Lunenberg, Nova Scotia, Canada-based High Liner Foods posted a strong second quarter, with significant upticks in both sales and gross profit.
The company saw a 33.6 percent, or USD 63.7 million (EUR 61.6 million) increase in its sales for the 13 weeks ending 2 July, 2022, compared to the same period last year. Sales totaled USD 253.5 million (EUR 245.5 million) in Q2 2022 compared to the USD 189.8 million (EUR 183.8 million) in sales Q2 2021.
The higher value coincided with higher volume as well. High Liner sold 58.8 million pounds of product in Q2 2022, an increase of 8.4 million pounds – or 16.7 percent – over the 50.4 million pounds sold in Q2 2021.
High Liner also posted a higher gross profit for the quarter, reaching USD 56.3 million (EUR 54.5 million) in Q2 2022, an increase of USD 11.9 million (EUR 11.5 million), or 26.8 percent, over the USD 44.4 million (EUR 43 million) last year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by an even higher percentage, hitting USD 25.3 million (EUR 24.5 million), a USD 5.7 million (EUR 5.5 million) – or 29.1 percent – increase over the USD 19.6 million (EUR 18.9 million) posted in Q2 2021.
"Q2 2022 was another strong quarter for High Liner Foods. Our products continue to be in high demand, our team is executing well, and the reliability of our diverse global supply chain continues to differentiate us in the market,” High Liner Foods President and CEO Rod Hepponstall said in a release announcing the company’s financial performance. "This solid performance drove year-over-year increases in volume and sales and adjusted EBITDA, putting us on track to deliver another year of adjusted EBITDA growth."
The positive Q2 continues a trend for High Liner, which previously reported a significant uptick in sales in Q1 2022. Overall in H1 2022, the company increased its sales value compared to 2021 by USD 115 million (EUR 111.4 million), or 26.5 percent, to USD 548.2 million (EUR 531.1 million). High Liner's gross profit, as well, was up by USD 16.3 million (EUR 15.7 million) or 16 percent, to USD 118.3 million (EUR 114.6 million).
"Our ability to perform well in a supply constrained inflationary environment underscores the strong underlying fundamentals of our business and potential for further growth as market conditions stabilize,” Hepponstall said. “We remain focused on efficiencies, innovation, and optimization across the portfolio. We are confident that this is the path to continue to drive profitability and advance our leadership position in branded, value-added seafood in North America."
The strong start to 2022 amid inflationary pressure and supply chain complications is a dramatic turnaround for the company, which just a few years ago underwent a “realignment” plan that involved laying off 14 percent of its salaried workforce. That realignment came after the company announced it had “continued challenges” in August 2018, and at the time Hepponstall – who was named the company's president and CEO in April of the same year – said poor financial results were related to “soft sales volume” and raw material costs.
Today, however, the company’s results are positive even amid inflation challenges, Hepponstall said.
"This quarter demonstrated that our longstanding efforts to ensure that we were well-positioned for the full reopening of foodservice are paying off – our customers appreciate the versatility of our offerings, reliability of supply and the value we deliver," Hepponstall said. "We are encouraged that as consumers enjoyed dining on seafood outside of the home, our retail business remained strong and grew sales and volume compared to the same time last year.”
Hepponstall said High Liner “continues to experience shipping delays” and material supply issues – to the tune of an estimated impact to sales volume of 4 million pounds in the quarter. However, the company took steps to mitigate the challenges and the impact on its performance and customers was reduced as a result, he said.
Overall, Hepponstall said he has a positive outlook for the remainder of 2022.
"I am confident that we will continue to grow sales and generate year-over-year adjusted EBITDA growth in fiscal 2022 as we execute on our strategy to be the leader in branded, value-added seafood in North America,” he said.
Photo courtesy of Rod Hepponstall/LinkedIn
