Seafood producer turns around and reports profit

MANILA, Philippines—Seafood producer Alliance Select Foods International Inc. swung back to profitability in the second quarter as the company grew its volume on the back of favorable fish supply and global pricing.

Alliance reported to the Philippine Stock Exchange on Tuesday that it had chalked up a net profit attributable to equity holders of parent of $984,025 in the second quarter, a turnaround from the loss of $450,938 in the same period last year. This shored up the company’s attributable six-month bottomline to $420,991 compared to a net loss of $515,998 a year ago.

Revenues in the second quarter rose by 29 percent to $25.2 million which the company attributed to an across-the-board increase in contribution from all of its local and foreign subsidiaries.

Sales for the first six months of the year also grew by about 27 percent, reaching $44.9 million from a year ago as its canned tuna division benefited from improved fish prices and deliveries.

With ongoing investments in backward integration into fishing, the company said it was on track in sourcing part of its own fish supply, ensuring supply and price stability.

The second quarter is usually a weak season for smoked salmon but Alliance said it had bucked this worldwide industry phenomenon, noting that all of its salmon subsidiaries were able to boost their revenues over the same period last year.

“With peak sales and profit season expected in the latter part of the year, we project the division to continue contributing a robust share to the company’s sales and profit growth. Better procurement policies and marketing strategies meant that gross profit margin increased at rates higher than growth in sales,” the company reported.

Gross profit for the second quarter stood at $2.4 million, which was 39 percent better than the comparable quarter last year. The gross profit margin of 9.5 percent was better than 8.8 percent in the second quarter in 2012. Similarly, gross profit increased by 24 percent in the first six months compared to last year.

Other cost control measures helped the company keep its selling and administrative expenses at 6.3 percent of sales in the quarter versus 7.1 percent in the corresponding quarter in 2012. These expenses as a percentage of sales were likewise lower in the first half to 7.1 percent from 7.6 percent year-on-year. “As a result of these measures, the company was able to wipe off the losses incurred in the first quarter of this year,” the company said.