Premium Brands Holdings Corporation hit record revenue and record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in FY2023, while its subsidiary Clearwater Seafoods endured continued struggles and higher losses.
Premium Brands, which owns a bevy of seafood producers, processors, and distributors in the U.S. and Canada, posted revenue of CAD 6.3 billion (USD 4.6 billion, EUR 4.2 million) in FY 2023, an increase of 3.8 percent, or CAD 231.2 million (USD 170.6 million, EUR 156.7 million), compared to FY 2022. Larger revenue contributed to a higher EBITDA of CAD 559 million (USD 412 million, EUR 379 million) for the year, up CAD 54.9 million (USD 40.5 million, EUR 37.2 million) from 2022.
Premium Brands’ Q4 2023 revenue decreased CAD 80.1 million (USD 59.1 million, EUR 54.3 million) to CAD 1.55 billion (USD 1.14 billion, EUR 1.05 billion) – though if that total is normalized for the extra week of sales in Q4 2022, the total shifts to a minor increase in revenue of CAD 1.4 million (USD 1 million, EUR 950,000). Its EBITDA over the period reached CAD 137.2 million (USD 101.2 million, EUR 93 million), a slight CAD 800,000 (USD 590,000, EUR 542,000) increase compared to 2022. If normalized for the extra week in 2022, EBITDA in Q42023 increased by CAD 3.2 million (USD 2.4 million, EUR 2.2 million).
“We made solid progress during the quarter towards achieving several of our core long-term goals and remain on track to meet our 2027 targets of CAD 10 billion [USD 7.3 billion, EUR 6.7 billion] in sales and CAD 1 billion [USD 738 million, EUR 678 million] of EBITDA,” Premium Brands President and CEO George Paleologou said.
Paleologou attributed Premium Brands' progress to its performance in the U.S. market and the “substantial” investments that Premium Brands has made in U.S. companies. However, he said the company's Canadian seafood holdings, including subsidiary Clearwater Seafoods, which Premium Brands purchased in 2020, continued to underperform.
“Our success in the U.S. market was partially offset by several of our Canadian businesses underperforming due to an increasingly challenging consumer environment in Canada,” he said.
Clearwater posted a lower revenue in Q4 2023, bringing in CAD 168 million (USD 124 million EUR 114 million) in revenue compared to CAD 192 million (USD 147 million, EUR 130 million) in Q4 2022. That lower revenue was coupled with higher losses, with the company losing CAD 8.5 million (USD 6.3 million, EUR 537 million) in the quarter, compared to CAD 6.9 million (USD 5.1 million, EUR 4.7 million) in Q4 2022.
For FY 2023, Clearwater posted revenue of CAD 580 million (USD 428 million, EUR 393 million), down from CAD 604 million (USD 445 million, EUR 409 million) in 2022. Net losses for Clearwater increased for the year to CAD 48 million (USD 35 million, EUR 32 million), compared to CAD 37 million (USD 27 million, EUR 25 million) in losses in FY2022.
Premium Brands attributed the decrease in Q4 2023 and FY2023 as a whole to “challenging consumer environments in several markets,” including Europe, delayed delivery of a replacement shrimp and turbot vessel, and the timing of its snow crab sales. Those factors were only partially offset by strong demand for Clearwater’s Canadian sea scallops in the U.S. market, Premium Brands said.
The company did not announce any new acquisitions in Q4 2023, however Paleologou said the company remains committed to its acquisition-heavy strategy. Premium Brands has rapidly rolled up the North American lobster sector, acquiring Starboard Seafood, Maine Coast, Hancock Gourmet Lobster Co., Viandex, and North Delta Seafood in 2019 and 2020 and Ready Seafood in 2018. The company briefly paused its acquisitions during the Covid-19 pandemic, but resumed its acquisition strategy in August 2020. Its most recent seafood acquisition in 2023 was Rivière-au-Renard, Quebec, Canada-based seafood distributor Menu-Mer.
“In terms of potential acquisitions, with the chaos of the last couple of years fading into the background, and valuation expectations moderating, we have several transactions in the pipeline that we hope to complete in the coming quarters,” Paleologou said.
Premium Brands said it is in active negotiations with two seafood companies that combined have more than CAD 367 million (USD 270 million, EUR 248 million) in sales annually, and is in discussions to acquire five other seafood companies with combined sales of CAD 377 million (USD 278 million, EUR 255 million).
