Yes. Welcome everybody. Thank you for joining this analyst call. I will indeed now hand over to Hans who will present to you the business update before. Please remember to mute your line, and there will be a Q&A session at the end, so feel free to of course, raise your hands for if you have a question or put your question in the chat. I'm more than happy to answer your questions. Please go ahead, Hans.
Okay. Thank you very much, Serena, welcome everybody for this update on the fourth quarter results. Especially I'd like to welcome Ohad, who is also in this call, as Outgoing CEO. For me it's the first time that I take this call as Interim CEO and also the last time, because as you have noticed, we already contracted a new CEO, which we expect that will be approved in the next coming up AGM. This update is only on sales and on production. It is not on the financials, because that we will do later in April. The information which we present is not audited yet, so I hope you also understand that.
What we like to do is just to give an update, together with me, Jean-Charles, who is the CFO of Kingfish, and also Kees, who's the technical officer of Kingfish. Jean-Charles will comment more on the production and sales data, and Kees will comment on the progress which we have in Kats at the Phase II development. Maybe we can start with the second slide, Serena. I think overall in 2022, I think we have had a very good year. The sales have grown by 82%. We reached the total sales of almost EUR 19 million, and we sold in total over 1,400 tons.
The sales price we have been able to increase by 14.4% in 2022, which is also a very good achievement. Part of that increase is just price increase and also part because we are selling much larger fish. Our next generation production has much better results. The fish grow faster. They have a better Feed Conversion. As a result of that, we are able to harvest the fish at a larger size, which has also a very positive impact on the sales price. We in 2022 achieved again a record production year. We produced more than 1,500 tons net growth in the full year, which is according to what we have communicated earlier, what is our production capacity.
I think that's really a big compliment to our production people that I think we are one of the few companies, if, and maybe even only one, who is achieving the production capacity to produce the full capacity at, to produce the full volume. Also the expansion. I think somebody is not... Yeah. Was not on mute. Yeah. The expansion for Phase II we have had some delays during 2022 as... Overall we are progressing very well. The commissioning we start in January this month, so 2023. Another big achievement is that for Maine, we secured all the permits. All the state permits, the federal permits, also the local permits.
Besides that, we have shipped already broodstock and fingerlings to a hatchery which we are using at the moment in Maine to start basically with our pilot production over there. The last thing, which I think is also which we have achievement during the last quarter of 2022, was the equity raise of EUR 35 million. Just we completed the subsequent offering this week. We had an equity increase of EUR 35 million. Next one, please, Serena. As you all know, we will have a new CEO coming in. It's Vincent Erenst. He will start the 6th of February. The appointment we expect will be approved by the AGM, which will take place shortly.
Vincent is has a large track record in agriculture industry. He has been working with all kind of different species from sea bass, sea bream, salmon, and so on. He has been both on the production and on the sales side. I think he will be an excellent person to manage the next phase of The Kingfish Company. He has been working international in the Southern Europe and Latin America, in North America and also in Asia. The last jobs were with the Barramundi Group and with Avramar producing sea bass, sea bream. Before that he has been more than 10 years the managing director of Mowi in Canada.
I hand over to Jean-Charles, who will comment on the sales and production updates.
Thank you very much, Hans, and, good afternoon, everyone
Again, we have had a very strong sales in Q4. This is second quarter in a row where our sales exceed EUR 5 million, this is 34% up compared to last year. A very good performance. We are very happy with that. We continue to see very strong demand for kingfish, both in the European market and in the U.S., both in retail and food service. We've increased our price a lot in 2022, a little bit in Q1, then very strongly in Q2. It was from 20% to even 35% for the larger fish and double-digit price increase also in Q2 for the smaller fish.
After this increase, we've not seen any dent in the demand, neither in Q3, neither in Q4. Overall, now we think we have reached very good price level for our fish, so above EUR 18 per kilo for the large fish, EUR 12 per kilo for the small fish, which is a nice place to be. Furthermore, the good sales performance in Q4 has also been driven by the increase of the size of the fish. We've reached 44% of larger fish in Q4 against about 30% in the first 9 months of the year, which is really helping in term of price mix, and eventually in term of profitability.
