Profits decrease for High Liner Foods in 3Q 2018
By Aquaculture North America Staff
Lunenburg, N.S.-based frozen seafood company High Liner Foods has reported a loss in its third quarter 2018 results and provided details of how the company is advancing five critical initiatives designed to drive cost savings, enhance the efficiency of the business and return the company to profitable organic growth by 2020.
The key financial results indicate sales decreased by $41.5 million to $241.2 million compared to $282.7 million.
"Our disappointing third quarter financial performance reflects challenges in both the external operating environment and our internal operations, and reinforces the need for action to realign the business and drive cost efficiencies," said Rod Hepponstall, president and chief executive officer of High Liner Foods.
Subsequent to the end of the third quarter of 2018, High Liner completed its organizational realignment, resulting in a reduction of 14 per cent of its salaried workforce. The full realignment will generate approximately $7 million in net annualized run rate cost savings, which gives the company full confidence that it will achieve in excess of the previously disclosed $10 million net annualized run rate cost savings that will be generated by executing against its five critical initiatives.
High Liner said it expects the cost savings to be delivered within the next 12 to 15 months. There will be a one-time charge of approximately $4.5 million associated with the latest round of restructuring, $3.3 million of which will be recognized in the fourth quarter of 2018, with the remainder to be recognized in 2019.
"The good news is that demand for seafood continues to be strong and the company is well-positioned to meet this demand because of its established market position, well-known brands and seafood expertise,” Hepponstall added.
“Over the next 12 to 15 months we will focus on five critical initiatives that will ensure we have the most efficient supply chain, a simplified business with lower costs, the right talent in the right roles, a tighter integration with Rubicon, and a stronger strategic marketing platform to grow consumer demand for seafood and our value-added offerings,” he said. “We are focusing all of our attention on ensuring swift and effective execution…to stabilize the business and create optimal conditions for innovation, industry leadership and growth in support of long-term value creation for our stakeholders."