Alliance Select Foods widens loss to $17 M in 2014

Listed seafood producer and exporter Alliance Select Foods International Inc. reported that its net loss widened to $17 million last year from the previous year’s $2.92 million.

In a statement released over the weekend, Alliance Select attributed the loss to the management’s decision to take a “prudent and conservative position toward recognizing major nonrecurring expenses amounting to $19.5 million.”

“These provisions were painful but critically needed. And we determined it is best for the company and its shareholders’ interest that they be addressed immediately rather than allow them to fester and become impediments to our performance goals,” said Raymond See, Alliance Select president.

Among the non-recurring expenses the company reported was a $3.2-million inventory write down in the market value and allowance for inventory obsolescence for both Gensan and Bitung plants.

Provisions were likewise made for impairment of three fishing vessels amounting to $ 7.8 million carried in the parent company’s books.

Revenues of the company also declined by four percent year-on-year to $81.26 million.

Alliance Select said the company’s salmon business grew eight percent to $30 million last year due to increase in sales volume.

On the other hand, revenue from its tuna division fell by nine percent to $52 million largely due to falling prices of raw materials.

“After reaching historical highs in 2013, global tuna prices experienced a free fall in 2014, losing half of its value and settling in at $ 1,150 per metric ton ( from $ 2,390). The drop in raw material prices led to pricing pressures on the sales side which meant the company’s margins were thin at best,” See said.

“The huge drop in raw material prices resulted in the company opting to revalue its finished goods inventory which were produced when raw material prices were high,” he said.

Shipments of canned tuna, meanwhile, increased by 17 percent during the year but net revenue still slipped by five percent due to the effect of the global drop in raw material prices.

“Moving forward, we have started to address all potential impediments to maximizing our true potential as we also expect very positive results from the European Union’s (EU) recently issued General System of Preference Plus which will allow us to export to the 28 member countries of the EU at zero tariff,” See said.