Shares in seaweed farming outfit Sea Forest Ltd (ASX: SEA) have made a strong debut on the ASX, with the shares charging almost 30% beyond their initial public offer price.
The company raised $20.5 million via the issue of new shares at $2 apiece, with the stock charging to $2.59, up 29.5%, soon after trade on the ASX started on Wednesday morning.
The company is involved in the commercial cultivation of a particular type of seaweed native to Australia, which has benefits as a stock feed additive, in that it leads to the production of less methane when consumed.
Decarbonisation a key focus
Chair John McKillop said in the company's prospectus that Sea Forest was a leader in the field.
Founded in Tasmania in 2018, Sea Forest is one of the first companies to achieve success in the commercial cultivation and application of the native Australian seaweed asparagopsis. Our operations span manufacturing and distribution, with world-class research facilities, land-based cultivation infrastructure in Triabunna and Swansea, and 1800 hectares of marine leases in Tasmania. These have enabled extensive research and development that have led us to where we are today.
The company's flagship product is SeaFeed, which Mr McKillop said was an innovative livestock feed additive that had been scientifically proven to reduce methane emissions from ruminant animals such as cows, "while also delivering measurable productivity gains and sustainability benefits across the livestock sector''.
He went on to say:
The agricultural industry is undergoing transformation, driven by the shift to decarbonise supply chains and meet the growing demand for sustainable food production. Sea Forest's technology addresses these challenges directly, enabling farmers and supply chain partners to reduce scope 3 emissions (being indirect greenhouse gas emissions), access premium markets for low emission products and contribute to global climate goals.
Funds to boost expansion
Mr McKillop said commercialisation of SeaFeed was under way, with the first trial sales in FY24.
The company is now focussed on expanding its production capacity, and is developing new facilities in Queensland, Western Australia, and New South Wales as well as in Europe and South Africa.
The company's financial results, included in its prospectus, showed it increased sales from $313,000 to $451,000 from FY24 to FY25, and made a net loss of $9.1 million in FY25.
New investors in the company were expected to hold 18.3% of the shares on issue following the company's listing on the ASX.
Sea Forest is valued at about $145 million based on the current trading price of $2.59.
