Unprecedented global demand for Kingfish has resulted in aquaculture company Clean Seas Seafood (ASX: CSS) needing to clear out two years worth of inventory resulting in its seafood sales to soar to all time highs.
For the Half Year ended 31 December 2021, Clean Seas set a new sales record to generate $31.25 million in revenue, primarily from their Yellowtail Kingfish which is farmed from their base in Fitzgerald Bay, South Australia. This resulted in a $6.0 million positive cash flow which was a $8.6m improvement on the previous corresponding Half Year which was impacted significantly by COVID and shutdowns to the hospitality industry.
“Clean Seas Seafood has had another very strong quarter, and we are thrilled to once again report a record sales result. Demand and appreciation for our premium quality fish continues to expand globally, which is a testament to our successful diversification and our team’s ability to highlight the quality, flexibility and provenance only achievable by growing a native species in its natural waters,” said Clean Seas CEO, Rob Gratton.
“Our ability to clear excess inventory and deliver a record positive cash flow has again supported the proving out of our financial model. Farming in our new full lifecycle location in Fitzgerald Bay and acquiring our new vessel highlights our ambition and optimism for the future of our fish”.
The large reduction of inventory was part of Clean Seas’ targeted efforts to clear all frozen inventory from their 2018 and 2019 harvests while the Company was able to maintain its target of 11 months inventory cover.
Increased global demand for their Yellowtail Kingfish was attributed to increased awareness of their high quality fish with strong demand coming from the restaurant industry. This resulted in their premium sales being delivered at 47% higher than pre-pandemic levels.
Going forward, the Company is gearing itself for even higher sales growth as they seek to become the lowest cost and most sustainable producer of Yellowtail Kingfish globally. This will see Clean Seas invest $1.6 million in a heavy vessel to support their ambitions at their production. Upon delivery, the vessel is expected to deliver up to 80 tonnes of feed in a single operation
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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