Miami, Florida-based Atlantic Sapphire made a net loss of $52 million for the first half of 2024.
Photo: Atlantic Sapphire.
The Miami, Florida land-based salmon farming company Atlantic Sapphire has seen its share value crash last week, including dropping an unprecedented 80% in just one day (August 21), after the company released its results for the first half of 2024, and announced it would be seeking $80 million in funding.
According to MarketScreener, Atlantic Sapphire share value on the Oslo Bors stock exchange closed on Friday 23 August at NOK 1.075 (USD 0.10 / EUR 0.09), showing a 5-day change of -77.14%.
On Tuesday August 20, the company held and earnings call and released its half-yearly report, revealing it had made a net loss of $52 million for the first half of 2024, despite increasing sales to $11.2 million, up from $8.06 million the previous year, and indicated it would need more capital "to improve capacity and cover operational costs".
The company said it would be seeking $60 million in extra funds through a share issue, with shares offered at NOK 0.10 each, and also planned a $20 million convertible loan.
The news of the planned fundraising, combined with the disappointing financial results, appears to have made investors uneasy and led to a vertiginous drop in share value last week.
Several shareholders sold off their shares, including major shareholder Blue Future Holding, an investment firm owned by Germany's EW Group, which divested its entire holdings of 2.42 million shares representing 3.95% company ownership, worth NOK 2.17 million (USD 210,000 / EUR 190,000).
However, other major shareholders in the company have agreed to underwrite the $60 million share issue, including Nordlaks Holding AS (which owns 12.95% of the company), Condire Management LP (12.48%) and Strawberry Capital AS (8.57%).
Atlantic Sapphire intends to increase production capacity and achieve cash-positive operations by the end of 2025, said CEO Pedro Courard, in an earnings call on August 20, 2024.
"We have stabilized our production and are starting to achieve full utilization of Phase 1 while preparing for Phase 2. We harvested 2,400 tons HOG of fish, a record volume, and expect similar levels in the second half with better prices," said Courard.
"We have also implemented several operational improvements, including new chillers and preventive maintenance protocols, resulting in low mortality rates and better biomass distribution," Courard added.
"Despite good biological performance, the financial situation is challenging," said CFO Gunnar Aasbo-Skinderhaug. "We had a revenue of USD11 million but an EBITDA of negative USD40 million and a net loss of USD52 million. The main issues were smaller fish sizes and lower-than-expected sales prices, which impacted cash flow and borrowing capacity. We need additional capital to address these challenges."
"We plan to cover the USD94 million needed for Phase 1 through three main sources: amending existing debt facilities, a subscription rights issue of up to USD60 million, and a convertible loan of at least USD20 million. Warrants will also be issued for future Phase 2 financing," Aasbo-Skinderhaug added, noting that the company is "taking measures to reduce the number of fish and improve the farm's capacity by removing bottlenecks. This requires both capital for CapEx items and operational activities."
Both Courard and Aasbo-Skinderhaug are recent hires into the company. Former Cermaq Norway Salmon Director Aasbo-Skinderhaug joined as CFO on July 1, while former Cermaq Chile MD Courard officially started as Chief Executive on August 1.
Earlier this summer, it emerged that two holding companies linked to Atlantic Sapphire's outgoing CEO and co-founder Johan Andreassen and co-founder Bjørn-Vegard Løvik had divested almost one million shares in the land-based salmon company, according to a stock market announcement on Friday, July 5.
The companies, Alsco AS and JEA Invest AS, sold a combined total of 1.15 million shares, for NOK 8,668,004 (USD 819,599 / EUR 756,768).
