April 28, 2006

Maple Leaf Foods reports drop in first quarter sales

Canada-based Maple Leaf Foods Inc reported sales for the first quarter of 2006 fell five percent to C$1.4 billion (US$1.25 billion) compared with C$1.5 billion  (US$1.33 billion) for the prior year, primarily due to lower commodity prices of export products.

Earnings from operations before restructuring costs fell to C$51.8 million  (US$46.9 million) from C$61.2 million(US$54.5 million) last year.

Sales for the company¡¯s Meat Products Group sales for the first quarter fell 10 percent to C$924 million (US$822.2 million), primarily due to lower commodity pork prices and a decline in pork sales value and volume to Japan.

Sales to the Japanese market was affected by a much weaker yen against the Canadian dollar. The company also faced challenges in raising prices due to the current lull in the meat markets.

Although the company faced mild turbulence in late 2005, it made good progress in earnings recovery during the first quarter of 2006, said Michael McCain, Maple Leaf Foods president and chief executive officer.

However, as expected, the meat markets were weak at the first quarter of the year, he said.

In spite of this, the company was delighted with the performance of their portfolio in the midst of very challenging protein markets around the world, McCain added.