Premium Brands posts record revenue, says more acquisitions in the works

Published on
March 20, 2023
A box of live lobster from Clearwater Seafoods.

Premium Brands Holdings Corporation, a Canadian food manufacturing and distribution company with a growing seafood portfolio, reported record revenue in Q4 2022, capping off a record-breaking year for the company. 

Premium Brands reported Q4 2022 revenue of CAD 1.63 billion (USD 1.19 billion, EUR 1.11 billion), an increase of 21.5 percent, or CAD 289.4 million (USD 211.8 million, EUR 197.5 million), compared to the same period in 2021. The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 20.3 percent, or CAD 23 million (USD 16.8 million, EUR 15.7 million), to CAD 136.4 million (USD 99.8 million, EUR 93.1 million), in 2022.

“Our record results for the fourth quarter, which is a seasonally slower quarter, once again demonstrates the strength and resiliency of our business model as we were able to achieve these during a period of unprecedented volatility,” Premium Brands President and CEO George Paleologou said in a release. “Our performance is the direct result of our decentralized management structure and strong entrepreneurial focused culture, which on a combined basis, empower our talented management teams to act decisively and effectively in dealing with challenges and capitalizing on opportunities.”

For the full year, the company reached CAD 6 billion (USD 4.3 billion, EUR 4.09 billion) in revenue, a 22.3 percent, or CAD 1.1 billion (USD 804 million, EUR 751 million) increase over 2021. Its full-year adjusted EBITDA reached CAD 504.2 million (USD 368.9 million, EUR 344.2 million), a 17.1 percent, or CAD 73.5 million (USD 53.7 million, EUR 50.1 million), increase over 2021. In 2022, the company posted an adjusted earnings-per-share of CAD 4.82 (USD 3.53, EUR 3.29), a 7.6 percent increase over 2021. 

Premium Brands’ subsidiary Clearwater Seafoods – which the company purchased jointly with a coalition of Mi’kmaq First Nations in 2020 – posted increased revenue for 2022, but the company’s net losses also increased.

Clearwater’s revenue for the 14 weeks ending 31 December, 2022, reached CAD 192.5 million (USD 140.8 million, EUR 131.4 million), up from the CAD 141.7 million (USD 103.6 million, EUR 96.7 million) it posted in 2021. For the full year, the company saw CAD 604.5 million (USD 442.4 million, EUR 412.7 million) in revenue, up from CAD 532.9 million (USD 390 million, EUR 363.8 million).

Despite the increased revenue cost inflation and higher fleet fuel costs and wages drove down the subsidiary’s earnings – though losses decreased in Q4. The company posted a net loss of CAD 6.9 million (USD 5 million, EUR 4.7 million) in Q4 2022, an improvement compared to the CAD 15 million (USD 10.9 million, EUR 10.2 million) loss it posted in 2021. For the full year, however, losses increased – Clearwater posted a net loss of CAD 37.5 million (USD 27.4 million, EUR 25.6 million) for FY 2022, compared to a loss of CAD 33.1 million (USD 24.2 million, EUR 22.5 million) in 2021.  

The company announced plant start-up and restructuring costs reached CAD 27.2 million (USD 19.9 million, EUR 18.5 million) in 2022 – mainly for plant expansions for products outside of the seafood industry such as sandwich production and artisan bakeries. One cost related to seafood, however, was the installation of new freezing technology at a lobster-processing facility in the U.S. state of Maine. Premium Brands owns multiple lobster companies in Maine, including Portland, Maine-based Ready Seafoods; York, Maine-based Maine Coast Shellfish; and Topsham, Maine-based Hancock Gourmet Lobster Company, which was acquired by Ready Seafood in 2019.

Paleologou said the company has a “full pipeline of opportunities” in 2023, and he announced a new five-year plan calling for CAD 10 billion (USD 7.3 billion, EUR 6.8 billion) in sales and CAD 1 billion (USD 731 million, EUR 682 million) in adjusted EBITDA by 2027.

In its Q4 presentation, the Premium Brands said it would soon announce the acquisition of a seafood company with CAD 40 million (USD 29.2 million, EUR 27.3 million). It is in active negotiations on acquisitions of four additional seafood companies with combined total sales of CAD 552 million (USD 404 million, EUR 376 million), and nine more seafood companies with CAD 489 (USD 357 million, EUR 333 million) in combined sales are in the “early stage” of discussions. 

“We expect acquisitions to continue to be a key growth driver for our business,” Paleologou said. “However, these new targets are conservatively based primarily on organic initiatives given the significant opportunities our businesses are pursuing through product innovation, automation, and capacity expansion.”  

Photo courtesy of Premium Brands/Clearwater Seafoods

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