Overall, on the commercial side, we see a very strong demand for our products. We remain sold out on all sizes. We are starting to work now on the waiting list to serve the customers when the additional volumes will be available from Phase II , and that will be in the last quarter of 2023. On production also, as Hans mentioned, we have had a very good quarter with production keeps surprising us in a good sense. We have had lot of reasons to celebrate in Q4, as we have been beating almost every week some records, either in the hatchery, in production or in processing.
At the beginning of 2022, we introduced the third generation of fingerlings, and we see that now that they are performing really above expectation or, let's say, at the very top range of the expectations. The third generation is growing faster, the average size is larger, and the FCR is improving. If we combine FCR and growth, the improvement in our preliminary analysis is about 25% compared to the second generation, which is really material and encouraging. Productivity has remained very high at industry-leading level, with a net growth of 0.78 kilo per cubic meter per day. Again, a big congratulation to our production team to maintain this very high level of productivity.
We have had no mass mortality event again this quarter and no diseases in the farm. I remind you that we don't use any antibiotics, any vaccine or any other kind of vaccination. Again, showing that the combination of RAS with Kingfish for us is working extremely extremely well. The hatchery also has performed very well in 2022, and particularly in Q4. In 2022, produced more than 2 million of fingerlings and very high quality of fingerlings, which is also very encouraging as we have enough production of fingerlings now to start stocking Phase II when we will be ready to operate it.
Overall, again, a very strong quarter demonstrating that our technology, our know-how, but also the genetics that we have are very strong. Again, that's very encouraging for the future.
Thank you, Jean-Charles. I think now Kees will take over.
Thank you, Hans. On the construction site, we started two years ago almost with the Phase II expansion. That Phase II includes a second hatchery, second pump house, an on-site processing plant, new offices and a wastewater treatment plant. Finally, also the infrastructure, mainly electrical. This all serves Phase I, II, and III, future Phase III. We have reached the final months. Actually, today we have stocked the first eggs in the hatchery, so that milestone has been achieved, and it looks all well and ongoing. We are now mostly in the process of all kind of site acceptance tests for the different installations. The planning is to have week eight, nine, the big system stocked with the first larger fish.
At the same time, Phase I, as you have heard already, has stabilized at the full capacity, run rate. Go to the next slide, please. The biofilters soon have to be started up to be ready for the stocking, of course. About 90% of the installation works have now been finalized, so this also decreases the cost risks. At the moment we are in control, and we have a full view towards reaching EUR 90 million CapEx limitation. Installed capacity will go up from 3,500 to from 1,500 to 3,500 tons with the Phase II in full production. For Phase III, we have submitted our license application.
Thank you.
Thank you, Kees. On Maine, as already mentioned in the beginning, we got all the state, federal, and local permits secured. There is some opposition, as you probably have seen also in IntraFish. We don't expect any problems with those oppositions, but so we are very confident that the permits are fully secured for Kingfish. We have successfully shipped some broodstock to the U.S. and also some fingerlings, the third-generation fingerlings. The fingerlings which have the productivity improvement, as already explained by Jean-Charles earlier. They are in the hatchery which we are using in Maine, and they are performing very well over there. They are growing very fast.
The same kind of performance as we see in our facility in Zeeland. Next one. To summarize basically the results of the last quarter and 2022, we have sector-leading operational track record, our productivity of 0.78 kilos per day is not seen anywhere else? We have robust productivity and we have a robust productivity. The system is stable, and we have a consistent output. We have had no mortality events, except of what is normal in a recirculation system. We see a very healthy demand for our fish. We have increased the sales price a lot, but still we are fully sold out, and basically we lack fish to supply to our clients.
The starting of Phase II is going on, so we are, we started with the hatchery, and in this quarter we also start in the grow-out systems in Holland. We received the final state, local, and federal permits for Maine. We are very pleased that we will have a new CEO effective of February 6th next month. I think these are the main points which I like to share with you, and then we would like now to open up for questions.
Please feel free to raise your hand in the, in the chat if you have a question, or just to put your question in the chat. I think we have a question from Christian Nordby.
Hello, guys. On Phase II, how fast will you try to scale that up to full utilization? Will it be sort of a gradual part, or will you try to do it as quick as possible?
