Clean Seas Seafood has withdrawn its sales guidance for FY 2025 as higher-than-expected mortalities will result in the firm missing its harvest targets.
The Australia-based yellowtail kingfish farmer reported its 2024 year class cohort is seeing increased mortality rates in the warmer summer months and that it expects the problem to continue.
“The losses currently being experienced, combined with a preliminary assessment of the condition of a sub-population of the remaining live fish, indicates that mortality rates will be in excess of the levels which formed the basis of previous guidance,” the company said in a release.
While its results for FY 2025 will likely be behind expectations due to the performance of the 2024 year class, the company said its 2025 year class is seeing “encouraging performance” and that the significant organizational changes it has made to its operational structure are continuing to benefit the cohort's performance.
Clean Seas has faced a difficult period after a proposed turnaround strategy, which led to positive cash flow in FY 2023, hit a snag following a loss in Q1 2024. The company announced an operational review after the loss, and the company posted another loss in FY 2024 that Clean Seas CEO Rob Gratton said was part of the company being in a transitional year.
Now, the company has withdrawn the guidance it issued less than one month ago in a 1 November business update. During that update, the company said it predicted sales volumes of 2,550 metric tons (MT) to 2,650 MT and a breakeven or modest loss in operating EBITDA compared to the AUD 5.1 million (USD 3.3 million, EUR 3.1 million) loss it reported in FY 2024.
“The cause of the higher mortalities is under investigation, as is ongoing treatment for the remaining fish, and work is underway to assess the impact on the business for the current and subsequent periods,” the company said. “The company will continue to update the market as more information becomes available in accordance with its continuous disclosure obligations, noting that the inherent operational risks in aquaculture may impact future results.”
The company’s sales volume in Q1 2025 was down compared to Q1 2024, falling to 605 MT from 778 MT. The company earned AUD 13.4 million (USD 8.7 million, EUR 8.2 million) on that volume in Q1 2025, compared to AUD 16.3 million (USD 10.6 million, EUR 10 million) in Q1 2024.
Pricing increased slightly, reaching AUD 22.21 (USD 14.43, EUR 13.64) per kilogram of fish in Q1 2025, compared to AUD 21 (USD 13.64, EUR 12.89) per kilogram in Q1 2024.
The company’s operating cash flow also increased in the quarter, rising to AUD 800,000 (USD 520,000, EUR 491,000) compared to the loss of AUD 1.5 million (USD 974,000, EUR 921,000) it posted in the prior year. The company said the increase was thanks to the benefits of a “consolidated farming footprint, lower requirement for feed, and the reduced cost base implemented in FY 2024.”
The company also said in its new update that a new automated feed barge, the Eyre Spirit, has been deployed and is working as intended.
"This crucial piece of infrastructure will bring lasting benefits with respect to operating costs and capability, feed conversion rates, and diet and feeding practice development,” it said.
