The Kingfish Company has warned investors to expect potential cost overruns and delays in its efforts to build a new recirculating aquaculture system (RAS) farm in the U.S. state of Maine, as well as in its expansion of its Kats, The Netherlands RAS unit.
Work on the Dutch farm is already underway, with the RAS system installation and facility construction in its final stage, the Kats-based firm said in its H1 2022 financial results. When complete, the expansion will increase the farm’s capacity from 1,250 MT to 3,500 MT annually, but the current state of the global economy is slowing The Kingfish Company’s estimated opening date for the newly renovated facility and has resulted in “significant extra costs during the expansion of the farm in Zeeland.”
“While having been able to avoid significant cost overruns in the first 1.5 years of construction, given current supply chain issues and inflation, The Kingfish Company anticipates significant extra cost and potential delays for the remaining work to completion. Strict cost control measures are in place to limit the impact,” it said.
The Kingfish Company said it spent EUR 32.4 million (USD 32.4 million) on capital expenditure during the first half of 2022, which also included the cost of obtaining all state and federal permits for its planned facility in Maine. That has now been accomplished, and the company now just needs approval from the local planning board in the town of Jonesport, Maine, in order to be shovel-ready. However, Kingfish Company CEO Ohad Maiman previously told SeafoodSource a tightened funding situation for RAS projects globally has presented difficulties in its efforts to raise the money necessary to build the farm, though The Kingfish Company was able to secure a EUR 75 million (USD 81 million at the time) ESG-linked bilateral loan with P Capital Partners in April 2020.
In terms of results, Maiman reported “solid progress in first half [of] 2022.” Increased production in its Zeeland farm – reaching 742 tons in the first six months of 2022 – combined with strong demand for its yellowfish in Europe and the U.S., allowed the firm to double its sales to EUR 8.4 million (USD 8.4 million) in H1 2022, up from EUR 3.8 million (USD 3.8 million) in H1 2021. The gains allowed the Zeeland farm to become cash-positive for the first time.
“The sales price for both small and large fish in the first half of 2022 increased by 14 percent compared with the same period last year,” Maiman said. “Fresh fish demand continues to outstrip supply despite increased harvest levels and higher sales prices.”
For the first half of 2022, The Kingfish Company posted an operating loss of EUR 1.5 million (USD 1.49 million), compared to EUR 3 million (USD 2.9 million) in H1 2021. Its net loss in H1 2022 was EUR 2.8 million (USD 2.7 million) , “which includes indirect costs and reflects development costs related to the scale-up phase of the business, and planned expansion of the company’s production capacity in the Netherlands and the U.S.”
“The Kingfish Company is pleased with over four years of continuous operations, and over 30 production cycles of fish produced from full cycle hatchery to harvest, with zero mass mortality events to date,” it said in its results.
The company also announced the hiring of Jean Charles Valette as chief financial officer, beginning 1 September. Valette replaces Christo du Plessis, who left the company in March 2022 to become CEO of Matorka.
Photo courtesy of The Kingfish Company
