SeaDragon first half loss widens on factory costs, sales soar

Friday 27th November 2015

SeaDragon, the fish oil processor which has attracted health products maker Comvita as a cornerstone shareholder, widened its first-half loss on mounting interest costs associated with the company's newly built Omega-3 factory, which starts operating in coming days.

The Nelson based company reported a net loss of $688,000, or 0.04 cents per share, in the six months ended Sept. 30, from a loss of $574,000, or 0.03 cents, a year earlier, it said in a statement. That included finance expenses of $255,000 in the period compared to $30,000 a year earlier, as the company took on debt to complete the factory, which has been beset by ballooning costs. Still, earnings before interest, tax, depreciation and amortisation improved, narrowing to an ebitda-loss of $147,000 from $320,000 a year earlier, as sales more than doubled to $5.3 million.

"Our Omega-2 fish oil operations have delivered a significantly better half-year result than the prior year, and we are on track to achieve the forecasts we made when we launched our capital raising programme," chairman Colin Groves said. "The commitment our people have shown delivering the new factory, a company defining project, while building momentum in the Omega-2 operations, has been brilliant and it reinforces my confidence in the future of the company."

Groves took over as chairman earlier this year in a boardroom reshuffle and exit of senior management, including chief executive Ross Keeley. Since then, SeaDragon has raised $10 million through a rights issue and bookbuild to give it enough funds to pay for the Omega-3 refinery and upgrade of its existing Omega-2 facility.

SeaDragon affirmed annual guidance for an ebitda-profit of $144,000 on revenue of $10.1 million in the year ending March 31, 2016.

At the Sept. 30 balance date, before the capital raising, SeaDragon had cash and equivalents of $708,000, spending $4 million on buying property, plant and equipment, while drawing down $3.5 million of debt. It generated an operational cash inflow of $758,000 in the half, compared to a $2.1 million outflow a year earlier.

The shares rose 9.1 percent, or 0.1 cents, to 1.2 cents, having slumped 45 percent this year.

BusinessDesk.co.nz

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