Rubicon acquisition carries High Liner Foods to higher sales totals
High Liner Foods registered higher sales in its first-quarter financial report, mainly on the back of its recent acquisition, Rubicon Resources.
The value-added frozen seafood company, based in Lunenburg, Nova Scotia, Canada, reported first-quarter sales of USD 319.2 million (EUR 267.6 million), up USD 43.5 million (EUR 36.5 million) compared to the company’s USD 275.7 million (EUR 231.1 million) worth of sales in the same period in 2017. However, excluding Rubicon’s sales, at USD 42.1 million (EUR 35.3 million), and the impact of currency conversion, High Liner’s sales decreased by USD 1.5 million (EUR 1.3 million).
The acquisition of Rubicon on 30 May 30, 2017, had the impact of increasing sales volume by 7.9 million pounds, gross profit by USD 5 million (EUR 4.2 million) and adjusted EBITDA by USD 1.1 million (EUR 922,000) in the first quarter of 2018 compared to the first quarter of 2017, according to High Liner.
Excluding the impact of the Rubicon, High Liner’s sales volume for the first quarter of 2018 decreased by three million pounds to 88.1 million pounds, reflecting lower sales volume in the U.S. retail and foodservice businesses, the company said.
Not including Rubicon’s contributions, High Liner’s gross profit reached USD 55.6 million (EUR 46.6 million), up by USD 100,000 (EUR 83,800) over the same period of 2017. The flat profits reflect “price increases, partially offset by lower sales volume and plant inefficiencies in our U.S. business,” according to the company.
High Liner’s first-quarter Adjusted EBITDA increased by USD 1.9 million (EUR 1.6 million) to USD 24.2 million (EUR 20.3 million), of which Rubicon contributed USD 1.1 million (EUR 921,000) in the first quarter of 2018. Reported net income in the first quarter of 2018 decreased by USD 400,000 (EUR 335,000) to USD 10.3 million (EUR 8.6 million).
High Liner Foods' common shares trade on the Toronto Stock Exchange under the symbol HLF. The company’s shares were trading at CAD 11.39 (USD 8.92, EUR 7.48) at market close on Tuesday, 8 May.
High Liner Chairman Henry Demone said the company would seek to improve its performance in the remainder of 2018.
"Areas of increased focus in 2018 to improve financial performance continue to include improving pricing methodologies, lowering fixed costs, further increasing the effectiveness of our supply chain and product innovation, and simplifying our business,” Demone said. “We will work to mitigate the impact of higher raw material costs on certain key species and higher supply chain expenses through these initiatives.”
The hiring of Rod Hepponstall as CEO, effective 1 May, 2018, would aid in that process, Demone said.
"I am confident that with Rod's proven leadership capabilities and extensive experience with the food industry in North America, he will successfully lead High Liner Foods," said Henry Demone, Chairman of the Company's Board of Directors. "Excluding Rubicon, adjusted EBITDA for the first quarter of 2018 was in line with the first quarter of 2017 and improving the efficiency of our manufacturing facilities remains a key focus in 2018 to deliver improved performance."