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High Liner execs say 'current headwinds will persist into 2019'

Company trying to dig itself out of a hole resulting from falling sales of Rubicon subsidiary.

Canada's High Liner Foods said it is plans to eliminate non-essential products as it faces financial "headwinds" heading into 2019 that include tariff increases resulting from a trade war between the United States and China and rising raw material costs.

Company profile: High Liner Foods

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US import tariffs and the loss of major customer will have a significant impact on High Liner's bottom line next year, the company told analysts during a conference call on Thursday following the release of its disappointing third-quarter results.

High Liner estimates US import tariffs imposed on China could add $10 million (€8.8 million) to its costs, and told analysts it plans to recoup those costs through price increases.

The company did not disclose details on those price increases but said they have been equal to the tariff import increase of 10 percent on products imported from China, such as haddock, tilapia, sole and flounder. It said price increases for other products have been comparatively small and increased to match market conditions.

High Liner did not disclose details on which products it would eliminate but said it would focus instead through 2019 on increasing demand for its most profitable products. The company aims to grow its seafood business in North America by introducing products that have been successful in Canada, it said.

High Liner takes a hit with Rubicon

While High Liner executives said they could not tie the decline in US sales through the third quarter to any specific company, they did acknowledged the company felt the full impact this quarter from Rubicon's loss of a major big-box customer in 2017.

Sales volume for the third quarter of 2018 decreased by 9.4 million pounds ($12.3 million) to 64.2 million pounds ($83.8 million) compared to 73.6 million pounds ($96.1 million) in the same period in 2017.

High Liner still plans to "capitalize on opportunities for growth in shrimp," the company said.

High Liner executives told analysts the company plans to enhance its shrimp business and has even placed a senior High Liner foodservice sales executive at Rubicon to align and grow the brand.

Growing Rubicon is one of five critical initiatives the company plans to complete in the next 12 to 15 months.

The company said it plans to return to "profitable, organic growth" by 2020 under its realignment strategy.

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