Clean Seas Seafood Limited's performance for the half-year ended 31 December 2023

Clean Seas Sustainable Seafood (ASX: $CSS) has reported a statutory loss of A$26.0 million after tax for the first half of FY24. This loss is attributed to the recognition of impairments aimed at eliminating excess biomass and reducing the value of frozen inventory. Despite facing persistent challenges in the market and high costs, Clean Seas achieved underlying earnings before interest, tax, depreciation, and amortization (EBITDA) of A$0.2 million.

Executive Commentary on Financial Performance and Operational Review

Clean Seas' Board and Management have disclosed a statutory loss of A$26.0 million after tax for the first half of FY24. This loss is attributed to the recognition of impairments aimed at eliminating excess biomass and reducing the value of frozen inventory. Statutory profitability was further affected by the seasonal growth profile of the Company's Yellowtail Kingfish. Despite these challenges, Clean Seas managed to maintain an attractive pricing level at A$22.53/kg, which helped mitigate some of the cost increases. In H1 FY24, total sales volume amounted to 1,513 tonnes, which was down 1% from the corresponding period reflecting challenging market conditions prevailing throughout the period. Revenue was A$34.1 million in 1H FY24, marking a 0.4% decrease from H1 FY23.

Summary of Financial Performance and Outlook

Clean Seas Sustainable Seafood (ASX: $CSS) reported a statutory loss of A$26.0 million after tax for the first half of FY24, primarily attributed to impairments and seasonal growth profile challenges. Despite this, the company achieved underlying EBITDA of A$0.2 million and maintained an attractive pricing level at A$22.53/kg. The company undertook an operational review to drive efficiencies and improvements, aiming to deliver a 'right-sized' business with sales and production in equilibrium at circa 3,000 tonnes per annum. Clean Seas aims to leverage premium market channels and positioning to maintain pricing while focusing on infrastructure and automation investments to offset competitive market forces and input cost pressures. The company expects to complete the implementation of the Operational Review by the end of March 2024, resulting in a significant reduction in funding required for infrastructure and working capital, reduced operational and financial risk, and a faster pathway to profitability and free cash flows.