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Construction-linked die-off cost Atlantic Sapphire $5m

A recent photo of the phase 1 Bluehouse in Miami, Florida. The facility will be completed in Q4. Photo: Atlantic Sapphire.
A recent photo of the phase 1 Bluehouse in Miami, Florida. The facility will be completed in Q4. Photo: Atlantic Sapphire.

The emergency slaughter of 200,000 fish at Atlantic Sapphire’s Bluehouse on-land salmon farm in Florida last month cost the company around $5 million, it said in a stock market report today.

Atlantic Sapphire’s hypothesis after the incident in late July was that the fish had been stressed as a result of construction work in the neighbouring hall. In today’s report on the first half of 2020, the company confirmed that this was the reason for the die-off. 

Atlantic Sapphire, which also has a pilot on-land salmon farm in Denmark, stated in the H1 report that the first batches of fish had over time been exposed to various construction-related stress factors, which had weakened the fish and increased the risk. On the day most fish died, there had been a lot of noise and vibration that caused the mortality.

The accounts for the first half of 2020 are characterised by several red numbers, as harvesting has not started at a full commercial level.

Group

  • Revenue for H1 2020: $2.5 million ($2.0m H1 2019)
  • Operating profit: -$23.3m (-$5.6)
  • Total result of -$31.4m (-$1.6m)

Farming Denmark

  • Turnover: $2.8m ($20m)
  • EBITDA: -$6.2m (-$0.9m)

Farming USA

  • Income: $172,000 (NA)
  • EBITDA: -$14.1m (-$2.8m)

The company reports that a revised capital expenditure expectation for phase 1 of the Bluehouse facility is now $22 / kg, which is an increase of $3 from previous calculations.

Atlantic Sapphire status

Altantic Sapphire writes in the H1 report that it will start harvesting fish in the US in September, and that in the fourth quarter they expect to harvest around 1,000 tonnes.

“The fish’s appetite and the system’s capacity are in line with expectations, when feeding has not been held back due to delays in construction,” the company writes.

It adds that there are currently around 5 million fish comprising a total of 2,200 tonnes of biomass in its US and Denmark facilities. Harvesting in Denmark has started and “steady state” standing biomass has been achieved.

The company had a total of 121 full-time employees as of June 30, 2020, and $266m in total assets as of that date.

Upcoming milestones

In the coming month, Atlantic Sapphire hopes to reach several important milestones, which it identifies as:

  • DK: “Steady state production” and harvest are expected in Q4 2020.
  • US: The first harvest starts in September 2020, with approximately 3 million meals expected to be sold by the end of the year.
  • US: The construction of phase 1 will be completed in Q4 this year, with “steady state production” in Q1, 2021.
  • US: Phase 2 design and capex budget should be ready in Q1 2021, with construction starting in Q2 2021.