Pasig—(PHStocks)—For the first half of CY 2016, Alliance Select Foods International Inc. (PSE: FOOD) improved its financial performance and operations, trimming down losses by $905,000 from $2.2 million to $1.3 million year-on-year. Meanwhile, the Group continues to benefit from its cost efficiency initiatives and innovative raw material sourcing, as operating expenses (OPEX) made a significant drop.
“Over the past couple of years, we have successfully implemented measures to reduce operating expenses and we have consistently managed our costs. I am very pleased to see that our hard work has now brought an increased efficiency across the organization. Our streamlined operations have sharpened our focus on work that directly supports our business priorities, while eliminating low-value activities that impacted company cost,” said Raymond See, Alliance Select president and CEO .
Alliance Select likewise continues to profit from prudent working capital management, leading to lower interest costs; interest expenses declined by 43 percent from $893,000 in 2015 to $509,000 in 2016.
On the other hand, the company met challenges due to the volatility in the fishing industry in early 2016 that slowed down mid-year revenues. The fluctuation in fish prices negatively affected the Company, and its tuna business continues to weather the uncertain and restrictive regulatory environment in Indonesia. Meanwhile, the group’s salmon division faces a salmon shortage from Chile due to labor strikes and widespread algae bloom currently afflicting the region.
While responding to the dynamic business environment faced by the company, management maintains its focus and confidence in the business: “While commodity prices have again fallen from last year, we believe long-term market fundamentals remain attractive, and our business strategies remain intact. This is why management is pursuing further efficiencies to sustain its competitive advantage in the future,” See said.
On this note, the company’s investment priorities this year are on target: execution of major capital projects and sustainable sourcing of fish. Alliance Select has recently invested $2.3 million to install state of the art equipment in its factory.
“As we continue implementing our strategic initiatives across the board, we are now poised to bring our tuna and salmon products to a bigger market across the globe,” See confirms. “While we maintain our core customer base, we continue to gain market share in the US, Japan and Middle East markets. Locally, the demand for salmon continues to grow, and we intend to fully capitalize on our salmon processing facility in General Santos, together with our subsidiaries Akaroa Salmon NZ Ltd. in New Zealand and Spence & Co. in the US. Our expanded sales and marketing force this year is set to target key accounts and relationships that have a good strategic fit, where all stakeholders, our customers in particular, can obtain our fully certified and award-winning products at great value.”