February 28, 2008
Maple Leaf to increase restructuring costs by US$112 million
Maple Leaf Foods Inc. will witness a rise in restructuring costs mainly due to declining hog prices, according to Robert Gibson, an analyst from Octagon Capital.
The current market condition for hog farmers is so bad that market value for hog assets have dipped, according to Gibson.
Because of that reason, the company is increasing its restructuring costs estimation by CA$110 million (US$112 million) to between CA$275 million and CA$325 million.
The company's total cash restructuring could reach CA$90-110 million, said Gibson.
Maple Leaf used about CA$71.9 million for restructuring in the fourth quarter of 2007.
The company's sow ownership and hog production will reach its target at the end of this year's first quarter, said Gibson.
CA$1 = US$1.019 (February 28, 2008)