CSS - Clean Seas Seafood

[truevalue]

Re: CSS - Clean Seas Tuna

Hi TRue,
I thought this new mgr they got was a gun ! you would of thought he would of overseen the press releases. Mr J E-F and CA should of come up with somthing better than what they have. The media ring you up for info so you must put your best foot forward but i have a feeling that certain people that started this bus. find it hard to let the reins go ! IMO

It is pretty clear Rear Window haven't called CSS to talk about the story. They have obviously relied on scuttlebutt from a poorly informed broker or fund manager.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Hi Truevalue,

I admire your patience and faith in CSS.

I am still keeping a close eye on CSS but my head still tells me to hold off for now. I have allocated a portion of my CSS funds to TGR in the aquaculture space but will monitor CSS very carefully over the next couple of months, particularly the interim results in Feb.
The SBT spawning is commenable but , non the less, somewhat expected.
I will be looking very closely at the YTK part of the business to see if cash flow and sales will support the long ( 2-3 year ) period that will be needed to grow and develop the SBT side of the business.
I am still of the view that further Cap raisings are in the wings and there is ample time to invest in CSS for the long haul.
As I have stated earlier the easy money opportunity has been lost for CSS, it will be at the mercy of daytraders and speculators for the foreseable future.
Despite their success in breeding, last year, I am still non the wiser on the magnitude of success they achieved , particularly mortality and growth rates.
Anyway, good luck to yourself and holders. If the conditions are right, I hope to rejoin you again someday.

 

[Sdajii]

Re: CSS - Clean Seas Tuna

Hi Truevalue,

I admire your patience and faith in CSS.

I am still keeping a close eye on CSS but my head still tells me to hold off for now. I have allocated a portion of my CSS funds to TGR in the aquaculture space but will monitor CSS very carefully over the next couple of months, particularly the interim results in Feb.
The SBT spawning is commenable but , non the less, somewhat expected.
I will be looking very closely at the YTK part of the business to see if cash flow and sales will support the long ( 2-3 year ) period that will be needed to grow and develop the SBT side of the business.
I am still of the view that further Cap raisings are in the wings and there is ample time to invest in CSS for the long haul.
As I have stated earlier the easy money opportunity has been lost for CSS, it will be at the mercy of daytraders and speculators for the foreseable future.
Despite their success in breeding, last year, I am still non the wiser on the magnitude of success they achieved , particularly mortality and growth rates.
Anyway, good luck to yourself and holders. If the conditions are right, I hope to rejoin you again someday.

Last year they had an extremely small number of larvae succesfully raised, but the number isn't important at all. They weren't attempting to make a trial commercial run, they just needed to try different things to work out how to do it. It doesn't matter whether it was 20 or 20,000 (well, at 20,000 it would start to become lucrative, but you know what I mean). The fact is, they tried different things and got it to work with a small few. Now they just have to do what worked on those few this year, on the whole lot (other than a few which they will experiment with a little to see if they can get slightly better results with a few small tweaks). If you try to bake a million cakes with 10,000 different recipes, and one recipe works, you'll only have 100 cakes, which is a dismal result, but the next year you can use that recipe on all million trials, and you should have almost a million cakes. Last year they were just getting the recipe right.

This year they'll have a go at commercial production on a small scale (not to try to make a profit, just to test the difficult part of the recipe and test/perfect the rest/easy part of the recipe). If it works, there is no secret that there will be another fund raiser, I've discussed that directly with someone on the CSS board, and it's pretty obvious - the new infrastructure isn't going to build itself for free. However, if that is the case, it will be happening because they know they have the complete commercial recipe worked out and tested, and are very close to commercial production and realised profits, the fund raising will be to construct the necessary infrastructure to use the recipe on a commercial scale. In that scenario (which is entirely likely), the share price will reflect how close the company is to realised profits, so the SPP will be substantially higher than the January 2010 share price. Right now we're testing the larvae rearing recipe - getting them to fingerlings. At that stage they're tough little monsters which will eat and grow like mad. It has already been done, they just have to confirm it on a large (ish) scale.

