Land-based salmon farmer Atlantic Sapphire said Monday it is working to overcome an elevated degree of maturation in its early batches of fish, an issue that will lead to a higher number of downgraded fish through the first quarter of 2022.

Atlantic Sapphire CEO Johan Andreassen told analysts on a monthly update call the problem of sexual maturation is temporary, linking the issue mainly to faults with the cooling system at the company's facility in Homestead, Florida.

"We know exactly how to avoid it, but previously we did not have the right tools," Andreassen said of the cooling issue.

Early sexual maturation in farmed salmon has a number of negative consequences, including slower growth, lower feed conversion and poor quality.

It is just the latest issue to hit the the company which has been dogged by technical problems, teething troubles and downright bad luck over the past couple of years.

"Overall, the growth in the biomass has been negatively affected by the performance of previous batches, while new batches continue to perform excellently."

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String of setbacks continue

In September, the company's Danish land-based salmon plant burned down, a major blow to the company and its share price. Though the plant was relatively small, it served as an important commercial pilot plant for the group.

There was speculation the plant would not be rebuilt, and that the settlement from the insurance would instead be used for the ongoing construction of phase two of the company's plant in Florida.

The company has not said with finality if the Danish facility will be rebuilt. It expects investigations into the cause of the fire to be completed by January.

The company faced a string of other operational challenges in 2021.

In July 2020, the company was forced to harvest close to 200,000 fish. Of this, around 150 metric tons were sent for processing and sale.

Atlantic Sapphire was compelled to reassure investors that operations at its Miami facility were back to normal after an oxygen shortage threatened production and sent its share price reeling.

In March, Atlantic Sapphire suffered the loss of 500 metric tons of biomass at its Miami facility. It blamed the loss on a "weakness" in its recirculating aquaculture system (RAS).

Market headwinds

The company also struggled on the commercial side.

The company's fish were dropped by retailer Giant Eagle, which cited product quality as a reason for poor sales. In October, a major campaign by Florida retailer Publix, the largest ever for a land-based salmon supplier, fell short of expectations.

Despite these setbacks, Atlantic Sapphire products are on sale in around 2,000 stores, mainly in the southeastern United States.

Under Phase 2 expansion plans, the new tanks should be ready for fish by the end of 2022, and the company is targeting 25,000 metric tons of production.

Atlantic Sapphire has set a long-term target to expand annual production at the Miami "Bluehouse" to 220,000 metric tons by 2031.