Australian aquaculture firm Seafarms Group Limited has sustained increased losses as the company continues investing in its Project Sea Dragon shrimp-farming project.
The company is also awaiting the result of a court decision on the potential liquidation of the project.
In its full-year results ending 30 June 2024, Seafarms Group reported after-tax losses of AUD 19.3 million (USD 13.1 million, EUR 11.9 million), increasing 26 percent from the AUD 15.3 million (USD 10.4 million, EUR 9.4 million) in losses it posted last year. According to an Australian Stock Exchange (ASX) announcement, the losses are largely reflective of the company’s ongoing investments in Project Sea Dragon.
“The past year has seen continued assessment and development of Project Sea Dragon, with several positive developments bringing this project closer to fruition,” Seafarms CEO Peter Fraser said in the ASX announcement.
Seafarms first signed a memorandum of understanding to build the first stage of Project Sea Dragon in 2021 in its push to build the largest black tiger prawn farm in the world – though that memorandum later caused problems for the company. The contractor it selected for the project, Canstruct, later sued Seafarms, claiming it failed to pay an owed AUD 13.9 million (USD 9.4 million, EUR 8.5 million). The lawsuit resulted in an Australian federal court ruling the project should be liquidated and its administration “brought to an end.”
A judge later granted a stay on the liquidation as Seafarms appealed. The appeal was heard on 12 and 13 August but a judgment is still pending.
“Despite this legal uncertainty, the group continues to operate Project Sea Dragon as usual, maintaining licenses and approvals,” the company said. “Discussions with prospective investors proceed with the expectation that Project Sea Dragon’s legal position will be resolved in the 2025 financial year.”
The company recently sold two of its farming locations for AUD 13.5 million (USD 9.1 million, EUR 8.2 million) as part of its push to finance Project Sea Dragon, though the sale took place after the end of the financial year. Those farms were primarily focused on the production of banana prawns, which Fraser said will not be part of the company’s strategy going forward.
While it is planning to move away from producing banana prawns, the company said that its farming operations of the species performed well in the year ending 30 June 2024.
“During the first half of the year, the Queensland operations performed well, particularly due to the banana prawn crop, which now exclusively serves the ‘fresh’ option in Australia during spring, summer, and peak Christmas markets,” Fraser said.
The company said that its exports of black tiger prawns performed well and increased by 75 percent year over year, largely due to increases in demand in Europe.
“Spain and the U.K. also showed significant growth opportunities,” Seafarms said. “Additionally, extensive market potential exists in Asia, which will be targeted once additional volumes are available.”
Production of the species primarily occurred at Farm 3 – which the company did not sell – and production increased overall. The company also said it continues to develop a domestic breeding program.
“The investment in the domestication and breeding program continued. Similar to the prior year, all black tigers stocked were PLs from domesticated broodstock,” Seafarms said. “Additionally, PLs from 8th and 9th generation broodstock were supplied to third parties, yielding encouraging results. This lays the foundation for a separate business stream, supplying PLs with improved genetics to various other Australian farms.”