 

[truevalue]

Re: CSS - Clean Seas Tuna

After all my panning of the AFR yesterday there are actually two big articles today on the state of the SBT industry (pages 3 and 45 if you are looking) and even a small mention of CSS' place in the future of the industry.

Oracle, I am still very opptimistic but you can imagine my patience has been sorely tested.

Apart from Rabobank pulling out the rug last year, CSS has performed more or less to my expections operationally. I was always a little concerned they were growing YTK too quickly but I am confident that is now under control. SBT milestones have been hit and they will significantly improve their mortality results this year vs last year. Being able to put fingerlings into sea cages will be a major factor in regards to mortality. They are 2-3 years away from commercial sales but so are many mining companies and CSS is sitting on a huge resource that the market will be looking to value at some time in the future. Given the cuts in fishing quotas recently I can imagine Sarin and all the other Port Lincoln tuna barons coming on bended knee wanting to buy CSS fingerlings in a couple of months.

All the arrows are pointing in the right direction and this company has too many credible people endorsing their future that I cannot see it coming to nothing.

 

[JackC]

Re: CSS - Clean Seas Tuna

An article from the Business Spectator on the 23rd Jan

James Thomson
RICH PICKINGS: Fishing for a fortune

It’s been a big week at South Australian aquaculture outfit Clean Seas Tuna.

The company, which is trying to establish an artificial breeding and commercial farming operation for Southern Bluefin Tuna, announced on January 19 that its broodstock had started successfully spawning, with the resultant fingerlings (very young fish) expected to be transferred to sea cages in March.

The news – another milestone in Clean Seas' journey towards commercial fish farming – sent the company’s stock up 12.5 per cent on the day, with 17 million shares (about 56 times the average daily turnover over the past 12 months) changing hands.

That slice of good news will no doubt have thrilled Clean Seas executive chairman, Hagen Stehr, an old-school tuna fisherman from Port Lincoln who has become obsessed with his artificial breeding dream.

While Clean Seas is essentially a technology company, Stehr is hardly your typical boffin. A few years ago I was lucky enough to travel to Port Lincoln for a story and spent the best part of two days getting a guided tour of his operations.

He is without doubt the most interesting rich entrepreneur I have ever met. A former member of the German merchant navy and the French Foreign Legion, Stehr jumped ship in Port Lincoln in 1960, fell in love with a local girl (his wife Anna) and joined the local fishing industry.

He’s loud, brash, generous and never stops talking – one minute he would be telling us about the wild west-like antics that used to occur on the tuna boats, the next minute he’d be explaining the process by which fish is delivered from Port Lincoln to the fish markets of Tokyo.

But Stehr’s passion for the Clean Seas breeding dream, and his willingness to spend millions backing the company, is impressive.

His basic argument is that with fish stocks declining and food security an ever-growing problem, artificially breeding SBT is the only way to ensure supply can meet demand. And he’s hoping his theory will help make him very, very rich.

Stehr is one of two Port Lincoln fishermen on BRW’s Rich 200, with fellow tuna baron Sam Sarin. The pair, along with fisherman-turned-thoroughbred-breeder Tony Santic, helped make Port Lincoln the richest town in Australia on a per capita basis.

But aside from Clean Seas success, it’s been a tough period for the town and the tuna barons.

Tuna prices have remained sluggish for the past 12 months, thanks in part to diminished demand from the key market of Japan, where consumers appear to have pulled back because of the global financial crisis.

In November, the annual fishing quota for SBT was slashed by 24 per cent for 2010 and 2011. Then, in a bad start to the new year, bushfires in the Port Lincoln region last week cost the Stehr Group more than $1 million in damages, destroying a highly prized vineyard, a net shed – which held about 10 large nets worth $30,000 to $40,000 each – and a workshop.

But the cut to the fishing quota, ordered by the global Commission for the Conservation of Southern Bluefin Tuna, was by far the biggest blow, according to Brian Jeffries, chief executive of the Australian Southern Bluefin Tuna Industry Association.

