LUNENBURG, N.S. – High Liner Foods Inc. shares dropped by as much as 13.4% Wednesday after the frozen seafood company said its net earnings plunged in the second quarter as it absorbed costs associated with a 14% cut of its salaried workforce.
The Nova Scotia-based company’s shares fell to $8.97 in early trading on the Toronto Stock Exchange and closed down $1.17 or 11.5% to $9.
High Liner, which reports in U.S. dollars, says it earned $946,000 or three cents per diluted share for the three months ended June 29, compared with $2.8 million or eight cents per share in the prior year.
It attributed the decrease to higher income taxes, termination benefits associated with an organizational realignment announced in November and consulting fees.
Adjusted net earnings increased 24% to $4.7 million or 13 cents per share, from $3.8 million or two cents per share in the second quarter of 2018.
Revenues decreased 9% year over year to $223 million from $245.3 million on lower sales volumes in retail and food service, the loss of a significant customer and the exit of low-margin business. That was partially offset by a later Easter that shifted volumes to the second quarter.
High Liner was expected to earn seven cents per share in adjusted profits on $245.5 million of revenues, according to financial markets data firm Refinitiv.
“Our results this quarter reflect the steps we have taken to reposition our portfolio to higher margin products and our ongoing transformation to a leaner, more efficient and integrated High Liner Foods,” stated CEO Rod Hepponstall.
“As a result of our considerable progress to date on our critical initiative plan, I am confident that we will deliver adjusted EBITDA (earnings before interest, taxes and other items) improvement in 2019 and 2020.”
News from © Canadian Press Enterprises Inc. 2019