Land-based salmon farmer Atlantic Sapphire saw its share price plunge on Thursday morning following a major fire overnight at its facility in Denmark.

At the time of this writing, the share price had fallen 22 percent since Wednesday's market close, to NOK 36.80 (€3.60/$4.30), knocking almost NOK 1 billion (€98.6 million/$116 million) off its value overnight.

All standing biomass in the Danish facility is expected to be lost. Photo: Atlantic Sapphire

Losing faith

A massive fire broke out at Atlantic Sapphire's Danish facility on Wednesday evening at 8:20, causing "material and substantial" damages to the facility, the company said.

The cause of the fire is currently unknown. All fish biomass in the Danish facility is expected to be lost. Earlier this year, the company estimated its target production rate at the facility was 2,400 metric tons annually.

Carl-Emil Kjolas Johannessen, an analyst at Pareto, told IntraFish that the price drop on the stock exchange on Thursday morning is not surprising.

“It is not surprising considering that there have been several incidents. This causes people to lose faith in the company, and then the share falls,” he said.

Atlantic Sapphire Chief Financing Officer & Managing Director Karl Oystein Oyehaug told IntraFish that as of 12:30 am Thursday morning, the fire was "still ongoing."

Earlier this morning, at 5:41, local police wrote on Twitter that the fire was now under control with the smoke at a minimum. "The extinguishing work is working, but could last all day," it said.

Oyehaug added that the biomass was of "limited financial value," and noted that the largest part of the farm, called "Langsand 2," was empty and "fully insured."

The company said in a stock exchange release it is insured against fire and other incidents for a value of $33 million (€28 million).

“The financial effect of the fire is not necessarily so great, if the company gets paid the insurance,” said Pareto's Johannessen.

He added that Thursday's price fall may be related to the fact that uncertainty has been created about whether similar things can happen at Atlantic Sapphires' facility in Miami as well.

“This shows that there is a generally high risk in land-based farming. This is the third major event for the company, which has fallen 70 percent on the stock exchange during the year,” he said.

In early January the share price was NOK 127.50 (€12.60/$14.80).

IntraFish reported last month that most listed land-based companies, with the exception of Salmon Evolution, have experienced a sharp decline on the stock exchange.

In July a mass mortality event at Atlantic Sapphire's Danish facility resulted in a loss of hundreds of metric tons of fish for the company. The event shaved off millions in value for the company, and was attributed to an issue with one of its saltwater growout systems.

The company's share price has been rocky as it has faced down a string of crises this year.