Fishing operations – including Sarin’s Australian Fishing Enterprises and Stehr’s company Stehr Group – had readied boats, aircraft, staff and other infrastructure in the expectation that the quota would not be cut. Then, just one month before the fishing season was to start, came the news that the sector dreaded.

“The timing was the biggest problem,” Jeffries says. “There was an initial period of retrenchments and there will be more in 2010, although the main retrenchments will occur in supporting industries.”

All told, it is estimated the sector supports 4500 jobs in South Australia.

The quota cuts are also likely to have sliced a touch more off the fortunes of Sarin (whose was revised down by BRW last year from $565 million to $258 million) and Stehr (who dropped from $271 million to $168 million).

According to official government data, Sarin holds around 40 per cent of Australia’s SBT quota, or about 2170 tonnes. Stehr Group holds just over 700 tonnes, while Tony Santic’s company Tony’s Tuna holds just over 1200 tonnes.

About two years ago, tuna prices were so strong that a tonne of tuna was valued at about $180,000. Today, the level of uncertainty in the industry means it’s extremely difficult to get a valuation.

A professional valuer, who regularly values quotas for banks and other finance companies, says he’s all but given up trying to put a price on the quotas.

“No-one is selling, and certainly no-one is interested in buying,” he says.

When pushed, he gives a rough estimate of $110,000 a tonne, which values Sarin’s quota at over $230 million, Santic’s at $132 million and Stehr’s quota at a bit over $77 million (his stake in Clean Seas is worth around $50 million).

While these estimates are clearly rough, they do indicate a sharp fall from less than three years ago.

But there is some hope on the horizon. Jeffries expects tuna prices could double later in 2010, as a stockpile of tuna sitting in Japanese freezer rooms runs out and as cuts to the quotas of Northern Bluefin Tuna fisherman in the Mediterranean Sea start to push up demand for SBT. The strong Australian dollar is also helping to reduce feed prices.

The restructuring done by the Port Lincoln fisherman when the SBT quota cut was announced should ensure better profits as the year progresses.

“They’ve tailored their business to their operations to that lower costs base which will leave them well placed when prices do recover,” says Jeffries.

If Northern Bluefin Tuna supply remains constrained and the SBT quota is restored for the 2012 season, the barons of Port Lincoln should be in for a few good years.

But after that, their greatest threat could come from within – specifically, from Hagen Stehr’s Clean Seas group.

Clean Seas' goals is to produce 10,000 tonnes of commercially farmed SBT – that’s double Australia’s existing quota – by 2015.

If he’s successful – and there is still much water to go under the bridge – then Clean Seas is likely to be worth much more than its current market capitalisation of $117 million.

But while Stehr might get rich, how this sudden surge in supply might affect his fellow tuna barons – and their fortunes – is unclear. It’s likely prices would come under pressure, although the sushi purists of Japan may still favour fresh fish over farmed.

Whatever happens, it appears the stormy seas faced by Port Lincoln’s tuna barons in the last 12 months are unlikely to abate for some time yet

 

[Sdajii]

Re: CSS - Clean Seas Tuna

A positive future and a scarey present equals an undervalued stock. Great if you want to buy now and hang on for the medium to long term If we get even a small subcommercial batch of those babies into the sea cages by March and into Japanese sushi restaurants later in the year, things are going to be looking very rosey

A current situation of low prices (although, I don't see how anything over $100 per kg is a low price!) due to a temporary financial crisis which should be over by the time full production is steaming ahead has things further undervalued. The wild supply is only going to drop, tuna prices are only going to climb, and Cleanseas is only going to get better at producing the SBT in higher and higher quality as they learn more and more. This has "WIN" written all over it.

 

[drlog]

Re: CSS - Clean Seas Tuna

Looks like they submitted the quarterly report today. Looks like they burnt through some cash pretty quickly - net operating cash outflow was 7mil.

I think it is very clear that this year will be another loss.

