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Clean Seas Tuna share price dives over breeding problems

Nigel Austin From: AdelaideNow February 26, 2010 5:56PM

THE share price of South Australia's Clean Seas Tuna has plummeted by 58 per cent as investors react to a major setback in its tuna breeding program, heavy losses in its kingfish division and a worse-than-expected half-year result.

Clean Seas reported a $14.16 million net loss for the half-year ended December 31, down 112 per cent on the $6.7 million loss booked in the previous corresponding period.

The result sent its share price down to 9.1c, with 97.8 million shares almost a quarter of those on issue, traded by investors.

The result included a 48 per cent lift in revenue to $19.26 million for the half year, while the net tangible asset backing fell by 24 per cent to 24c a share.

Managing director Clifford Ashby said the half-year loss had arisen largely due to difficulties in its yellowtail kingfish business.

"The company is taking positive steps to scale back those operations to become a profitable and long-term sustainable business," he said.

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A restructure of the kingfish business was pending and the board had made a decision to devote much greater resources to the company's core business, tuna.

Mr Ashby said the 24 per cent cutback in Australia's southern bluefin tuna quota was a timely reminder of the role that Clean Seas would play in helping to protect the natural resource by providing consumers with a sustainable alternative.

Mr Ashby said the tuna breeding program had achieved new breakthroughs including the early start of spawning on January 14 and the successful feeding of live feed to the fingerlings for the first time.

Scientists and vets were continuing investigations into the mortality of fingerlings, which did not survive past 38 days, and they were confident that if the broodstock spawn in March, as they are indicating, the resulting fingerlings will survive.

If they spawn in the first half of March, it would be in time to put fingerlings into the sea before colder weather arrives, but if they spawn in late March or April, the company has the option of putting them into on-land fish tanks at its Arno Bay hatchery before transferring them to the sea next summer.

Clean Seas has also bought 70 tonnes of tuna quota and is growing out the fish in a trial program to test weaning and juvenile pelletised feeds before selling them next year.

"The start of tuna spawning was brought forward by two months which is considered a major advancement by the science community around the world," Mr Ashby said.

"But it was a more intermittent spawning compared to last year and we didn't get the numbers we'd hoped for research and development with the fingerlings surviving for up to 38 days."

Mr Ashby said the kingfish operation suffered a $14.79 million loss in the past six months and the company was looking at every opportunity to reduce costs.

http://www.adelaidenow.com.au/clean-seas-tuna-share-price-dives-over-breeding-problems/story-e6frea6u-1225834899469