Atlantic Sapphire hit by delays and cost overruns as losses climb to $31.6m

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Heavy losses for the land-based fish farmer.

The deficit was not unexpected, and is of course a function of low harvest volumes. The company had a turnover of 2.5 million dollars, where practically all the income came from the fish farm in Hvide Sande, Denmark.

The newly built giant facility outside Miami is far behind schedule. Originally, the plan was to begin commercial harvest  here in April. Then it was postponed to the third quarter. According to today’s Q2 report, Atlantic Sapphire will now harvest “the largest fish in September”.

Delayed
“The fish’s appetite and system capacity are in line with expectations, when feeding is not held back due to construction delays,” the report for the second quarter states.

In the fourth quarter, the harvest volume will be approximately 1,000 tonnes.

“Delayed ability to operate the plant at full capacity has postponed phase 1 ‘steady state’ production to the first quarter of 2021”, it is further stated.

Atlantic Sapphire plunged 6.8 percent on the Oslo Stock Exchange after the results became known.

Immigration and access to labor related to interruptions from Covid-19 have a negative impact on the timetable. New capex estimates show a production cost of about 22 dollars per kilo of salmon.

Will refinance
At the end of July, it became known that Atlantic Sapphire had to take out 200,000 fish after experiencing high mortality due to noise and vibrations from the construction work. Emergency slaughter capacity was not completed when the problems occurred. The loss from this is estimated at five million dollars.

Following the aforementioned challenges with delays, the company will now refinance its long-term debt, which is particularly related to the company’s loan of USD 30 million to DNB.

Atlantic Sapphire currently has five million salmon, a biomass of 2,200 tonnes, swimming in the tanks at the two facilities in Denmark and the US.