However, there is a tid-bit of good news information. They are saying that the spawn continues and that larvae are in onshore tanks, feeding on rotifers.

Hmm, the share price has fallen a lot since their announcement, back to the same level it was BEFORE the announcement of successful spawning. Any ideas?

Oh well, I shall wait and hold.

 

[Nero64]

Re: CSS - Clean Seas Tuna

It is unfortunate that no good news about the spawning wasn't released in Dec before the spp offer closed. I was waiting for this before I took the risk of buying in at 25c

Then some news came out last week but there was no follow through on the share price the day after even though the market was up. On the day it only went up 4c or so from the previous day.

I'm thinking that the small gain may have been a chance for many investors to exit for a quick couple of grand, which could mean that there will be no support around 25c. If the market goes lower who knows where the share price will end up. I hope it doesn't come to this.

I don't think the company's lethargic and little information as possible approach is helping any holders.

The spp issue at a 50% discount to the pre trading halt price was not the smartest thing to do considering many have held this stock for a long time.

Some huge orders went in around 25c. Some up to 400 000 units just so a few cents appreciation could get them out even so they could get out of this high risk low return company.

 

[bennywizard]

CSS - Clean Seas Tuna

The whole market is down, so its not surprising that CSS is also.The fact that they have young feeding is a very positive sign, the next important announcement will be how successful they are were at raising the young. If they got the formula right then they will have completed the hardest part and the rest is simply multiplying the process to economies of scale and the company will be very profitable.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

The most important aspects of the quarterly report , for me, are the receipts from customers ( product sales ) and working capital ( growout / husbandry ) expenses. The sales were marginally higher but were exceeded by working capital expenses. Working Capital expenses will increase exponentially over the next few years due to the high cost of SBT growout/husbandry and are unlikely to be matched by product sales.
The report doesn't indicate if this is increased YTK sales alone , or, includes the rundown of Mulloway inventory.
I have always believed it is essential for CSS to create an viable and profitible YTK / Mulloway business to help support the immense expense in propogation and growout of SBT. Sadly, for investors, CSS will need to rely on Cap Raisings to support their financial requirements. I think this is why Rabo Bank withdrew support.
As for early sales of SBT by year end ( 2-3kg fish ), they will only get skipjack( canned tuna ) tuna prices which would be commercially unviable. I think they will need around 3 years to reach 30-40kg fish to achieve premium sashimi prices.
It will be intersting to see the details in the interim report in Feb.

 

[Basilica]

Re: CSS - Clean Seas Tuna

As for early sales of SBT by year end ( 2-3kg fish ), they will only get skipjack( canned tuna ) tuna prices which would be commercially unviable.

I agree if the small fish are sold into the food market the price will be way too low.
However a far better price could be achieved in just one year from now if they included live sale of SBT to the many growers in the area that are limited by the quota. It would assist thier cash flow and per KG may return more than even the sushi market. (and they could swim to the buyer instead of flying)

 

[tge oracle]

Re: CSS - Clean Seas Tuna

I agree if the small fish are sold into the food market the price will be way too low.
However a far better price could be achieved in just one year from now if they included live sale of SBT to the many growers in the area that are limited by the quota. It would assist thier cash flow and per KG may return more than even the sushi market. (and they could swim to the buyer instead of flying)

Hi Basilica,

I have never seen any business plan from CSS that includes sales of juvenile SBT to Port Lincoln fishermen. I am very cautious of businesses that change there business model without explanation. The problem I have with this plan, if it is indeed the case, is that they will reduce, perhaps dramatically, their stock for growout to supply the Japanses sashimi market. This has always been their main goal since inception. I am not convinced the Port Lincoln fishermen will pay that much for the juvenile SBT as they will need to growout the SBT for a further couple of years and shoulder the cost of doing so.

 

[drlog]

Re: CSS - Clean Seas Tuna

All of this is just speculation on what CSS could/might do. No one from CSS has said "we are going to sell young fish to other fisheries".

