million), down 44 percent from the USD 3 million (EUR 2.7 million) it posted in Q2 2022. The company’s RAS-based revenue, meanwhile, increased to USD 500,000 (EUR 462,000).

The company posted a gross profit of USD 100,000 (EUR 92,000) in the quarter, a decrease of 76 percent, or USD 300,000 (EUR 277,000), compared to Q2 2022. The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q2 2023 was a loss of USD 700,000 (EUR 646,000), a decrease from the USD 1 million (EUR 923,000) loss it posted in 2022. 

For the first half of the year, the company reported USD 3.6 million (EUR 3.3 million) in revenue, down 57 percent, or USD 4.7 million (EUR 4.3 million), compared to the USD 8.3 million (EUR 7.6 million) it posted in H1 2022.  

Operating loss of H1 2023 stayed relatively flat at USD 2 million (EUR 1.8 million) compared to H1 2022, and net loss for the period reached USD 3.4 million (EUR 3.1 million), an increase of USD 900,000 (EUR 831,000), or 37 percent, from the USD 2.5 million (EUR 2.3 million) it lost in H1 2022. 

“While our first half of 2023 revenue performance was not as high as expected, we have taken necessary steps to reduce our cash burn and improve the liabilities portion of our balance sheet,” Blue Star Chairman and CEO John Keeler said.

Despite the poor showing in the first half of the year, Keeler said new business from prominent national retail brands such as Bloomin’ Brands and Just Food For Dogs “are gaining traction as we seek to recover our decline in revenue over the next 12 months.”

The company said it has also seen progress on its RAS business, “highlighted by our option to purchase land in South Carolina for our expansion,” Keeler said.

The company initiated an expansion plan for its soft-shell Atlantic crab RAS farm in Jasper County, South Carolina, U.S.A., which it acquired when it purchased Gault Seafood in December 2021. 

When it's fully built, the new facility will be able to harvest "over 220,000 dozen soft-shell Atlantic blue crabs annually," according to Keeler.

“We strongly believe our planned RAS expansion will be a major differentiator for us and contributor to accelerate revenue growth and profitability,” Keeler said at the time. "Our incremental investment in our sustainable indoor fish-farming technology and processes continues to ramp as we position for our new operations in South Carolina, to replace our existing facility in South Carolina.”  

Photo courtesy of Blue Star Foods