Omega-3 outfit SeaDragon posts substantial loss, but insists sales outlook is strong

By Gary Scattergood

- Last updated on GMT

SeaDragon is completing its transition from an omega-2 to an omega-3 supplier.
SeaDragon is completing its transition from an omega-2 to an omega-3 supplier.

Related tags Fish oil Omega-3 fatty acid

New Zealand fish oil firm SeaDragon has posted a net loss after tax of NZ$6,659,000 for the year to 31 March, its preliminary financial results reveal.

The company, which operates an $11m state-of-the-art refinery in Nelson, said the past 12 months had seen it transition from its legacy omega-2 business to one that is "ready to capitalise on the strong demand it sees for omega-3 fish oils"​.

It says the net loss after tax of $6,659,000 and a normalised EBITDA loss of $4,399,000 are within the range of recent market guidance.

"We will release our detailed audited results on or before 30 June 2017. The audit is progressing smoothly and we are not expecting any major changes,"​ said the company.

"This result is a reflection of the time it has taken to transition the business from its legacy omega-2 business to omega-3 fish oils refined in the new refinery. The transition of the business is now substantially complete."

SeaDragon says negotiations with several major international Omega-3 customers are advancing well, and it expects to receive orders once its quality assessments and product testing have been completed.

"We have secured a supply of raw materials from new sources, and now have availability of raw material supply from the Indian Ocean and two South Pacific sources. We are well advanced towards securing additional volumes of unrefined tuna oil from a third South Pacific source,"​ said the firm.

Hoki livers

"We believe this will help us to mitigate the risk of supply constraints in the future. We have had some encouraging engagement with potential NZ-based suppliers of unrefined Hoki oil and Hoki livers in a form that we can refine (i.e., raw material that meets regulatory ‘traceability’ requirements for the sale of refined products for human consumption). We anticipate processing initial volumes of NZ-sourced Hoki oil and livers during this financial year."

The Nelson refinery can run for 24 hours a day, with many of the processes fully automated. The company believes it has the potential to generate NZ$50m annual sales and the capacity to refine up to 5,000 tonnes of oil each year.

We visited the site earlier this year to discuss the challenges of opening the world's newest omega-3 refinery. Watch the video here.

Related topics Suppliers Supplements Oceania Omega-3

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