Atlantic Sapphire may decide not to rebuild Danish facility destroyed by fire

Aslak Berge
Insurance settlement could be pushed into the investment in the USA.

On Thursday night, Atlantic Sapphire’s land-based fish farm in Hvide Sande in Denmark was destroyed by fire. No injuries have been reported, but all fish in the tanks are considered lost.

The cause of the major fire on the Danish west coast is currently unknown.

Severe fall
Atlantic Sapphire’s stock market value has fallen by about NOK 1 billion (€100 million) since the stock exchange opened on Thursday.

SalmonBusiness has contacted Atlantic Sapphire for further information related to the fire in Hvide Sande.

This is what it looked like in the old part of the facility in Hvide Sande. The photo was taken in 2014. PHOTO: Aslak Berge

DNB Markets wrote in its morning commentary on Thursday that they initially expected that this lost biomass would actually enter the market in the second half of 2022. The investment bank also highlights the potential insurance payout of US$33 million, and adds that the company will now consider the extent to which an insurance settlement and the funds from the originally planned further escalation investments in Denmark might now be allocated to the operations in the USA instead.

“For investments and market development in the US, this could free up US$33-40 million,” wrote DNB Markets.

The fire started in the new part of the facility
Pareto Securities emphasised on Thursday morning that despite the expected loss of biomass, there were only fish in the old part of the facility due to the mortality incident earlier this year. Pareto also points out that the fire started in the new part of the facility.

“We include a negative EBIT contribution of US$5 million in the 2022 estimates, but expect a positive annual contribution of US$3 million in the long term. The company has not decided whether they want to rebuild the facility or just focus on the American facility in the future “, the brokerage wrote.

Kepler Cheuvreux also emphasizes that the insurance amount can be used to finance the American business.

PHOTO: Atlantic Sapphire

Related Articles