Clearwater net earnings fell in Q1

Clearwater net earnings fell in Q1

Increased global demand for seafood helped Canadian seafood company Clearwater Seafoods grow its sales and underlying EBITDA in the first quarter of 2017, although it recorded a fall in its net earnings.

Demand for clam, scallop and lobster helped boost overall sales, which rose 10.4% to CAD128.4m (US$93.8m), though Clearwater did note a 25% drop in frozen-at-sea shrimp sales volumes due to difficult harvesting conditions.

Clearwater's adjusted EBITDA increased 4.8% to CAD18.9m, although the strength of the Canadian dollar trimmed CAD4.5m off those earnings.

The company said demand has been driven by a growing worldwide population, consumers' increasing preference for healthier diets and the growing purchasing power of middle-class consumers in emerging economies.

Clearwater's first-quarter results were in line with management's expectations, CEO Ian Smith said. "Strong global market demand and harvesting improvements resulted in higher sales volumes in many of our core species, while margins were pressured by lower sales prices for clams and lower catch rates for FAS shrimp," he confirmed. "For the balance of 2017, we expect clam inventories to continue to decline and margins to improve as we focus on price realisation through the expansion of our markets and channels."

However, the group's earnings attributable to shareholders fell from CAD14.5m in the first quarter of 2016 to CAD2.2m. Clearwater pointed to the weakening of the US dollar against the Canadian dollar, resulting in a reduction of unrealised foreign exchange gains related to debt, working capital and forward contracts.

Adjusted earnings, which excludes items such as restructuring charges, stock-based compensation and costs linked to M&A, stood at CAD2m, down from CAD3.8m a year earlier.