Troubled land-based salmon farmer AquaBounty Technologies has released its results for the fourth quarter and the entire year of 2023.
In the fourth quarter of 2023, AquaBounty saw a 23% increase in product revenue, earning $553 thousand compared to $451 thousand in the same quarter of 2022. However, the overall performance for the year presented a different picture. The annual product revenue totaled $2.47 million, a 21% decrease from the $3.14 million reported in 2022.
The company’s net loss escalated substantially in the fourth quarter, reaching $8.42 million in 2023, up from $6.07 million in the corresponding quarter of the previous year. The annual net loss also saw a rise, totaling $27.56 million in 2023, compared to $22.16 million in 2022.
AquaBounty also encountered setbacks in its expansion plans. The construction activities at their Pioneer, Ohio farm site were halted in June due to a surge in expected construction costs. This has led the company to explore new financing avenues to manage these unexpected expenses.
A significant decrease in the company’s cash reserves was reported, with cash and cash equivalents, marketable securities, and restricted cash totaling $9.2 million as of December 31, 2023, a sharp decline from $102.6 million at the end of 2022.
In a strategic move to increase liquidity, the company announced on February 14, 2024, that it had decided to sell its Indiana farm site. This decision aligns with AquaBounty’s broader strategy to strengthen its balance sheet and extend its cash runway.
Sylvia Wulf, the CEO of AquaBounty, acknowledged the financial and operational difficulties faced in 2023. The company grappled with limited harvesting capacity, fluctuating market prices for Atlantic salmon, and increased expenses in various operational areas. Despite these challenges, the company is actively seeking financial solutions and has engaged Berenson & Company for advisory on debt financing and other funding options.
“Our financial results for 2023 are indicative of the financial and operational challenges that we encountered during the year,” said Wulf.
“We began the year with a limited ability to harvest at our Indiana farm, as needed repairs were performed on our processing building. By the time the facility was fully back in operation in early May, the market price for Atlantic salmon had begun to fall. This continued through the second and third quarters and only partially recovered during the holiday season in the fourth quarter. The result was a decline in year-over-year revenue, even though our total production output increased by 14 percent.”
The CEO explained that net losses for 2023 increased over the prior year, due to sharp increases in spending for state excise taxes, legal fees, and outside consulting, the latter two driven by our fundraising efforts. We also were impacted by another significant increase in the cost estimate for our Ohio farm, which forced us to pause both our construction activities and our municipal bond financing transaction in June.
