Re: CSS - Clean Seas Tuna
23 January 2014
Company Announcement
We expect to release our results for the first six months once finalised in the week ending
21st February 2014."
21 February 2014
Company Announcement
Australian Securities Exchange Limited
CLEAN SEAS TUNA LIMITED (ASX: CSS): HALF YEAR FINANCIAL RESULTS
Results Overview
Clean Seas Tuna Ltd (“Clean Seas”) is pleased to announce an after tax profit of $4.004 million for
the 6 months ended 31st December 2013, which includes a $6.157 R&D tax rebate previously
advised to the market.
Yellowtail Kingfish grow more rapidly in the warm waters of the summer season, during the second
half of the financial year, and have a naturally lower growth rate in the cooler first six months of the
financial year. As a result, the Company’s financial performance is seasonal, with second half
performance traditionally exceeding profitability in the first half of the financial year. Accordingly
the substantial 56% improvement from underlying operations achieved in this first half (Loss: $1.933
million) compared to the previous corresponding period (Loss: $4.373 million) reflects an
exceptional improvement in sustainable biological performance.
Expansion Confidence
We expect current biological gains to continue to underpin the Company’s future performance as we
profitably and sustainably expand production to meet growing global demand. This, together with
our improved current period results, provide the Company’s Directors and Management with a
heightened degree of confidence that we are ahead of our expectations to deliver underlying
operational profitability.
This confidence in our progress towards rebuilding a profitable Yellowtail Kingfish business is
strengthened by improved feed and risk management practices leading to:
• A reduction in mortalities to historically low levels;
• An improvement in growth rates, returning to normal levels and a consequential
improvement in feed conversion ratios;
• A return to robust health and appearance reflected in excellent farmgate prices exceeding
$14.00/kg;
• Encouraging performance of this season’s juveniles bred from selected broodstock raised in
the Company’s Yellowtail Kingfish selective breeding program; and
• An earlier stocking of our fingerlings leading to an accelerated growth, supporting our return
to 1500 tonne production per annum
Solid Cash Position
Following a successful Share Purchase Plan (closing in December 2013), the Company’s cash position
as at December 31, 2013 ($16.1 million) lays an important and pivotal foundation to support the
successful execution of the Company’s planned Yellowtail Kingfish expansion to harvest 1,500
tonnes.
Continued Fish Performance Improvement
Kingfish biomass growth and fish survival are exceeding our budgets, forecasts and previous
historical fish performance.
Over the next six months we will work diligently to continue to deliver fish performance well above
our budget. We have begun increasing our monthly sales tonnages and will continue to do so up to
February 2015, when we will reach our initial monthly sale target, achieving the equivalent of 1500
tonnes of sales per annum.
The figures set out below illustrate how our fish performance is well ahead of our budget. Figure 1
shows the monthly performance with higher seasonal growth rates shown in the Summer months.
Actual performance year to date is significantly ahead of our budget at the start of the year. Our
revised forecast for the remainder of the year sees this trend continuing. Figure 2 below shows
cumulative performance year to date against budget.
Solid Cash Position
Following a successful Share Purchase Plan (closing in December 2013), the Company’s cash position
as at December 31, 2013 ($16.1 million) lays an important and pivotal foundation to support the
successful execution of the Company’s planned Yellowtail Kingfish expansion to harvest 1,500
tonnes.
Continued Fish Performance Improvement
Kingfish biomass growth and fish survival are exceeding our budgets, forecasts and previous
historical fish performance.
Over the next six months we will work diligently to continue to deliver fish performance well above
our budget. We have begun increasing our monthly sales tonnages and will continue to do so up to
February 2015, when we will reach our initial monthly sale target, achieving the equivalent of 1500
tonnes of sales per annum.
The figures set out below illustrate how our fish performance is well ahead of our budget. Figure 1
shows the monthly performance with higher seasonal growth rates shown in the Summer months.
Actual performance year to date is significantly ahead of our budget at the start of the year. Our
revised forecast for the remainder of the year sees this trend continuing.
Anticipated FY2014 Results
As earlier outlined, the Company’s earnings are seasonal. Higher earnings are generally recorded in
the second half of each financial year, due to higher Summer and Autumn fish growth rates, when
warmer seawater temperatures deliver improved growing conditions.
Having regard to progress to date, the Board continues to be optimistic that with a continuation of
the solid first half fish performance for the balance of this financial year, the Company could achieve
full year underlying profitability some 12 months ahead of our previous FY2015 expectations. That
said, the Board reiterates and acknowledges that the inherent operational risks in aquaculture can
very clearly impact upon this outcome.
The Board will continue to keep the market informed of fish performance outcomes over the key
summer growing months ahead of us.
As previously advised, the full year FY2014 statutory results will include the $6.157million R&D
rebate received in October 2013, and an allowance for an additional smaller R&D rebate claim for
2014. The anticipated R&D rebate for 2014 will be included in the current year results now that the
Company has formalised its R&D accounting and with turnover continuing below $20 million.
The FY2014 results are also expected to include an abnormal non-cash income item arising from a
$3.9million credit for deferred income. This deferred income is expected to arise on completion of
reporting and other obligations in relation to an AusIndustry grant received in respect of the
establishment of its Southern Bluefin Tuna program, the costs of which were written off in 1st Half
FY2013.
The Company is pleased to continue to deliver performance above expectations and is focussed on
its ongoing Yellowtail Kingfish performance, maintaining premium market returns as well as key
underlying development strategies. The Board remains confident of its continuing progress against
those objectives.
Planning has also begun for continued expansion of our Yelllowtail Kingfish business beyond 1500
tonnes per annum, towards our next target of 3,000 tonnes per annum. The Company is mindful of
the need to be market driven to ensure we continue to achieve premium pricing for our premium
product. The Company is beginning the process to step up our marketing efforts to support
expansion of consumer and market demand for premium Yellowtail Kingfish.