The Kingfish Company has reported its results for the first half of 2023 (1H2023) and second quarterly (2Q2023). Despite facing some financial challenges, the company has a positive direction and an optimistic outlook. This is evidenced by a 31% increase in revenue and a record production of 932 metric tons of net growth.
Vincent Erenst, CEO of The Kingfish Company, commented everything is on track. "Our financial results for the 1H2023 are characterized by significant progress in our operations and the strengthening of our balance sheet. We have established a solid foundation to accelerate our growth and achieve profitability. In the second half of the year, we will complete the Phase 2 expansion in the Netherlands, continue our efforts to enhance our operational performance, and increase our sales volume."
In line with Erenst's statement, the company is focused on business growth and operational optimization, with secured financing for the Phase 2 expansion. This expansion will significantly increase production capacity, enabling Kingfish to meet the growing demand for Dutch yellowtail. Furthermore, the company has plans for development in the U.S. and ongoing ambitions in Europe, indicating a promising future in the aquaculture industry.
In specific figures for 1H2023, Kingfish's revenue saw a substantial 31% increase, reaching EUR 11.2 million (USD 12 million), which is EUR 2.8 million (USD 3 million) higher than 1H2022. Moreover, revenue per kilogram of product rose by EUR 3.10. These numbers indicate the company's strong performance in a market characterized by high demand.
During this period, the total sales volume also grew by 5%, reaching 740 metric tons. Kingfish achieved a record-breaking production of 932 metric tons of net growth, underscoring its leadership in terms of productivity within the sector. As explained in the company's statement, this exceptional production achievement is the result of over five years of operations, with Cycle 58 reaching full production capacity by the end of June 2023.
Analyzing the financial evolution piece by piece, the first data point to consider is Kingfish's gross margin. This increased significantly by 50%, representing 13.9% of total revenue. Despite facing higher input costs, they managed to increase their margins by partially offsetting the rising feed prices with improved biological performance and the introduction of new food formulations. Energy costs also decreased due to a favorable contract. Overall, the increase in selling prices managed to offset the higher input costs.
On the other hand, the operating EBITDA for the 1H2023 remained at EUR -2.2 million (USD -2.4 million), similar to the same period in 2022. However, EBITDA per kilogram showed a slight improvement. Sales, general, and administrative costs increased by 19% year-over-year, largely due to one-time costs related to the organization's transformation and anticipation of the expected volume increase starting in the first quarter of 2024.
In terms of capital expenditures, the company invested EUR 16.1 million (USD 17.2 million) during the first half of 2023. Phase 2 of operations commenced in May, and by the end of August, 60% of the fattening systems were operational. They anticipated that agricultural biomass would double by the end of the year.
As of June 30, 2023, Kingfish's net debt amounted to EUR 60.4 million (USD 64.6 million). A figure that represents an increase of EUR 5.6 million (USD 6 million) compared to December 2022.
The Kingfish Company is a pioneer and leader in sustainable land-based aquaculture whose main product is the yellowtail kingfish. Their production process prioritizes animal welfare and raises fish without antibiotics or vaccines. They rely on RAS to protect biodiversity and ensure biosecurity. Its products are certified by the Aquaculture Stewardship Council (ASC), Best Aquaculture Practices (BAP), and British Retail Consortium (BRC). They have operations in the Neederlands, Kingfish Zeeland, and the United States, Kingfish Maine.