Benchmark delays SPR shrimp launch due to COVID-19
The company is building a multiplication center in Thailand but the commercial launch will be delayed until the shrimp market recovers.
Benchmark has been developing a specific pathogen resistant (SPR) shrimp to address issues facing the Asian market in recent years. SPR shrimp was initially announced to be resistant to major diseases including White Spot, Taura (TSV), NHP (Necrotising Hepatopancreatitis), IHHNV and vibriosis.
The company achieved the first test market sales of SPR shrimp in China and Indonesia, according to its Q1 and H1 results report. Trials continue in China, Thailand, Vietnam and Peru. “In light of COVID-19, we have decided to push back the commercial launch of the SPR shrimp to benefit from a recovery in the shrimp market. Construction of the multiplication center with our local partner in Thailand is ongoing albeit with some delays and we expect it to be operational by the end of this calendar year,” the company said.
The group reported revenues from continuing operations of £57 million (H1 2019: £67.4 million) and an adjusted EBITDA from continuing operations of £2.8 million in H12020 (H1 2019: £7.3 million) as a result of continued weakness in the shrimp markets, oversupply of Artemia and the early impact of the COVID-19 pandemic which overshadowed a robust performance in the Genetics business.
Genetics revenues in H1 2020 were £22.5m, in line with the prior year (H1 2019: £22.6m) and £10.4m in Q2, 3.6% below the prior year. Production and distribution of salmon eggs has been uninterrupted through the COVID-19 pandemic and the company has a good order book for the rest of the year with 100% of Salten capacity for off-season eggs sold-out.
The company signed a lease on a new grow-out facility in Curacalco, Chile which completes the infrastructure required for local production of salmon eggs. This site is now fully operational and local production of salmon eggs is expected to commence in 2021 when the first-year class of broodstock matures.
“We expect market conditions in shrimp and the operational and economic effects from the COVID-19 pandemic to continue to impact our Advanced Nutrition business for the rest of the financial year. Encouragingly, Genetics business continues to perform robustly reflecting a more stable demand for salmon and we have good visibility of the order book for the rest of the year. We are in a solid financial position following the net £42m fundraising earlier this year and expect that the measures we are taking to maintain our production and commercial functions and to conserve cash, will enable us to remain resilient during this period,” the company said.