High Liner incurs $1.6 million in COVID-related costs during second quarter

Canadian seafood company High Liner incurred $1.6 million (€1.3 million) in incremental costs associated with the implementation of measures to protect workers from the coronavirus, the company reported Tuesday when it released its second-quarter financial results.

The money was used to, among other things, implement a work-from-home policy for all salaried employees able to perform their duties at home; restrict employee business travel and implement post-travel employee screening; strengthen clean workplace practices, including enhanced frequency of deep cleaning; implement a COVID-19 Task Force comprised of employees and executive leadership; introduce temporary extraordinary recognition pay for all employees working in critical operational roles in production and warehouse facilities; and develop employee screening, hygiene and social distancing practices as recommended by health authorities.

The ongoing pandemic also impacted the company's financial performance during the quarter.

High Liner reported a 4.5 percent drop in second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to $17 million (€14.5 million).

Revenue slipped 26 percent to $165.8 million (€140 million) as sales volumes edged 18 percent.

High Liner said it continued to maximize retail sales during the second quarter with new products and higher margin value-added products, as the foodservice side of its business struggled to recover from the impacts of the virus.

"We are capitalizing on new opportunities to deliver the value-added products that consumers are hungry for, retailers want in stock and foodservice customers need in order to operate efficiently in the new normal," High Liner President and CEO Rod Hepponstall said.

The company expects foodservice sales to recover as more restrictions are lifted and clients re-open for business as usual.

"Our foodservice business is recovering more quickly than anticipated and our supply chain continues to be extremely efficient and reliable providing a competitive advantage and further cementing customer loyalty."

High Liner's three facilities remained operating at planned capacity to meet the increased retail demand with limited issues concerning production, logistics, warehousing and sourcing.

However, similar to other processors in the region, High Liner's costs increased with COVID-19 forcing the company to make use of government support through the Canadian Emergency Wage Subsidy.

The company remains confident it can deliver earnings growth in 2020 and is fully prepared in the case of a second COVID-19 wave in North America, it said.