Profit companies

Clean Seas tips back to profit

Thanks to record sales, Spencer Gulf trevally grower Clean Seas Seafood is poised to return to profit after more than $45 million in losses in the previous two years.

The publicly traded company’s sales reached $66.2 million in the 12 months to June 30, up 37% from FY21 and a 64% increase in sales of $40 million. dollars made in fiscal year 20.

Sales volumes also reached a record 3,757 tonnes with an average price of $17.61 per kilogram, while production costs fell 19% to around $12.40 per kg.

“What we’re seeing is a continuation of a very strong business performance,” said Clean Seas CEO Rob Grattan. InDaily following the release of the company’s fourth quarter results on Friday.

“Fish continues to resonate very well in all the new markets and channels we’ve opened up and the demand is well ahead of all the places we’ve seen it before and that’s key to turnover.

“The other side is to optimize our working capital, balance our inventory and manage our production costs. These two things working together underpin cash flow and business performance.”

Although exporting is a priority for the company, the growth of Australian sales to 2,153 tonnes in FY22 was a highlight. European sales also rebounded strongly to 1,237 tonnes after falling in the previous two years due to COVID-19 related disruptions.

Australian growth was driven in part by the national roll-out of a number of retail products with Woolworths.

A secondary listing last year on Euronext Growth Oslo (OSE) – the main exchange for high-growth seafood companies – also appears to support Clean Seas’ European performance.

Grattan said that while thazard was historically seen as a raw sashimi starter in high-end restaurants, it was now also gaining a reputation as a very good cooked main dish with larger portions, which had helped boost sales.

“It cooks very well from fresh and frozen and part of that diversification in Australia has been market driven and channel driven, but it has also been usage driven and that has supported an increase in volumes,” said he declared.

“The challenge for us through COVID was restaurant closures and also supply chain disruption.

“Our new business was largely delivered for export in the belly of passenger planes, so with restaurants closed and no international flights, it was certainly a huge detriment to our business, but before the pandemic , we were about 2500 tons per year and in the year we just finished we are almost at 3800 tons.

“Coming out of COVID has helped, but it’s really the business diversification and increased scale that has allowed us to grow and reduce production costs.”

Clean Seas recorded a loss of $14.45 million in fiscal 2020 and a loss of $32 million last year.

But with positive cash flow of $5.5 million in FY22, the company appears to be on the verge of a remarkable turnaround.

While it’s too early to tell if record sales and positive cash flow will translate to a return to profit when the final result is released in the coming weeks, Gratton said the company is “definitely on the right track.” direction”.

“Our goal was to have positive cash flow and earnings for FY23, so it’s really nice to have positive cash flow a year earlier than expected,” he said.

Robert Gratton, CEO of Clean Seas Seafood. Photo: provided.

“It’s a very strong turnaround from last year and the year before and if you look even deeper, it’s unprecedented for this company to have positive cash flow like this.”

The Adelaide-based company has also completed stocking its new Fitzgerald Bay site near Whyalla with juvenile king mackerel, which is a key part of its plan to double its production potential to 10,000 tonnes per year.

The Fitzgerald Bay farm is expected to be Clean Seas’ largest site with a capacity of over 4,000 tonnes of yellowtail amberjack.

Clean Seas is headquartered in its Royal Park processing plant, while its hatchery is in Arno Bay and its Spencer Gulf fish farms are in Port Lincoln, Arno Bay and Fitzgerald Bay on the Eyre Peninsula.

The company’s stock price rose 9% after Friday’s announcement to end the week at $0.55.

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