Clearwater Seafoods has reported second quarter EBITDA of $7.1 million (€5.5 million) on sales of $65.2 million (€50.6 million), a decrease on comparative figures for the same period of 2009 of $8.5 million (€6.6 million) and $70.2 million (€54.5 million).
During the second quarter of 2010 strong sales volumes, selling prices, lower costs and lower selling, general and administrative expenses offset 83% of the negative impact of a stronger Canadian dollar as compared to 2009, the company said.
For the year-to-date, Clearwater has reported EBITDA of $13.6 million (€10.6 million) on sales of $127.9 million (€99.3 million) versus $17.9 million (€13.9 million) and $141.2 million (€109.6 million) in 2009.
In both the second quarter and first half of 2010 sales volumes have remained healthy with Q2 volumes up 12% from 2009 and year-to-date volumes up 4%.
Strong and accelerating demand for core products has allowed Clearwater’s management to execute planned price increases in the majority of species including scallops, clams and cooked and peeled shrimp and plans are in place to implement further increases in the remainder of the year.
In 2009, the first half EBITDA levels were higher than normal due largely to favourable exchange rates (for example the average exchange rate on the US dollar was 1.196 in the first half of 2009 versus 1.038 in the first half of 2010), the company explained.
In contrast, the second half of 2009 EBITDA levels were lower than seasonal norms due in part to soft market conditions for live lobster, which reduced demand and sales throughout the fourth quarter of 2009.
Looking forward to the balance of 2010, Clearwater believes that 2010 results will reflect a more typical pattern with the second half results showing greater strength than the first half, with improving annual EBITDA performance versus the prior year despite the continued negative impact of foreign exchange.
This is based on expectations for continued strong sales volumes, planned price increases as well as the realisation of additional cost savings and productivity gains in both operations and selling, general and administrative expenses. This expectation for higher second half EBITDA is dependent upon stable economic conditions in Asia, North America and Europe and a measure of stability in exchange rates, it said.
CEO Ian Smith said: "While foreign currency headwinds masked the underlying strength of operations in the first half of 2010 I am encouraged by our continued volume strength in the second quarter and the increasing global consumer and customer demand for our premium, wild, eco-labelled seafood.
“Taken in combination with our recent pricing, cost savings and other productivity initiatives, I believe Clearwater is poised to deliver markedly improved operating margins and earnings performance through the balance of 2010.
“Furthermore, I believe that our strategies of: Expanding access to and supply of core species; Targeting profitable and growing markets; Positioning our products as high quality, premium offerings; Capitalising on our investments in innovation; Preserving the long-term sustainability of our resources; and Improving the organisational capacity, talent, diversity and engagement will result in improved results in the near-term and provide us with sustainable competitive advantage in the mid to longer term.”
