Sheffield, U.K.-headquartered aquaculture biotechnology company Benchmark Holdings recorded revenue growth and improved profitability across all of its business areas, as well as lower losses compared to previous periods, for the fiscal year ending 30 September 2023, despite facing some challenging conditions – particularly within the global shrimp market.
Company-wide revenue for Benchmark in 2023 increased 7 percent year over year to GBP 169.5 million (USD 214 million, EUR 197.7 million), and its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) climbed 15 percent to GBP 35.6 million (USD 44.9 million, EUR 41.5 million). Its adjusted operating profit also rose 61 percent to GBP 14.7 million (USD 18.6 million, EUR 17.1 million) in the period.
However, the company posted a statutory operating loss of GBP 21.6 million (USD 27.2 million, EUR 25.2 million), including discontinued operations, in FY 2023. That total includes an operating loss from continuing operations of GBP 5.3 million (USD 6.7 million, EUR 6.2 million).
Those totals are an improvement compared to the loss of GBP 30.5 million (USD 38.4 million, EUR 35.6 million), and GBP 6.2 million (USD 7.8 million, EUR 7.2 million), respectively, in FY2022. The company said it recorded lower losses despite increased inflationary pressure, which affected production costs and margins. It was also able to lower its net debt to GBP 65.5 million (USD 82.5 million, EUR 76.5 million), down from GBP 73.7 million (USD 92.8 million, EUR 86 million) in 2022.
“If you look at the key financial metrics of the group, we have improved all of them during the last financial year,” Benchmark CEO Trond Williksen said. “Given the market conditions that we have been through during the year, we are satisfied with the progress we have been able to achieve.”
Despite a difficult Q4 2023, which saw the company’s revenue and adjusted EBITDA drop 14 percent and 21 percent year over year, Williksen said the company is continuing to achieve the goals it set at the end of FY2020, when it completed its group restructuring. Its revenue and adjusted EBITDA from continuing operations since the restructuring have increased by 61 percent and 128 percent, respectively.
“This is a journey we intend to continue,” he said. “We have also taken steps to make sure the group is better positioned and more efficient going forward.”
To this end, Benchmark decided in the period to place all of its salmon activities under the leadership of its head of genetics and all of its shrimp activities under its head of advanced nutrition, with the goal of increasing the group’s commercial impact and helping it realize new cost synergies. Additionally, it divested from Spring Genetics, its tilapia business, which was sold in October 2023 via a management buyout, creating a new company named Advanced Aquaculture Biotechnology.
Williksen said he has been satisfied with the progress made at the company, but that demand for shrimp as an end product has decreased 20 percent to 30 percent in major markets like the U.S. and E.U. over the past few years. This has particularly affected Benchmark’s largest business area of Animal Nutrition.
In FY2023, Advanced Nutrition achieved revenues of GBP 78.5 million (USD 99.1 million, EUR 91.5 million) and an adjusted EBITDA of GBP 18.4 million (USD 23.2 million, EUR 21.5 million), down 2 percent and 3 percent year over year, respectively.
“That causes a reduction of production and stocking, which of course affects our demand,” Williksen said, adding that he still feels the organization is situated well for when market recovery occurs.
Williksen said Benchmark’s new fiscal year, which began in October, started well across all of its business areas and that there have been early indications of improvement in the shrimp market that should lead to increased demand from Q2 2024 onward.
“It’s fair to say that after a couple of quarters where we have felt the effects of some quite considerable headwinds in the market, we sense that we are moving into a landscape that is more positive in terms of market sentiments,” Williksen said.
Benchmark’s Genetics unit’s revenues increased 14 percent, but its adjusted EBITDA fell 10 percent to GBP 65.5 million (USD 82.7 million, EUR 76.4 million) and GBP 15.7 million (USD 19.8 million, EUR 18.3 million) in FY23, respectively, with the company strengthening its position as a salmon egg supplier.
Globally, it supplied a record 335 million salmon eggs in the period, an increase of 15 percent year over year. It also acquired the remaining 10.52 percent minority interest in Benchmark Genetics Iceland for EUR 9 million (USD 9.7 million). The business accounts for half the group’s salmon egg production.
The company continues to explore genetics investments in Chile, a segment which Williksen said is gaining traction and offering new customer opportunities.
“It is an absolute priority to get this part of the salmon genetics business to become a profitable contributor,” he said. “We have made good progress in Chile – doubling our sales – but we are still not where we aim to be. The good news is the positive commercial progress has continued into the new financial year.”
Benchmark’s Animal Health unit revenues jumped 27 percent year over year to GBP 25.5 million (USD 32.2 million, EUR 29.7 million) in FY2023, while its adjusted EBITDA improved by 4,295 percent to GBP 4.8 million (USD 6.1 million, EUR 5.6 million) due to suppliers along the Norwegian coastline buying the company’s sea lice solutions.
Also in FY 2023, the company decided to postpone a move to uplist to the Oslo Børs, which it was previously considering.
"In 2023, we conducted a consultation with shareholders regarding an uplisting to the Oslo Børs and simultaneous delisting from [the London Stock Exchange's] Alternative Investment Market (AIM). However, we concluded from these discussions that it was necessary to maintain listings on both Euronext Growth Oslo and on AIM for the foreseeable future and keep an uplisting under review as part of the group’s ongoing strategy to deliver shareholder value."
Photo courtesy of Benchmark Holdings
