(Alliance News) - Aquaculture genetics firm Benchmark Holdings PLC said Friday its interim loss widened as revenue declined due to continued effects of weak shrimp markets and an oversupply of Artemia in its Advanced Nutrition business.
Benchmark develops treatments and preventative measures for diseases in farmed fish, such as salmon. It also develops disease-resistant salmon and shrimp.
For the six months to the end of March, Benchmark's pretax loss widened to GBP18.9 million from GBP6.2 million the year before. Adjusted earnings before interest, taxes, depreciation and amortisation dropped by 61% to GBP2.8 million from GBP7.3 million.
Revenue for the period declined by 15% to GBP57.0 million from GBP67.4 million, as all operations reported a weaker performance.
In Advanced Nutrition, revenue fell as a result of weak shrimp markets, as well as the oversupply and price competition in live feed product Artemia.
Meanwhile in Genetics, there were lower egg volumes resulting from a shift from third party production and negative foreign exchange movements. Animal Health was weaker as a result of lower toll manufacturing revenue.
Concerning Covid-19, Benchmark said the salmon industry has remained robust with limited exposure to the food services sector, however the shrimp industry suffered from lower demand, prices and disrupted production.
The sea bass and bream markets has just as much exposure to the food services sector as shrimp; however the longer production cycle compared to shrimp has meant a more modest impact.
Looking ahead, weakness in shrimp markets is expected to continue through to the end of the financial year; however, there is good visibility in the order book for Genetics and resilience in the salmon market.
"Our results for the first half of the year were disappointing reflecting the weakness in the shrimp markets and oversupply of Artemia, and the additional challenges of Covid-19 in the latter part of the period. Our salmon business has been more robust in the face of the global lockdown with good visibility, and this, together with a solid cash position after our fundraising in February and our cash conservation plan, gives us confidence in managing Benchmark through this crisis," said Executive Chair Peter George.
"Our priority continues to be on completing the restructuring of the group to focus on our core aquaculture disciplines, reducing our cost base, increasing efficiency and transitioning from R&D investment into profitability. Longer term the fundamentals of our business are very attractive with an increasing need for products and solutions that enable sustainable food production," George added.
Shares in Benchmark Holdings were down 3.3% at 29.00 pence on Friday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Benchmark Holdings (BMK)