ALLIANCE Select Foods International reported a sharp increase in net income during the first quarter of the year due to improved optimization efforts, lower cost of materials, and cost-cutting initiatives.
In a statement, the company said it realized net earnings of $519,000, or 2,771 percent more than the $18,065 posted a year earlier.
The cannery attributed its turnaround to the optimization efforts implemented by the new management, which started last year and included strategies to secure lower cost raw materials, cost-cutting initiatives across all areas of operations, and improvement of customer relationships.
“We are very encouraged by the company’s first quarter performance. The meticulous clean-up and aggressive cost efficiency efforts implemented by new management, beginning 2015, are now steadily bearing fruit, and we believe that these efforts will continue to sustain the company as we contend with the coming challenges of 2016, such as the ill-effects of El Niño and anticipated steep increase of fish cost,” Raymond See, Alliance Select president and chief executive officer said.
Total liabilities shrunk by 9 percent to $27.7 million in the first quarter from $30.4 million as of end-2015, the firm said.
Its first quarter finance costs fell by 46 percent to $242,000 from $450,000.
The decline in total liabilities and finance costs were mainly due to the effective use of proceeds from a successful stock rights offer and internally generated funds.
Liquidity, as measured by current ratio, improved from 1.11 in the fourth quarter of 2015 to 1.16 in the first quarter of 2016.
Solvency, as measured by the debt-to-equity ratio, improved from 0.80 to 0.72 in the same period.
“The cost of goods sold by the company declined by 35 percent on effective fish sourcing efforts as well as aggressive cost management, among others,” the company said.
The cost-cutting initiatives resulted in a 5-percent decline in selling and administrative expenses and a 100 percent drop in other expenses.
Alliance Select posted a net loss of $8 million in 2015, mainly unchanged from 2014, while revenue fell by 32 percent to $68 million from $74.73 million. It cited an unstable operating environment that plagued the fishing industry.