Struggling Chilean salmon farmer Nova Austral recently posted significant Q3 2023 losses, and its creditors have rejected its proposed reorganization deal.
In June 2023, while facing sanctions handed down by Chile’s environmental regulator, the company’s first attempt at restructuring failed. Nova Austral then presented its first draft of the recently rejected reorganization plan at the beginning of August. Nova Austral’s creditors postponed their decision six times before voting to reject the proposal.
“A creditors meeting was held today [in which] the creditors rejected the proposal as set forth in the reorganization agreement,” Nova Austral said in a 16 December statement posted to the Oslo Børs. “The creditors agreed on granting the company an opportunity to file a revised draft. Such filing must be made by 28 December 2023, and the creditors will vote on the revised proposal on 10 January 2024.”
Nova Austral – reportedly more than USD 500 million (EUR 455.6 million) in debt and struggling to stave off bankruptcy – posted heavy losses for the third quarter of 2023.
Its quarterly earnings before interest and taxes (EBIT) went negative at USD -6.9 million (EUR -6.3 million), compared to a positive EBIT of USD 12.3 million (EUR 11.2 million) in Q3 2022. Nova Austral posted net losses of USD 20.1 million (EUR 18.3 million) for Q3 2023, compared to the net profit of USD 1.1 million (EUR 1 million) the company turned in Q3 2022.
The company’s harvest over the last 12 months reached 14,000 metric tons (MT) whole-fish equivalent (WFE) in the third quarter, up 37 percent from the 10,300 MT WFE harvested in the same period a year ago. Sales volumes over the last year were also up 34 percent year over year, reaching 14,200 MT WFE.
Top-line revenues increased 11 percent compared to Q3 2022, reaching USD 27.6 million (EUR 25.1 million), mainly due to higher volumes sold, but the cost of goods sold surged 56 percent and outpaced revenues, hitting USD 32 million (EUR 29 million).
Nova Austral said the U.S. market remained its biggest customer by nationality during Q3 at 51 percent of total sales, followed by Europe at 24 percent and Asia at 2 percent. A smattering of other markets made up the other 23 percent.
“We expect the U.S. and Europe will remain our main markets, as Nova Austral’s strategic focus on fresh products and frozen portions is oriented particularly to these geographies,” Nova Austral said.
In its quarterly results presentation, the company provided updates on the status of seven legal cases in which it’s embroiled, saying cases regarding the revocation of some of its environmental licenses, fines posed by Chile’s environmental regulator, taxes due, and an environmental damage lawsuit filed by Chile’s State Defense Council all remain pending.
Nova Austral has been under intense public scrutiny since 2019 reports surfaced alleging it engaged in false reporting of mortality figures – an infraction for which it has faced criminal charges. This was followed by fines for reported inadequate mortality and sanctions for overproduction.
Nova Austral has said the malfeasance “completely misaligned” with its business, and at the time, its board of directors commissioned an internal, independent investigation to detect and correct the internal problems that led to the misreporting. That effort resulted in a complete overhaul of the company’s senior management.
Photo courtesy of Nova Austral
