Troubled land-based salmon producer breaches loan agreement

by
Editorial staff

Florida-based salmon farmer records $36.4 million loss for first half of 2023.

Land-based salmon farmer Atlantic Sapphire reported decreased revenues in the first half of 2023 due to issues with water temperatures affecting production.

Between July and August, temperature issues led to slowed growth, limited feeding, and increased downtime for maintenance.

This resulted in an expected drop in cash flow by $30 million for the second half of the year, causing a potential breach of the minimum liquidity agreement under their current debt facility with investment bank DNB.

As a consequence, DNB Markets and Arctic Securities have been engaged to explore potential funding routes to ensure a sufficiently large cash buffer.

The largest existing shareholders represented on the Board of Directors, including Nordlaks, EW Group and Strawberry, have already indicated their continued financial support in the event of a funding round, according to the company.

The land-based salmon producer harvested 870 metric tons of salmon by June 30, marking a decline of 29 percent from the previous year.

The first half revenue stood at $8.1 million, a 17 percent drop compared to the preceding year.

The company’s CFO, Karl Oystein, highlighted ongoing challenges but emphasised the company’s efforts to normalise the farm’s conditions.

The company plans to stabilise temperatures by September’s end and expects an increase in harvest volumes in the fourth quarter.

Atlantic Sapphire is expanding its farming operations at its Homestead facility in Florida. The initial phase allowed an annual production of 9,500 metric tons, with the first harvest taking place in September 2020.

With the ongoing second construction phase, the facility’s capacity is set to increase to 25,000 metric tons annually.

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