 

[Basilica]

Re: CSS - Clean Seas Tuna

Hi Basilica,

I have never seen any business plan from CSS that includes sales of juvenile SBT to Port Lincoln fishermen. I am very cautious of businesses that change there business model without explanation. The problem I have with this plan, if it is indeed the case, is that they will reduce, perhaps dramatically, their stock for growout to supply the Japanses sashimi market. This has always been their main goal since inception. I am not convinced the Port Lincoln fishermen will pay that much for the juvenile SBT as they will need to growout the SBT for a further couple of years and shoulder the cost of doing so.

Hi tge oracle,
I have no info that CSS is planning what i suggested. To me it seemed like a logical solution to the future cash flow problems. I thought the local growers would be happy to pay a very fair price to expand beyond thier quota limitations

All of this is just speculation on what CSS could/might do. No one from CSS has said "we are going to sell young fish to other fisheries".

Pure speculation drlog, and perhaps discussing it here has little merit. It was brought up in response to selling small food fish that i consider a lesser idea.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Basilica,

Yes, I think it would be a mistake to deviate from their business plan.
The problems I see with selling juvenile SBT to other fisheries are twofold:

1. I don't think they will get much for the juvenile SBT.
2. A greater concern would be over supplying the market. The very reason CSS embarked on this project was to supply aquaculture bred SBT themselves.
They have undertaken all of the commercial risk over the past 5 years, why sell to competitors and potentially depress the market price for aquaculture bred SBT.
I would hope they don't sell to anybody and growout the SBT as planned.

 

[Basilica]

Re: CSS - Clean Seas Tuna

Basilica,

Yes, I think it would be a mistake to deviate from their business plan.
The problems I see with selling juvenile SBT to other fisheries are twofold:

1. I don't think they will get much for the juvenile SBT.
2. A greater concern would be over supplying the market. The very reason CSS embarked on this project was to supply aquaculture bred SBT themselves.
They have undertaken all of the commercial risk over the past 5 years, why sell to competitors and potentially depress the market price for aquaculture bred SBT.
I would hope they don't sell to anybody and growout the SBT as planned.

You may be right oracle, And since it was never part of thier business plan it is hardly worth considering.

 

[Qjumpa]

Re: CSS - Clean Seas Tuna

.24c

CSS have got to be more open about direction

seriously, how low will it go!

:behead:

 

[Speculator]

Re: CSS - Clean Seas Tuna

.24c

CSS have got to be more open about direction

seriously, how low will it go!

:behead:

haha Qjumpa

This one got alot of media coverage and getting that award in time magazine definatley put it in the lime light, also saw it in a list of stocks 'that have the power to make a man a millionare'.

So my take is a lot of impatient people moving out to capitalise on other plays, throw in the market sentiment over the last 3 weeks and a statement from the directors that we will no longer be getting regular updates (the short term guys like dates) and you have a depressed SP.

BTW from looking at the shart the only way it will go lower is if the co goes bust... imo.

I'm in for the long haul

...with a small parcel relative to portfolio of course.

 

[medelm]

Re: CSS - Clean Seas Tuna

Im with Speculator, I dont think they will head any lower, 0.24 seems to be a strong resistance and the old 52 week low of 0.235 hasnt been hit in the last week where it had many opportunities throughout the days.

DISC: Holding.

 

[Liar's Poker]

Re: CSS - Clean Seas Tuna

haha Qjumpa

This one got alot of media coverage and getting that award in time magazine definatley put it in the lime light, also saw it in a list of stocks 'that have the power to make a man a millionare'.

So my take is a lot of impatient people moving out to capitalise on other plays, throw in the market sentiment over the last 3 weeks and a statement from the directors that we will no longer be getting regular updates (the short term guys like dates) and you have a depressed SP.

BTW from looking at the shart the only way it will go lower is if the co goes bust... imo.

I'm in for the long haul

...with a small parcel relative to portfolio of course.

Good summary - I agree. Without announcements, the sellers are always going to be more dominant.

Note: Currently holding CSS.