Key points
- Decline in international seafood market conditions affecting sales demand
- Immediate pause on deployment of juvenile abalone to the ranch
- Board and Management exploring strategies to further reduce operational expenses
Full summary
Rare Foods Australia Ltd (ASX: RFA) has provided an operational update in response to challenging international market conditions for seafood sales and demand. The company advises that following extensive negotiations, a sustainably affordable supply arrangement for juvenile abalone could not be reached. As a result, the Board has resolved to pause the deployment of any new juvenile abalone on the Flinders Bay reef, representing a significant cost saving to the business. Further operational changes within the business will be implemented over the coming weeks associated with this temporary shift in strategy, aimed at further reducing the operating cost base of the business. The company remains focused on diversifying abalone sales opportunities, continuing to harvest the existing biomass, and attaining the highest possible sales prices to generate positive cashflows. The Board and Management will continue to actively monitor the operations of the company and will keep the market informed of any material developments.