Barramundi Group posted a net loss of SGD 5.3 million (USD 3.9 million, EUR 3.6 million) in H1 2023 on flat revenue, but managed to decrease expenses following the sale of its Australian assets.
Barramundi Group, which also operates the UVAXX fish health and autogenous vaccine company, is planning a pivot toward Brunei as it winds down its farming operations in Singapore, where it is based.
After failing to spin off its Western Australian operations, Barramundi Group divested from them through a sale to Tassal in July 2023. The company also shut down farming in Singapore after struggling with scale drop disease virus. It replaced its CEO in October 2022 and suffered a board exodus in May 2023.
The company posted a negative earnings before interest, taxes, depreciation, and amortization (EBITDA) of SGD -3.8 million (USD -2.8 million, EUR -2.6 million) in the period, up from SGD -2 million (USD -1.5 million, EUR -1.4 million) in H1 2022. Its revenue dropped slightly to SGD 16.6 million (USD 12.3 million, EUR -11.3 million) from SGD 16.9 million (USD 12.5 million, EUR 11.5 million), but it more than halved its losses from its H1 2022 figure of SGD 12 million (USD 8.9 million, EUR 8.1 million) due to “aggressive cost-cutting measures,” Barramundi Group CEO James Kwan wrote in a letter to shareholders.
Barramundi Group spent the first half of 2023 aiming to “right the ship to an even keel,” Kwan said.
“Eliminating the financial drain from our Australian business allows us to realign our focus towards strengthening our aquaculture production through our operations in Brunei,” he said. “With over 8,000 hectares of sea and land leases, a fully operational recirculating aquaculture system (RAS) nursery, and a UVAXX diagnostic lab in Serasa, Brunei is unequivocally central to our future growth strategy.”
Barramundi Group sold 714 metric tons whole-fish equivalent in H1 2023, as opposed to 930 MT WFE in the first half of 2022. The firm’s total equity was SGD 64.3 million (USD 47.7 million, EUR 43.6 million) in H1 2023, down from SGD 72.3 million (USD 53.6 million, EUR 49 million) a year prior. But Kwan said the company was preparing to announce a major expansion push, dubbed BG 2.0, that will include the construction of a land-based RAS project in Mengsalut, Brunei, with an annual capacity of 3,000 MT, to be supported by a planned capital raise. The company has obtained favorable energy, land, and labor costs in Brunei, “enabling a more sustainable growth path,” according to Kwan.
The company is “in close discussion with our bankers to explore alternative repayment approaches” after loan and interest repayments became a bigger cash outflow in H1 2023 due to rising interest rates, according to Kwan.
Barramundi Group’s Kühlbarra and Fassler brands continued to command a premium in the marketplace, according to Kwan, though the company was hit by reduced sales to a national supermarket chain. However, it raised prices and signed a distributorship with Ben Foods Brunei, giving it a springboard into the local market in Brunei.
Kwan said Barramundi Group is transitioning its Singapore operations into an IP and sales hub focused on sales and marketing, vaccine development through UVAXX, and broodstock genetics research.
“Our investment into Allegro Aqua, where we acquired broodstock from Temasek LifeSciences Laboratory’s multidecade selection program, is significant. It has allowed us to continue work on breeding and selection of genetically improved generations of broodstock. Other joint research programs with leading institutes enjoy funding from national research agencies will continue to embed value into the group. These activities will allow us to have a second spawning nucleus to support our BG2.0 plans,” Kwan said. “UVAXX, our fish health and autogenous vaccine company, is at the forefront of autogenous vaccine development for barramundi and other tropical finfish. As arguably the only autogenous vaccine supplier and expert in Southeast Asia, UVAXX’s strategic value in the burgeoning aquaculture industry cannot be overstated.”
Kwan said the current inflationary environment has created higher volatility in raw material prices, which is “continuing to keep our procurement and production teams vigilant.” But he said the company remained confident there will be continued “strong demand for quality seafood and value-added products in our markets.”
“The road to recovery will continue to be arduous and fraught with challenge,” he said. “However, more of the critical fronts surrounding the business have slowly been quelled and resolved in the past six months, management will see increasing bandwidth to work on both the strategic and tactical priorities that will stabilize revenues in the following months.”
Photo courtesy of Barramundi Group
