Nursery tanks at AquaBounty farm in Albany, Indiana, the U.S. Empty of fish since it was put up for sale in April to shut down and secure all internal systems and get them ready to be restarted by a new owner, Q1 2024 has been its last quarter of activity.
Photo: AquaBounty.
AquaBounty presented its financial results for Q1 2024 reporting its net loss in the first quarter was up significantly at USD 11.2 million for 2024 (EUR 10.3 million) compared to USD 6.5 million (EUR 5.9 million) in Q1 2023. This means that losses increased by 72 percent.
The land-based salmon company also said the loss included a non-cash impairment charge of USD 4.3 million (EUR 3.9 million) against the long-lived assets of the Indiana farm and a non-cash charge of USD 1 million (EUR 920 thousand) to reduce the value of its inventory.
In February, AquaBounty announced it was putting its Indiana salmon farm for sale; shortly after, on April 2, we learned the company had closed the 2023 exercise with a drastic drop in cash reserves. Now, commenting on the Q1 2024 results, the Board Chair and Chief Executive Officer, Sylvia Wulf, said the farm and its team played "a critical role" in improving the company's operating experience through the development, testing, and refinement of technology, as well as establishing robust standard operating procedures, work instructions, and team member training.
"All of these learnings have supported our continued progress as a farm operator, provided valuable insight for our operations on Prince Edward Island, and have been incorporated into the strategy and design of our Ohio farm. Although the sale of Indiana was a difficult decision, it will allow us to increase our cash position and to decrease our ongoing cash burn," she added.
However, as she also noted, this decision had a direct impact on the first quarter financial results. First, it required the company to perform an impairment analysis on the farm's long-lived assets, which, as mentioned before, resulted in a non-cash charge of USD 4.3 million (EUR 3.9 million) to reduce the carrying value of the assets to the estimated net sale proceeds, and also resulted in a USD 1 million (EUR 920 thousand) non-cash charge to reduce the value of the farm's inventory.
Second, the announcement of the Indiana farm sale also impacted AquaBounty’s reported revenue for the current period, as it needed to accelerate the harvest of all fish on the farm to prepare for the sale of the facility.
"Over the course of five weeks, our team harvested over 320mt of fish, the majority of which were below our normal market harvest weight. With the farm now empty of fish, we completed the process in April to shut down and secure all of the internal systems, so that they are ready for restart by a new owner," Sylvia Wulf explained.
This is not the first time Sylvia Wulf has commented on the difficulty of deciding to sell the Indiana farm. As she told us in an emailed statement when the sale decision was made public, with 30 percent of the work completed, resuming and completing construction of the Ohio fish farm - halted in June 2023 due to high costs - was the priority. "The proceeds from the sale of the Indiana farm will provide added liquidity to strengthen AquaBounty’s balance sheet," she explained then.
On April 18, 2024, the company also executed a bridge loan agreement for up to USD 10 million (EUR 9.2 million), secured by the assets of both the Indiana and Ohio farms. Of these, it has received USD 5.0 million (EUR 4.6 million) to date.
AquaBounty stated it is working closely with its investment banker to pursue a range of funding and strategic alternatives, as it seeks to stabilize its financial condition while continuing to move forward with its business strategy. As Wulf told WeAreAquaculture in an exclusive interview, one of those alternative financing and strategic avenues will be to leverage its know-how in partnerships to expand internationally. The first stop in that expansion will be Georgia.
In addition, Wulf also said that, without abandoning GM salmon production, AquaBounty had decided to listen to the market and seize the opportunity to meet the growing U.S. and Canadian market demand for conventional salmon eggs. The Q1 2024 results seem to indicate this was a good decision.
"Revenue from our PEI (Prince Edward Island) farm for conventional salmon eggs and fry, grew during the current quarter to USD 82 thousand (EUR 75.4 thousand). And with the completion of the installation of expanded egg incubation capacity, we secured a large order for conventional salmon eggs from one of the largest salmon production companies in the world," AquaBounty's Board Chair and Chief Executive Officer, Sylvia Wulf, concluded.
AquaBounty Technologies, Inc. is a land-based fish farming expert raising Atlantic salmon from broodstock to grow-out, to supply nearby markets. Currently, it operates a broodstock and egg production farm on Prince Edward Island, Canada, while Q1 2024 has been the last quarter of activity of its grow-out farm located in Indiana, the U.S.
Additionally, the company is building another farm in Pioneer, Ohio, USA, and has a non-binding memorandum of understanding with Noble Salmon to build and operate a RAS salmon farm in the Republic of Georgia.