H1 FY25 Results

27 Feb 2025 23:09 CET

28 February 2025

Clean Seas Seafood 1H FY25 Results


Clean Seas Seafood Limited (ASX: CSS, OSE: CSS, the Company), the global leader
in full cycle breeding, production and sale of Yellowtail Kingfish, announces
its 1H FY25 results.

The Half Year Results in full are attached to this announcement.


Financial Performance Change
Production Metrics 1H FY25 1H FY24 (Fav/Unfav)
Tonnes sold (WWE) 1,313 1,513 ▼-13%
Net Growth (tonnes) 187 826 ▼-77%
Harvest volumes (tonnes) 1,162 2,107 ▼-45%
Closing Live Fish Biomass (tonnes) 1,576 2,710 ▼-42%
Frozen inventory 95 531 ▼-82%
Operating Results1 (A$’000)
Revenue 30,510 34,083 ▼(3,573)
Net AASB 141 losses (14,099) (7,151) ▼(6,948)
Impairment (13,978) (12,170) ▼(1,808)
Statutory loss after tax (32,645) (25,946) ▼(6,699)
Operating cash flows 5,681 (2,722) ▲8,403
Free cash flows 4,295 (5,609) ▲9,904
Net debt (compared to 30 June 2024) 11,835 10,329 ▼ (1,506)


Highlights:
• Revenue down 10.4% to $30.5 million due to lower harvest volumes
• Realised price up 3% to $23.24/kg reflecting constrained supply and strong
demand for premium Kingfish
• Loss on biological assets of $14.1 million due to poor performance of the Year
Class 24 cohort
• Post balance date announcement of non-binding, indicative and incomplete
proposal offer from Yumbah Aquaculture Ltd (Yumbah) to merge with CSS by way of
a scheme of arrangement
• Impairment of $14.0 million recognised
• Statutory net loss of $32.6 million as a result of impairment and loss on
biological assets
• Operating cash flows of $5.7 million, up $8.4 million, and free cash flows of
$4.3 million, up $9.9 million reflect strong price and efficiency improvements
 
Financial Performance

In 1HY25, the Company recorded a $32.6 million statutory loss after tax. While
the Company’s results are typically impacted by seasonal growth of Kingfish, the
1HY25 loss was specifically impacted by the higher-than-expected mortalities in
the Year Class 24 cohort of fish which resulted in a AASB 141 net loss from
changes in fair value of live fish of $14.1 million as compared to a loss of
$7.2 million in the prior comparative period. Additionally, the Company
recognised a $14.0 million impairment of assets following a formal impairment
assessment driven by the presence of several indicators of impairment. The
resulting net asset written down value in use of $29.3 million is consistent
with the valuation of the Group under the Yumbah Proposal.

Total assets reduced significantly from $87.0 million at 30 June 2024 to $49.5
million at 31 December 2024, mainly as a result of lower biological assets due
to the Year Class 24 mortalities, impairment of assets and selldown of frozen
inventory over 1HY25.

Total liabilities reduced from $25.0 million at 30 June 2024 to $20.1 million at
31 December 2024, mainly due to timing of working capital, repayment of
insurance premium funding and movements in the trade finance facility resulting
in maturities and utilisations.

Operating cash flows in 1HY25 of $5.7 million were a considerable improvement
over the $2.7million 1HY24 outflow. This was due to improvements resulting from
the operational review and smaller footprint along with reduced feed purchases
in 1HY25 due to the level of opening stock on hand.

Investing cash flows in 1HY25 of $1.4 million compares to $2.9 million in 1HY24,
with the variance largely due to progress payments on the new feed barge (Eyre
Spirit) made in the prior comparative period.

Financing cash outflows of $7.8 million in 1HY25, compares unfavourably to the
$5.8 million inflow in 1HY24, largely due to $6.1 million of the first tranche
of a two-tranche placement being received in 1HY24 (net of fees) and
significantly higher repayments of borrowings in 1HY25 of $9.0 million as
compared to only $1.1 million in 1HY24.

Year Class 2024 mortalities

On 27 November 2024, Clean Seas announced to the ASX that it was experiencing
higher than expected mortalities within the Year Class 2024 cohort of fish.

On 20 December 2024, the Company issued an update following a comprehensive
investigation into the elevated mortalities among the remaining Year Class 24
cohort. This review included an analysis of historical health sampling from
September to November 2024, an assessment of mortality conditions within Year
Class 24, and examinations of samples from the surviving fish. The investigation
identified a Condition Factor threshold of 1.30, above which fish are reasonably
expected to survive through to harvest. This threshold now serves as a key
reference for the Company in forecasting the harvest potential of Year Class 24
and projecting sales volumes.

Based on this data, Clean Seas determined that approximately 25% of the
remaining Year Class 24 fish are unlikely to survive through to harvest, leading
to an estimated harvest potential range of 250,000 to 300,000 Year Class 24
fish.

Merger Proposal from Yumbah Aquaculture

On 19 February 2025, Clean Seas announced that it had received a non-binding,
indicative and incomplete proposal from Yumbah to merge with CSS through the
acquisition of 100% of CSS shares by way of a scheme of arrangement offering
$0.14 cash per share with a scrip alternative in Yumbah (Proposal).

An Independent Board Committee (IBC) of CSS has determined that it is in the
best interests of CSS shareholders to progress the Proposal and allow Yumbah to
undertake further due diligence.

CSS and Yumbah have entered into a Process Deed under which Yumbah has been
granted until 24 March 2025 to undertake exclusive due diligence and
negotiations on a binding Scheme Implementation Deed. The Process Deed contains
customary deal protection mechanisms, fiduciary exclusions and a matching right
for Yumbah in the event of a competing proposal.

CSS shareholders do not need to take any action in relation to the Proposal. The
IBC will continue to keep shareholders and the market informed of developments.
The IBC notes that there is no certainty that the engagement between CSS and
Yumbah will result in a change of control transaction or an offer capable of
acceptance by CSS shareholders.
The Board notes that the inherent operational risks in aquaculture may impact
future results.

Authorised for release by the Board of Clean Seas Seafood Limited.

For further information on Clean Seas Seafood, please contact:
Rob Gratton
CEO
rob.gratton@cleanseas.com.au
+61 434 148 979

About Clean Seas Seafood

Clean Seas Seafood is a fully integrated Australian Aquaculture business listed
on the Australian Securities Exchange (ASX) and with a secondary listing on
Euronext Growth Oslo (OSE).

Clean Seas is the global leader in full cycle breeding, farming, processing and
marketing of its Hiramasa or Yellowtail Kingfish (Seriola lalandi) and is
renowned amongst leading chefs and restaurants around the world for its
exceptional quality.

Clean Seas is recognised for innovation in its sustainable Yellowtail Kingfish
farming and has become the largest producer of aquaculture Yellowtail Kingfish
outside Japan.

For more information, visit www.cleanseas.com.au

All volumes quoted are in Whole Weight Equivalents (WWE) unless otherwise
specified.

More information:
Access the news on Oslo Bors NewsWeb site

640045_1. AsxAppendix4D and Half Year Report_ H1FY25_FINAL.pdf