Profits on the menu at Clean Seas Seafood as kingfish takes off

Chefs around the globe are picking up on the versatility of local favourite kingfish, helping Clean Seas Seafood deliver a large swing back to profitability.

Clean Seas Seafood's kingfish operations in South Australia. Picture: Supplied

Clean Seas Seafood has delivered a $40m turnaround to swing back to profit, as global interest in yellowtail kingfish picks up.

The company was sitting on larger than planned inventories as the pandemic played out, however a strategy to use that stock to drive into new markets appears to be paying off.

Chief executive Rob Gratton said the company’s flash freezing process, which uses liquid nitrogen to freeze fish in 20 minutes, means it can deliver sashimi-grade fish anywhere in world via sea freight.

This provided a cost benefit to the company, but also on a sustainability basis meant that the environmental impact was lower.

The Clean Seas annual financial report shows both costs and profits going in the right direction, as revenue for the full year increased 37 per cent to $66.2m.

The Port Lincoln-based company sold 3757 tonnes of fish, up 19 per cent, and posted a net profit of $8.67m, up from a loss of $32.1m in the previous financial year.

The company’s numbers were solid across the board, with revenue per kilogram up from $15.31 to $17.61 and production costs falling.

Clean Seas Seafood chief executive Rob Gratton at the company’s Kingfish farm near Port Lincoln in South Australia’s Spencer Gulf. Picture: Astyn Reid

Mr Gratton said while kingfish had long been recognised as a top-shelf sashimi product, it also cooked well in the pan and in tagines and curries, and the fast freezing process meant quality was preserved to the plate.

“We’ve long suspected that the fish will work very well in a variety of formats - as a cooked centre-plate fish, cooking from frozen, into some of the specialty channels and mid-tier food service channels, so that’s been really exciting that that has happened.

“But also how strongly our provenance position - growing a native fish in its natural waters - how that’s been taken to by the market, I think that explains where price is going as well as volume.’’

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In its release to the ASX, Clean Seas said it was “able to use excess inventory in FY22 to substantially grow frozen sales volumes by 20 per cent on the back of its SensoryFresh freezing technology.

“This has allowed Clean Seas to offset the higher airfreight charges as a result of Covid-related transport disruptions with greater utilisation of a lower cost and lower carbon footprint frozen supply chain.

“Clean Seas has made substantial progress to rectify inventory levels, evidenced by production costs reducing to $12.38/kg in FY22 (from $15.29).

“Continued improvements in production costs are expected in future years, notwithstanding that the increasing cost of feed has put significant pressure on costs.’’

Mr Gratton said going forward there was a continued focus on cost reduction and expanding its market reach.

“I think the addressable markets are there, we’ve got the marine leases to nearly triple production, and operationalising that in the right way ... while we grow the business, will be our focus.’’

Clean Seas shares were 1.6 per cent higher at 62.5c in morning trade on Wednesday.

The company did not declare a final dividend.