Atlantic Sapphire (ASA) Q2 2024 earnings summary

Executive summary

• Production stabilized after infrastructure improvements, with a new management team focused on optimizing Phase 1 and preparing for Phase 2 expansion.

• Record harvest volume of 2,395t HOG in H1 2024, driven by operational improvements and better biological performance, despite earlier challenges with fish quality and sales price.

• Net loss widened to USD 52.0m in H1 2024, mainly due to high cost of goods sold and increased operating expenses.

• Strategic focus on U.S. operations, with potential divestment of Danish assets.

• All permits and licensing secured, positioning for significant share of the >600,000 tons/year US salmon market.

Financial highlights

• H1 2024 operating revenue was USD 11.2m, up from USD 8.1m in H1 2023, driven by higher harvest volumes but offset by low average sales price of USD 4.6/kg.

• Adjusted EBITDA was negative USD 46.6m, EBIT margin was -427.8%, and net loss totaled USD 52.0m.

• Cost per kg of biomass produced decreased year-over-year, but cost of goods sold remained high at nearly USD 20/kg.

• Cash balance stood at USD 10m, with USD 15m in restricted cash; total assets at June 30, 2024, were USD 328.4m.

• Equity ratio at June 30, 2024, was 80.6%; net interest-bearing debt at USD 22.6m.

Outlook and guidance

• Harvest volumes expected to remain strong in H2 2024, with higher average weights and improved sales prices, especially in Q4.

• Targeting annualized harvest of 8,000t HOG by end of 2025 to reach cash positive status.

• Premium pricing and stable production anticipated from October 2024 onward, with 80–90% of harvest sold at premium.

• Phase 2 design and engineering to be completed by Q1 2025, with full implementation expected to drive significant profitability.

• Cost inflation in production inputs has slowed, with expectations for cost stabilization over the next year.