Norwegian cod farming firm Statt Torsk has launched a strategic review to determine how to secure necessary financing, with a stated goal of finding an industrial partner.
The Stokkeneset, Norway-based company announced the new review in its Q2 2023 results, which highlighted the company's increased harvests and revenue, along with increased losses.
The company posted revenue of NOK 42.2 million (USD 4 million, EUR 3.6 million) in Q2 2023, up from the NOK 681,000 (USD 65,000, EUR 59,000) posted in Q2 2022 – when the company was still developing its farms. Year-to-date, the company has earned NOK 78.8 million (USD 7.5 million, EUR 6.9 million).
The higher revenue was offset by the cost of goods sold, which reached NOK 81.2 million (USD 7.7 million, EUR 7.1 million) in Q2 2023. As a result, the company posted an operating loss before fair value adjustment of NOK 46.2 million (USD 4.4 million, EUR 4 million). With the fair value adjustment of NOK 28.1 million (USD 2.9 million, EUR 2.4 million), the company’s operating losses for Q2 2023 are NOK 18 million (USD 1.7 million, EUR 1.5 million).
Overall, including fair value adjustment, operating costs, revenue, and net financial items, the company’s comprehensive income was a loss of NOK 19.5 million (USD 1.8 million, EUR 1.7 million) in Q2 2023.
Statt Torsk announced in January 2023 that it planned to establish its farmed cod as a premium product with fixed, year-round deliveries to dedicated customers in Europe. However, the company faced a difficult and “disappointing” Q1 in which the price-per-kilogram it achieved didn’t match its premium expectations. Statt Torsk CEO Gustave Brun-Lie said prices were “significantly low, sometimes even lower than prices for wild-caught fish.”
“There are various reasons for this, but the fact remains that we have not yet achieved our goal of differentiating our product from other white fish products,” he said during a Q1 update.
The company also reported it was grappling with temporary increased mortality at its Stokkeneset cod farming site, and mortalities at its Rekvika site – which ended with a harvest of 2,920 metric tons (MT) whole fish equivalent (WFE). That harvest result was 280 MT lower than expected, resulting in a Q2 loss of NOK 7.5 million (USD 717,000, EUR 656,000).
Despite the challenging start to 2023, the company’s board said it is optimistic about “the future of cod farming within the Norwegian aquaculture industry” and its role in establishing farmed cod production in the country.
The recently launched strategic review and search for a strategic partner, the company said, is part of the company’s vision to bring it to profitability.
“The objective is to forge a partnership that will play a pivotal role in realizing the potential of cod farming,” Statt Torsk said.
The company also said it will “explore a diverse array of strategic alternatives” as it reviews its operations.
“These alternatives encompass various possibilities such as financing arrangements, structural adjustments, business development prospects, and potential combinations thereof,” the company said. “Additionally, the company will also consider options for short-term working capital financing.”
Photo courtesy of Statt Torsk
