With the hospitality industry in tatters as a result of COVID-19 lockdowns last year, global easing of restrictions has been welcomed by sustainable seafood company Clean Seas Seafood (ASX: CSS) whose Yellowtail Kingfish sales are now thriving.
For the 6 months ending 31 December 2020, Clean Seas has reported 1,413 tonnes of global fish sales, a rise of 39% on their previous 6 months when the Company sold just 1,016 tonnes through the peak of pandemic lockdowns. The rise returns their sales back to the range reported for the 6 months ending 31 December 2019, when they sold 1,406t.
“Clean Seas has exited the challenging 2020 year in a good position, with sales volumes in Q2 FY21 slightly above pre-COVID levels, and a strong balance sheet with the recent renewal of the company’s banking facilities,” said Clean Seas CEO, Rob Gratton.
“Sales in existing channels have rebounded strongly as restrictions ease, and importantly, the strategic relationship with Hofseth is gaining traction with sales of Kingfish into North American markets diversifying, strengthening and growing the Clean Seas business”.
Clean Seas is the largest producer of aquaculture Yellowtail Kingfish outside Japan, and while restaurant supply has always been a major driver of fish sales, the Company has been mitigating the shutdown of restaurants through new retail channels. These include 80 retail stores and home meal kit partnerships in North America.
A similar strategy is also being rolled out in Europe where Clean Seas reports the new channels have now mitigated the decline in restaurant sales with chefs valuing the Company’s full cycle breeding programs for sustainable production.
Although sales have returned to normal, the Company is set to write down $3 million in assets following an increase of fish deaths at their Boston Bay farms, representing approximately 4.5% of their live fish biomass. Clean Seas has not disclosed the reason for the deaths but removal of fish from the location has resolved the issue and supply will not be affected due to a surplus of live fish created from COVID disruptions.
CSS shares responded well to the return of fish sales to pre-pandemic levels, reaching a high of $0.83 in morning trade, a rise of 8.5% on their previous $0.765 close.
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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