The Kingfish Company's RAS systems are operating so efficiently that it has had to implement growth control measures to align production with market demand.
Photo: The Kingfish Company.
If 2023 was a pivotal year for The Kingfish Company, 2024 is proving to be the year of sales. As noted in the Q1 2024 results and trading update reported in July, The Netherlands land-based yellowtail kingfish farmer has had a significant acceleration in sales that has driven its growth in Q2 2024.
Specifically, during the second quarter it reached a record volume of 512 tons, representing an increase of 36% compared to the same period last year. According to the company, this substantial growth results from focusing efforts to penetrate key markets and expand into new territories.
As a result, The Kingfish Company's revenues in Q2 2024 reached EUR 7.3 million (USD 8.09 million), an increase of 31% compared to the same period in 2023. Operating EBITDA, meanwhile, improved by 26%, reaching EUR -0.80 million (USD -0.88 million), compared to EUR -1.1 million (USD -1.2 million) in Q2 2023.
As also reported in the Q2 2024 trading update, additional investment in commercial activities started to pay off during the quarter, resulting in market growth for the company's main product, yellowtail kingfish, in both the professional and retail sectors.
"Our efforts in penetrating key markets and exploring new territories are starting to pay off as we continue to build up our sales team," said now CEO of The Kingfish Company, Vincent Erenst, commenting on the results.
In addition to increasing its sales and marketing team, the land-based yellowtail kingfish farmer is also launching new initiatives to accelerate its product penetration in target markets.
Thus, sales are accelerating, and the company is confident these efforts will gradually boost its growth and further strengthen its market position.
This increase in sales was further supported by an increase in production. At the end of Q2 2024, total biomass reached 1,075 tons, an increase of 110% over the same quarter in 2023, and a 3% increase from Q1 2024.
"Our farm's biological performance is highly encouraging, with biomass growth reaching 631 tons and the standing biomass more than doubling to 1,075 tons," Vincent Erenst commented. "Our RAS systems are operating beyond expected performance, underscoring the effectiveness of our technology and processes in consistently and reliably producing high-quality, sustainable yellowtail kingfish."
In fact, the company has reported that due to unexpectedly strong biomass growth, and in order to align production with market demand, growth control measures have been implemented, leading to a temporary reduction in productivity to 0.56 kg of growth per cubic meter per day - in Q1 2024 it was 0.57 kg per cubic meter per day -, and an increase in the eFCR to 1.47 (1.26 in Q1 2024).
"The biomass has reached its maximum carrying capacity, though harvest capacity has not yet peaked, explaining the slight decline in productivity," the land-based yellowtail kingfish farmer explained.
If total biomass had increased by 110% at the end of the first half of the year, revenues for the same period amounted to EUR 13.2 million (USD 14.6 million), compared with EUR 11.2 million (USD 12.4 million) in last year’s H1.
During the first six months of 2024, operating EBITDA improved by 53% to EUR -1 million (USD -1.1 million) from EUR -2.2 million (USD -2.4 million) in H1 2023. The company stated this positive change in EBITDA was driven by increased revenues and improved production efficiency.
Regarding cash flow and liquidity, as of June 30, 2024, The Kingfish Company maintained liquidity of EUR 18.5 million (USD 20.5 million), consisting of EUR 4.7 million (USD 5.2 million) in cash and short-term deposits, together with EUR 5.8 million (USD 6.4 million) in financing facilities. The company added it is "closely monitoring" the development of its liquidity position to ensure that it remains fully financed to sustain the current growth trajectory.
In addition to the opening of its packing and processing plant in Kats, Zeeland, in March of this year, The Kingfish Company continues to develop its expansion plans not only in The Netherlands - where it expects to benefit from scale effects and continuous improvement in operations and productivity to boost its profitability - but also in the United States, where in July, the U.S. appeals court upheld permit for construction of a farm in Jonesport, Maine.