Troubled times for Atlantic Sapphire as major shareholder jumps ship

    Financial problems continue for the company aiming to become the world's biggest land-based salmon farmer.

    Land-based aquaculture company Atlantic Sapphire has suffered another blow to its finances this week, with the news that one of its main shareholders is pulling out of the company.

    Norwegian financial newspaper Finansavisen reported that Clipper AS, a company associated with Norwegian shipping magnate Inge Steensland and his family, has sold off its shares, amounting to a loss of NOK 48.8 million (USD 4.5 million, EUR 4.2 million).

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    The news comes at a difficult time for the company. Atlantic Sapphire’s reported sales earnings results for the half year ending June 30, 2023 was USD 8.06 million compared to USD 9.68 million during the same period in 2022.

    Meanwhile, the company’s net loss stood at USD 48.38 million compared to USD 14.47 million one year ago.

    Biomass problems provokes Atlantic Sapphire stock market drop

    In the second quarter of 2023, Atlantic Sapphire reported production of 870 metric tons of head-on gutted (HOG), 29% less in comparison to last year, and only a fraction of its total capacity of 9,500 tonnes for its Phase 1 facility.

    Atlantic Sapphire’s fortunes took a turn for the worse in August, when shares in the company plunged 18% following news of difficulties at its Miami site due to Florida‘s summer heatwave.

    “Lower than expected biomass gain in Q3 2023 to date, primarily due to elevated farming temperatures and its consequences for overall water quality, has resulted in a lower standing biomass than earlier estimated,” Atlantic Sapphire said in a stock exchange announcement.

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    “More water chillers will be installed to ensure sufficient capacity at peak demand for cooling and the company expects the temperature issue to be solved in Q3 2023. All else equal, this indicates a lower biomass gain and revenue in H2 2023 compared to what the company expected.”

    The announcement provoked Atlantic Sapphire stock to nosedive 18% in just 24 hours, from NOK 6.06 (USD 0.59, EUR 0.54) on August 7 to NOK 4.96 (USD 0.49, EUR 0.44) at close of trading on August 8.

    As of September 5, 2023, Atlantic Sapphire stocks stand at NOK 2.45, showing a drop of 67.03% since January 1.

    Largest shareholders promise “continued financial support”, according to company statement

    However, despite these setbacks, the company says it expects to weather the storm.

    “We’ll face challenges in 2023 but our focus is getting the conditions of the farm back on track,” said Atlantic Sapphire CFO Karl Oystein in a video statement.

    Meanwhile, Atlantic Sapphire’s other major shareholders are set to continue supporting the company, the company has said.

    “The largest existing shareholders represented on the Board of Directors, including Nordlaks, EW Group and Strawberry, have already indicated their continued financial support in the event of a funding round,” Atlantic Sapphire said in a stock exchange announcement on August 24.

    About Atlantic Sapphire

    Atlantic Sapphire ASA is a Norway-based aquaculture company. The company breeds Bluehouse (land-raised) salmon farming and transforms protein production globally. Atlantic Sapphire has a focus on Research and Development (R&D) and innovation to equip the Company with the technology and procedures that enable the company to commercially scale up production in end markets close to the consumer. In the USA, the Company operates in Homestead, Florida. The Company has the capacity to harvest approximately 10,000 tons (HOG) of salmon annually. In its Phase 2 expansion, Atlantic Sapphire aims to bring total annual production capacity to 25,000 tons, and has a targeted harvest volume in 2031 of 220,000 tons.

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