Shall I take that one? We will do that gradually. We will in Q1. In total there are 3 systems for the grow-out. Q1 will be the first one, Q2 will be the second one, and then the final one will be start up in Q3 of this year.
Yeah.
It will be step by step.
Perfect. How do you see unit economics develop as you start to harvest everything all together compared to?
Yeah
... sort of the current levels?
The variable costs, they are decreasing with the, or they are very much influenced by energy and by feed prices, that has been a challenge, as you know. Overall, we would expect that the efficiency of the new system will be better, and overall, the overhead, et cetera, will be divided by a larger volume. Overall, we expect that the cost will be affected positively. Exactly, I think we will come back to that in the next presentation.
Okay.
I see the next question coming from Arjan.
The updates okay.
Yeah. Thanks, Serena. I was wondering, like you already mentioned, that is really positive that, I think, from a long time already, of course, the nameplate capacity of the facility is being reached. I was wondering if you could elaborate a bit more how you think the sort of the third generation of fish now coming in, how that will also impact the ability to increase the biomass in the facility as well.
Is there a further room for that?
This is hard to be precise on that, Arjan. For sure, we see that the feed conversion is coming down now for the 3rd-generation fish, and also the growth rate is up. If we just look at the 3rd generation, I think to reach 2.5 kilos, it takes one month less than compared to the 2nd generation, roughly. And the feed that you have, lower feed conversion, it also means that your filter capacity, that the is, you have more space. Overall, you would expect a positive outcome. It is. You have to look at, so the positive impact on the amount you could produce over there.
On the other side, that will be offset somewhat if you produce larger fish, because larger fish have a somewhat higher feed conversion, which have the contrary effect. Overall, it is clearly a positive impact which we'll have of the third generation fish. For us it is not a surprise that the third generation is performing so much better than the second one, and we expect also continuous improvements for the fourth and fifth generation fish. We are very much upbeat on the next developments.
Thanks.
Are there more questions? This is the only time I'm presenting the results, so I would like to very much have some more questions if possible.
I'm happy to add one more then in that case, Hans. The sales was good to see. I think that in the fourth quarter, again it was of course above the EUR 5 million, but it was the first time also that it was below the previous quarter. Like, is there like a pattern in that? Like, is there a seasonality effect, or could you elaborate a bit more on that, please?
Indeed, there's some seasonality effect, and the impact was more, I would say, from September, October, November. December again it was spiked up a lot, so it is, you have always, we always see in the, in the autumn a little bit of seasonality impact.
Okay, thanks.
Please raise your hand if you has a question, or feel free to add it in the chat. Another question from Christian. Please go ahead.
Yes. What's your latest on the financing for the Maine facility ? Where or how should we think about the timeline for that one?
I think that is too early to comment on it, Christian. I think first we'd like to have finalized Phase II well, and that it is fully commissioned and working. We have now all the permits in place, but I, as I already explained to you, we have still some.
Appeals
... appeals which we have to deal with. Now at the moment we are looking at the financial model et cetera, so we expect in the second half of this year to have more clarity on how we will progress with Maine.
All right. Thank you. Are you also working on any other locations at the moment, like Southern Europe, or is there anything else there to comment on?
I think we have always all kind of interesting alternatives on our plate. To be honest, I think we see the best possibilities in the short term to expand further in Zeeland and to look at the North American market. That does not mean that we exclude other developments. I, and the focus for 2023 is very much finalizing the expansion of Phase II and make sure that everything is working as projected. So far it is. We don't want to rush into a next phase without making sure that we have digested this phase very well.
Perfect. Thank you.
Are there any further questions? If not, we'd like to thank you very much all for your participation.
Maybe I can just say a last word then. Yeah.
Yeah.
First of all, I'd like to thank you all also very much for the presentation. I think it has been, it was a pleasure for me to present it. This is the only time I do it, but I've been now three months with the company in a kind of a operational role, and I have to say I've been in the aquaculture industry around a lot, but I am very impressed by the people we have in Kingfish and how they have been running this company and what kind of improvement has been made over the time and what kind of dedication there is. I'm 100% sure that with the good basis there is, we will have a very bright future ahead of us.
Thank you all for participating this call. Okay, we for sure we will see you somewhere in the future. Thank you.
Thank you. Bye bye.
Thank you.
Thank you.
Cheers.