Nordic Aqua Partners completed its first commercial harvest of Atlantic salmon at its Gaotang facility in China during April.
Photo: Nordic Aqua Partners
Despite a promising start to the year with strong harvest volumes and sales, land-based salmon farming company Nordic Aqua Partners now faces significant production setbacks in the latter half of the year due to a geosmin issue, the company said in its quarterly report released this week.
Nordic Aqua Partners completed its first commercial harvest of Atlantic salmon at its Gaotang facility in China during April. The company saw an incremental increase in harvest volume throughout Q2, culminating in a total of 523 tonnes of Head-On Gutted (HOG) salmon, with an average weight of 4.54 kg per fish.
The salmon quality was exceptional, achieving a superior rate of 99%, and the average sales price for the harvested salmon in Q2 was EUR 8.94 per kilogram HOG, reflecting strong market demand and the premium quality of the product, the company reports.
Q2 also saw a biomass production of 1,014 tonnes, bringing the total biomass to 2,432 tonnes by the end of the quarter.
However, Nordic Aqua ran into bad luck in July, when high concentrations of geosmin were detected at its facility.
Geosmin, a naturally occurring compound in recirculating aquaculture systems (RAS) that, while harmless to both fish and humans, can negatively affect the taste of the fish at elevated levels.
The company reports that this issue has led to a reduction in turnover and is expected to significantly reduce harvest volumes in the second half of 2024. The company anticipates limited or no harvest during Q3 as corrective actions are implemented.
“I am pleased that our pioneering business got off to a good start. In the first operational quarter of our start-up year, we increased sales month-by-month and produced Atlantic salmon at a superior rate of 99 percent," said CEO Ragnar Joensen.
"Unfortunately, we were unable to follow up on this development at the start of the third quarter, and we must make certain adjustments in production to making us more robust in the future. As a result, there will be changes to our harvesting schedule and sales in the second half of 2024," he added.
While the geosmin issue is being resolved, the delay in harvesting will impact the company’s revenue and cash flow in the short term. This has prompted a thorough review of Nordic Aqua’s capital requirements to ensure continued strategic execution and operational stability, the company said.
As of June 30, 2024, Nordic Aqua reported available liquidity of EUR 10.4 million. However, due to reduced harvest volumes and additional capital expenditures (CAPEX) related to addressing the geosmin issue, the company plans to raise approximately NOK 250 million (EUR 21.4 million / USD 22.5 million) in additional equity financing.
Major shareholders, including Kontrari AS, AKVA group AS, Aino AS, and Maringto AS, have expressed their support for this funding initiative.
“We are monitoring the situation closely and we have a good understanding of what we need to do. However, effects from actions taken will take somewhat longer than previously anticipated and will thus affect production and limit production in the third quarter. However, we see no need to change the production plan for 2025”, Joensen said.