May 21, 2010

Alliance Tuna triples Q1 revenue

Despite a fall in sales volume, Alliance Tuna International Inc (ATII) tripled its Q1 returns with gross margins rising to 14% this year.

The company's income attributable to parent equity holders reached US$676,000 versus US$220,000 on-year.

ATII's major markets experienced an increase in consumer spending and an ease on price pressures on canned tuna. The firm was able to close sales contracts at higher prices.

Alliance Tuna, a canned fish exporter, boosted profitability in place of sales volume as a deliberate strategy and, as such, while profit tripled on lower cost of fish and improved cost control, revenues dropped by 7% to US$12.4 million from a year ago. The amount of containers shipped took a 5% dive.

ATII strongly improved its net profit for the quarter ending March 31 as it benefitted from the positive economic atmosphere in its main export markets, according to compliance officer Rajat Balain.

"Consumer spending in these markets improved markedly from a few months earlier and the firm adapted its marketing strategy to take advantage of this scenario. Pricing pressures on canned tuna eased and the firm was able to close sales contracts at better margins," Balain stated.

In Q1 2010, 77% of canned tuna sales were for institutional buyers and the remainder came from retail customers.

Canned tuna made up 86% of its sales and fishmeal 7%. The balance came from its New Zealand-based salmon subsidiary Prime Foods NZ.

The cost of goods manufactured and sold was US$10.6 million in Q1 2010 versus US$12.5 million in Q1 2009. This caused a gross profit of US$1.7 million in Q1, an increase of 114% compared to US$800,000 in Q1 last year.