"We are excited about the potential that lies ahead," stated The Kingfish Company in its Q1 2024 results presentation.
Photo: The Kingfish Company.
After closing a 2023 considered a "pivotal year" for The Kingfish Company, the land-based Yellowtail Kingfish farmer could not have started the new year on a better footing. "The first-quarter financial results indicate a promising start to the year, with an increase in sales volume, and operational EBITDA closing in on break-even," summed up CEO Vincent Erenst commenting on the company's Q1 2024 results.
In figures, these results translate into a record level of volume sold of 410 tons, 13% more than in the first quarter of 2023, with 363 tons. As the company explains, these results are the consequence of a positive performance in Italy, France, and Spain together with sales volumes in North America which, despite facing increased price competition in the U.S. frozen market, experienced significant growth.
For their part, the operational earnings before interest, tax, depreciation, and amortization (EBITDA) are still in the red, but in Q1 2024, the EBITDA loss was only EUR 300,000 (USD 322,051) compared to EUR 1.10 million (USD 1.18 million) in the same period last year. This is a reduction of approximately 80% which, as Erenst commented, leaves the company at break-even.
The strong performance was also reflected in revenues, which increased by 5% to EUR 5.9 million (USD 6.3 million) versus EUR 5.6 million (USD 6 million) in Q1 2023. The Kingfish Company said this growth was mainly driven by an increase in sales to the retail sector. Regarding the HORECA sector, it believes growth will accelerate with the start of the summer season.
As for biological performance, it continued to exceed the company's expectations, with biomass growth of 642 tons in the first quarter of 2024. This is slightly higher than the 626 tons achieved in Q4 2023. The standing biomass reached 1,043 tons. "As we have almost reached the maximum carrying capacity of our installations, we proactively manage growth," Kingfish claimed.
"As we continued to ramp-up production and sales to fully utilize the Phase 2 capacity, the company made significant progress towards reaching profitability," it also said. Supporting figures are a 90% increase in gross margin per kg to EUR 4.6 (USD 4.9) compared to EUR 2.4 (USD 2.5) per kg in Q1 2023.
Finally, it reported that sales and marketing expenses increased 46% compared to Q1 2023. They did so driven by what the company called "intensified activities," aimed at accelerating Yellowtail Kingfish's penetration in its key markets, and exploring "new promising markets."
As mentioned, despite these investments, the land-based Yellowtail Kingfish farmer is approaching operating EBITDA break-even and, it said, is closely monitoring the development of its liquidity position as it focuses on ensuring that it remains fully funded to sustain the current growth trajectory.
Regarding the outlook, on presenting its Q1 2024 results, The Kingfish Company insisted that it is focusing on accelerating revenue growth while optimizing its operations and investing significantly in sales and marketing to accelerate the expansion of its customer base and develop existing and new markets.
"Our primary focus this year is on further development of sales and operations; we are expanding sales to both existing and new clients in Europe and North America, while simultaneously exploring new markets for our Yellowtail Kingfish. We will also work with our team on further improvement of operational efficiency," said Vincent Erenst.
As WeAreAquaculture reported, Kingfish completed its Phase 2 expansion late last year and by the end of December had become fully operational with all tanks fully stocked. In addition, in March, it started to operate its state-of-the-art in-house packing and processing plant directly connected to the farm.
Currently, the main priority is to optimize operations in The Netherlands, but the company also continues to develop expansion plans in the country, as well as in the U.S. Moreover, it expects to benefit from the scale effect and further improve operations and productivity to be profitable and cash-flow positive.
"As The Kingfish Company continues to navigate through its growth journey, we are excited about the potential that lies ahead," the land-based Yellowtail Kingfish farmer optimistically concluded.
