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Barb Dean-Simmons
SaltWire
@BarbDeanSimmons
COVID-19 reduced sales of Clearwater Seafoods for the first part of 2020, but the Nova Scotia-based seafood giant stayed away.
The company reported a profit of $206.3 million on Tuesday during the first six months of 2020. That’s nearly $70 million less than the $274 million of the same time in 2019.
The seafood collector, processor and exporter earned $18.9 million in the quarter. EBITDA $32 million for the first part of the year, compared to $50.3 million compared to the same time last year.
Minimizing demand for clams and lobster and rising operating prices as a result of the pandemic were partially offset by less expensive fuel, cost-cutting efforts, and government assistance.
Despite having an effect on revenue, Clearwater said it continued to target long-term plans and capital investments in infrastructure.
You can see it on the water’s edge at Grand Bank, Newfoundland and Labrador, where a crane is in paints at the Clearwater Seafoods plant, installing new wood for the pier.
This is one of the many capital projects that Clearwater will complete its operations this year.
The company had planned to spend between $35 million and $40 million on infrastructure this year, but COVID forced some changes to the plan cited in its 2019 year-end report.
In a media call after the release of its quarterly effects Tuesday, Clearwater’s media relations chief Christine Penney said capital spending would be lower than expected.
“With the advent of COVID, we’ve reduced our capital expenditures by about $5 million,” he said.
“We are pursuing the maximum of our capital projects this year to keep our amenities in order, and we still have strategic projects.
She was unable to give the main points of the projects that will take up position in 2020.
“It’s not something we’re going to supply the main points on. Our general capital expenditures would be the ongoing overhaul systems with our vessels, which have normal schedules to keep them in order of intelligent operation.
The company also demonstrated that it continues to identify a joint venture with Quin-Sea to operate the St. Anthony Seafoods plant on the Great Northern Peninsula of Newfoundland and Labrador.
This plant, which is inactive this season, is owned by St. Anthony Seafoods Ltd. and Clearwater.
St. Anthony Seafoods will sell its stake to Royal Greenland, a Norwegian company that already has processing plants in Newfoundland and Labrador.
However, the transfer of ownership must be approved through the provincial government, after being reviewed by the Provincial Fish Processing Licensing Commission.
A hearing to evaluate the application for replacement of postponed property due to the pandemic, leaving the plant inactive by 2020.
Now, it seems, the hearings will take place by the end of this summer.
Theresa Fortney, leading monetary director, said he expects the hearing to take a stand in September. “We are confident that an operator replacement will be approved to allow this joint venture to continue.”
Reg Anstey, chairman of the Fish Processing Licensing Commission, showed Tuesday that hearings are scheduled for August or early September.
Meanwhile, a sale of Clearwater Seafoods, in components or in its entirety, is still on the table.
In March, Clearwater said it had “launched a formal strategic procedure to identify, review and compare a wide range of forward-looking strategic opportunities at its disposal in order to continue to bring value to shareholders.”
At the time, he said it could come with “the prospective sale of all or a significant portion of the company’s assets.”
Ian Smith, Clearwater’s chief executive, didn’t have much to go up tuesday.
“The strategic review procedure is moving seriously (but) has been affected by a timetable through COVID restrictions. Where there is something to reveal, we will reveal it.”
Meanwhile, Smith China’s seafood markets continued to improve, after a decline in the first months of 2020 when COVID arrived in Asia.
“Sales in the Chinese market declined earlier this year, but they recovered mainly from April, May and June, mainly in China,” he said.
He said sales continued in mid-June and July and August.
“We are cautiously positive that this trend will continue.”
In North America, there have been some improvements, he said.
“During the last quarter of the year, in some species, we saw retail sales increase by 30 to 40 percent,” Smith said.
He specified which species.
Sales in the food places sector are also reopening places to eat.
“We hope it continues.”
Prior to COVID, sales to the place of dining (places to eat and cruises) accounted for about 55% of Clearwater’s revenue, he said.
Clearwater said he had done the task of preventing the spread of the virus on its premises.
The company stated that it had one or two instances of COVID among its workers at the beginning of the epidemic, and that lately there were no instances of COVID in its global operations.
Clearwater continues with the fitness assessment protocols and other measures followed at the start of the pandemic, adding non-public protective devices for workers and social distance on its premises.
In the coming weeks, the company will take action.
“We have purchased and are about to launch the Health Canada-approved verification apparatus so that we can physically verify COVID workers in a matter of minutes,” Ian Smith said.
If a worker tests positive for COVID, he or she will refer it to the regional physical fitness government for further testing.
He said the procedure is expected to be operational at the company’s facilities in Canada and Scotland in early September.