Clean Seas Seafood (CSS) H2 2024 earnings summary

Executive summary

• FY24 was a transitional year marked by operational review, organizational restructure, and consolidation of farming operations to address challenging market conditions and high feed prices, with a focus on cost savings and efficiency improvements.

• Actions included a 25% reduction in staff and contractors, consolidation to a single farming site, and accelerated clearance of frozen inventory.

• Fresh pricing was maintained, but overall prices declined due to clearance of excess frozen inventory; operating profit turned negative, impacted by high feed prices and inventory clearance.

• The business is now right-sized, with sales and production in equilibrium, supporting premium market focus and resilient pricing.

• Operational Review delivered cost savings, notably reducing fish husbandry expenses and improving operating cash flow in 2H FY24.

Financial highlights

• Revenue was AUD 68.8 million, down 1% year-over-year, despite higher sales volumes, due to lower frozen prices.

• Operating EBITDA loss was AUD 5.1 million (negative AUD 1.61/kg), compared to a profit of AUD 1.21/kg in FY23, driven by higher feed costs and discounted frozen sales.

• Statutory net loss was AUD 33.5 million, impacted by impairments, AASB 141 losses, and non-recurring restructuring costs.

• FY24 sales volumes increased 3% year-over-year to 3,141 tons.

• Impairments of AUD 10.1 million for biomass reduction and AUD 2.1 million for frozen inventory were recognized.

Outlook and guidance

• FY25 sales volumes are targeted at 2,600–2,800 tons, with expectations of improved average pricing as frozen clearance sales end.

• Feed prices have eased from peaks and are expected to decline further in FY25 as supply constraints ease, with current orders at ~AUD 3.30/kg.

• Ongoing cost savings and operational efficiencies from the new model and automation are expected to drive improved profitability and cash flows.

• Deployment of automated feed barge will further support cost control and operational efficiency.