Expecting profitability in 2025
The Kingfish Company reports a 37% increase in sold volume and a 28% increase in revenue compared to the third quarter of last year.
Published
Modified
"Q3 2024 marks another quarter of strong growth, with a 37% increase in sold volume to 514 tonnes and a 28% increase in revenue," stated Vincent Erenst, chief executive of The Kingfish Company, in a stock exchange announcement today.
The announcement is related to the results from the third quarter. The highlights are as follows:
- Sold volume increased by 37% to 514 tonnes (Q3 2023: 375 tonnes)
- Revenue of €7.3 million, up 28% (€5.7m)
- Revenue per kg €14.3 (€15.3 per kg)
- Operational EBITDA €-0.9 per kg (Q3 2023: €-0.3 per kg)
- Estimated installed capacity increased to 4,000 tonnes
- The hatchery produced the first generation of next-generation juveniles.
The Kingfish Company produces yellowtail kingfish (seriola lalandi) in a recirculating aquaculture system (RAS) facility in Zeeland, Netherlands.
The company reports that in Q3 it continued strong growth, with a 37% increase in sales volume to 514 tonnes. This resulted in a 28% increase in revenue to €7.3 million (Q3 2023: €5.7m), supported by what the company calls targeted investments in sales and marketing.
During the quarter, the company focused on customers in the food service industry, conducting training and product demonstrations to highlight the quality and versatility of yellowtail kingfish. With new members in the sales team, the company has achieved noticeable results in attracting new customers and expanding sales to existing customers.
Moving towards profitability
At the end of September 2024, the biomass was 1,063 tonnes, compared to 1,075 tonnes at the end of June. To align production with market demand, growth control measures were implemented, leading to a temporary decline in productivity.
Operational EBITDA for Q3 2024 was € -0.5 million (Q3 2023: € -0.1 million), reflecting the temporary decline in production. Total costs were in line with previous quarters, but sales and marketing expenses increased as part of strategic growth initiatives. For the first nine months of the year, operational EBITDA improved significantly by 36%, reducing the loss to € -1.5 million (9M 2023: € -2.3 million), moving the company closer to profitability.
The Kingfish Company has updated its estimate for production capacity in the Netherlands to an annual maximum production of 4,000 tonnes, up from 3,500 tonnes. This increase is due to improved growth in the fish resulting from adjustments in feed, genetic improvements, and further fine-tuning of operational procedures.
Kingfish 2.0
The breeding program that started over 15 years ago has reached a new milestone earlier than planned, with the production of the first generation of "next-generation" fish. These fish will gradually be introduced into production through 2025, and are expected to have faster growth, improved feed utilisation, and higher quality, according to the company.
As of September 30, 2024, the company had a liquidity position of €15.0 million, consisting of €6.4 million in cash, €3.0 million in short-term deposits, and €5.6 million in available financing facilities. The cash consumption for the quarter was €3.3 million, of which €2.0 million went to interest payments, as a result of the company's transition to cash-based interest payments starting from Q1 this year. The company said it closely monitors its liquidity position and will maintain a proactive approach to ensure sufficient funding through the growth phase and until full capacity utilisation in the farm.
The company said it expects to achieve positive EBITDA and cash flow from operations by 2025. It is still assessing the timing of its expansion plans in Maine in the United Staes, and in the Netherlands.
