Image: The Kingfish Company / FIS

The Kingfish Company Q4 and FY 2023 financial results

NETHERLANDS
Friday, May 03, 2024, 07:00 (GMT + 9)

2023 a pivotal year paving the way for future growth 

Highlights 2023

• Phase 2 expansion fully operational 
• Excellent biological performance, exceeding expectations 
• Record biomass growth of 2,195 tons (2022: 1,511 tons) 
• Total volume sold 1,457 tons (2022: 1,435 tons) 
• Revenue per kg up by 15% to € 15.1 (2022: € 13.1 per kg) 
• Gross margin per kg sold up 54% to € 2.9 (2022: € 1.9 per kg)1 
• 1 Reported gross margin per kg sold in 2022 was € 3.35. 
• Operational EBITDA per kg sold was € -2.7 per kg (2022: € -2.7 per kg)2 
• 2 Reported operational EBITDA per kg sold in 2022 was € -2.6.

Source: The Kingfish Company

The Kingfish Company N.V. (the “Company”; “Kingfish”; OSE: KING), pioneer and leader in sustainable land-based production of yellowtail kingfish, announces FY 2023 financial results.

“Looking back on 2023, I am pleased to announce several significant achievements. Our Phase 2 expansion has been successfully completed, setting the stage for continued growth. The record biomass growth and outstanding biological performance of our fish have exceeded expectations. Looking ahead, we see potential to further enhance our operations through efficiencies and economies of scale. Our primary focus remains on accelerating sales growth while simultaneously improving operational efficiency. We are looking forward to an exciting and prosperous future,” said Vincent Erenst, CEO of The Kingfish Company.

Financial review

Throughout the year, The Kingfish Company demonstrated unparalleled production excellence. Our farm’s biological performance surpassed expectations, achieving a record biomass growth of 2,195 tons (+45% vs. 2022). By the end of the year, we reached a closing biomass of 967 tons, significantly higher than the 408 tons recorded at the end of 2022. The remarkable efficiency of our expanded facilities pushed The Kingfish Company to new heights of productivity, maintaining our position as an industry leader with a growth rate of 0.76 kg per cubic meter per day. The introduction of improved feed formulations and the superior performance of our 3rd generation fish contributed to a reduced eFCR of 1.36, down from 1.47 in 2022. Our farm is now fully stocked with 3rd generation fish, demonstrating a reduction in the growth cycle to 3kg by up to two months.

The Kingfish Company experienced a 17% revenue increase in 2023, reaching €21.9 million (2022: €18.7 million). Volume sold remained stable at 1,457 tons (2022: 1,435 tons) due to capacity constraints until the third quarter of 2023. The average revenue per kg continued to increase reaching €15.1 in 2023 (2022: €13.1). This increase resulted from a favorable size mix, and strong demand for our fresh Dutch Yellowtail. The US frozen market presented more competition, with some pressure on price. However, fresh sales in North America saw significant growth, underscoring the appeal and potential of our product in the premium food service segment and retail markets.

To further drive the development and market penetration of Dutch Yellowtail, Kingfish is enhancing its sales and marketing activities across key markets in Europe, North America, and other promising export destinations. We were also delighted to welcome Gudo klein Gebbink as our new Commercial Director, who joined us in January 2024, bringing a wealth of experience to develop our brand, expand our customer base and boost sales in existing and new markets.

Our journey towards profitability has gained momentum, with a 54% increase in gross margin per kg to €2.9 (2022: €1.9 per kg) despite rising input costs. This achievement is attributed to the increased volume produced (+684 tons vs. 2022) as well as enhanced operational efficiency, driven by the lower FCR and the new feed formulations introduced on the farm. Higher average sales prices and a more favorable sales mix have also contributed to the improved gross margin.

Operational EBITDA has been stable in 2023 at €-3.9 million (2022: €-3.8 million). Operational EBITDA per kg was €-2.7 (2022: € -2.7 per kg). SG&A costs increased by 25% year-on-year, driven by the need to strengthen the support functions as well as some restructuring costs. Excellent operational performance, increased production and the strengthening of our sales and marketing capabilities will be the key drivers of future profitability.

Source: The Kingfish Company. Clic on the image to enlarge

Cash flow and liquidity

The Company reported € -7.3 million of operating cash flow in 2023 (2022: € -7.0 million). The cash flow from operations was impacted in 2023 by a €3.5 million increase in working capital, mainly driven by the higher closing biomass (+€2 million vs 2022). Biomass at 2023 year-end is approaching its steady-state level.

Cash flow from investing activities amounted to €-22.8 million in 2023. The total investment until the end of 2023 in the Phase 2 project amounted to €93 million, of which €21 million was spent in 2023.

Source: The Kingfish Company. Clic on the image to enlarge

Cash flow from financing activities amounted to €48 million in 2023. The Company raised €19.7 million in January 2023, in the last tranche of the capital increase arranged in October 2022. At the start of July 2023, the Company successfully raised €32 million by way of a convertible loan with a fixed interest rate and a duration of 4 years with most of its existing shareholders as well as with the sustainability-focused Ocean 14 Capital fund.

Net debt on December 31, 2023, amounted to € 77.1 million, an increase of € 9 million compared to € 68.1 million on September 30, 2023. The Company has €31 million in liquidity, consisting of cash and short-term deposits of €19.6 million and financing facilities of €11 million. The Company is closely monitoring the liquidity position to support the sales ramp-up and remains optimistic about the financial trajectory and the opportunities ahead.

<-- Source: The Kingfish Company

Sustainability achievements

The Kingfish Company has made significant improvements toward its sustainability objectives. In the year 2023, a 33% reduction in our Forage Fish Dependency Ratio (FFDR) was achieved, bringing FFDR down to 1.71. This achievement not only exceeded our 2025 target for reducing dependency on marine resources but also demonstrated our commitment to responsible aquaculture practices.

In addition, the Company successfully lowered its carbon emissions, accomplishing 75% of its 2025 carbon footprint reduction goal in 2023. The reduction in Feed Conversion Ratio (FCR) also played a crucial role in reducing carbon emissions and lessening our reliance on marine resources. Our R&D team remains dedicated to further reducing this dependency. By optimizing feed formulations and exploring alternative ingredients, we aim to continue minimizing our impact on marine ecosystems.

These achievements underscore The Kingfish Company’s firm adherence to best practices in aquaculture.

Profit and loss statement

For the complete statement of comprehensive income, financial position and cashflow, please see the 2023 Annual Report. Please note that certain reporting definitions have changed in 2023. The 2022 numbers below have been restated based on the new definitions.

Outlook

As The Kingfish Company continues to navigate through its growth journey, we are excited about the potential that lies ahead. The Company focuses on accelerating revenue growth, while optimizing operations. The Kingfish Company is investing significantly in sales and marketing to accelerate the expansion of its customer base and develop existing and new markets.

Source: The Kingfish Company

Whereas the current main priority is on optimizing the operations in the Netherlands, the Company also continues to investigate expansion plans in the US, Europe, and other regions. The Company expects to benefit from the scaling effect and further improvement in operations and productivity to become profitable and cash positive.

The Company is closely monitoring the development of its liquidity position and is focused on ensuring that it remains fully financed to sustain the current growth trajectory and pursue expansion opportunities. Our unwavering commitment to sustainability, innovation, and market expansion sets us on a promising path toward delivering value to our stakeholders and contributing to a more sustainable future.

Source: The Kingfish Company 

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