The Kingfish Company maintained a strong biological performance in the third quarter of 2023 and, through increased productivity, achieved a record-best biomass growth of 637 metric tons (MT), up from 374 MT in the corresponding period of last year.
The company operates a land-based yellowtail kingfish-farming firm in Kats, the Netherlands, and is advancing work on another farm in the U.S. state of Maine.
“We are very happy with the growth of the biomass production in the quarter,” The Kingfish Company CEO Vincent Erenst said. “This is the result of an excellent biological performance of the fish in our new Phase 2 and our old Phase 1 [production systems].”
The firm achieved an H1 harvest of 932 MT, and sold 375 MT of fish in Q3, taking its total volume for the first nine months of 2023 to 1,114 MT – 24 MT more than a year previously.
Thanks to “a more favorable size mix,” and a shift toward larger-sized fish, its revenue for Q3 2023 increased 8.5 percent year over year to EUR 5.7 million (USD 6.1 million), while its revenue earned per kilogram increased 11 percent, or EUR 1.50 (USD 1.60), to EUR 15.30 (USD 16.29).
“Some markets like Italy prefer small fish, while others like larger-sized fish,” Erenst said.
The Kingfish Company’s operational earnings before interest, taxes, depreciation, and amortization (EBITDA) crept closer to the break-even mark in the quarter, with a loss of EUR 100,000 (USD 106,461) compared to a loss of EUR 400,000 (USD 425,823) in Q3 2022, or a loss of EUR 0.30 (USD 0.32) per kilogram sold. Kingfish CFO Jean-Charles Valette said the company remains on course to break even in the second half of 2024.
“It has been a very good quarter for us. We will see how it’s going to be in Q4 – I’m not expecting the profitability to be quite as good as it was in Q3, but still developing in the right direction and actually a little bit [better] than we had [previously] expected,” Valette said.
According to its Q3 report, Kingfish is expanding its efforts to develop new markets, mainly in Europe and North America, with the latter bringing a number of new customers. However, due to the violent clashes in Israel and Palestine, the company temporarily halted exports to the region in October.
“Israel has been an important [market] for us, and this has affected around 10 percent of our sales volume. However, we do hope that we can resume exports very soon,” Erenst said.
The company’s Q3 gross margin increased 57 percent to EUR 1.6 million (USD 1.7 million), equating to EUR 4.30 (USD 4.58) per kilogram sold, which is up from the EUR 1.1 million (USD 1.2 million) and EUR 2.80 (USD 2.98) per kilogram recorded in Q3 2022.
With production costs also moving in the right direction and steady growth in sales and revenue per kilogram, the company is now looking ahead to the full completion of its Phase 2 expansion of its Netherlands facility. Construction is expected to be completed in December 2023, which will further increase the company’s kingfish production. Two-thirds of Phase 2’s potential is now operational, so scale effects are starting to materialize, according to Erenst.
Erenst said the company’s biological performance continues to “exceed expectations,” partly due to a significant improvement in the feed conversion ratio to 1.37 in Q3 2023 from 1.52 in Q3 2022. He said the company was testing new feed formulations to further improve the ratio, he said. Also, the third generation of juveniles at the Kats farm are showing “better and faster growth” than earlier releases, and sometime in early 2024, the company will only be stocking these third-generation fish, he said.
Through the end of September 2023, the company had spent EUR 90 million (USD 95.8 million) on its Phase 2 expansion, including EUR 4 million (USD 4.3 million) in Q3 2023. A new hatchery has been in operation since January and is now working at full capacity, as is the Phase 2 nursery. The company commissioned its discharge water treatment facility and two-thirds of the new tanks in Q3 2023, soon to be followed by the commissioning of an in-house processing plant and the remaining six tanks in Q4 2023. This would mark the final step of the project, with completion expected by the end of this year.
“Based on our results today with Phase 2, we are fully confident that we can indeed produce 3,500 MT once the system is completely full and 100 percent operational,” Erenst said. “As a result of the ramping up of production in the third and fourth quarter this year, we will see a significant increase in the harvest volumes starting at the end of December and going into next year.”
Going forward, the company will also start to report on some of its sustainability targets, including its waste production, carbon footprint, and forage fish dependency, it said.
Photo courtesy of The Kingfish Company
