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Seadragon first-half loss widens to $3.4m

NZ Newswire logoNZ Newswire 17/11/2016 Sophie Boot

Seadragon, the fish oil refiner, more than quadrupled its first-half loss with revenue falling as the company continued its transition to higher value Omega-3 fish oil products from Omega-2.

The company posted a loss of $3.4 million in the six months ended Sept. 30, from $688,000 in the same period a year earlier. Revenue dropped 34.6 per cent to $3.1m, with negative normalised earnings before interest, tax, depreciation and amortisation of $2m, from negative ebitda of $146,000 in 2015's first half.

"The negative normalised ebitda reflects the ongoing impact of exiting Omega-2, including sales of Omega-2 inventories previously impaired, and the transition and start-up nature of the Omega-3 business," the Nelson-based company said in a statement.

The company has been processing smaller quantities of oil through its new Omega-3 refinery to produce samples for prospective customers, meaning the fixed refinery costs have been spread over smaller quantities of oil, which is reflected in the first-half results, it said.

Seadragon said it is capable of processing Omega-3 oil to supply to Europe, the US, China, Japan and Australia and is in discussion with multinational "key potential customers" but there's no guarantee of a contract at this stage.

The company didn't give full year guidance due to uncertainty about its sales in the second half, but expects a negative ebitda result in 2017 "with a view to working towards positive ebitda in FY18."

The shares last traded at 0.9 cents, and have declined 28 per cent this year.

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