Canadian food producer Maple Leaf Foods has reported its first quarter results as business stabilise and the company focuses on margin and sales growth. 

 

Results in the first quarter were overshadowed by depressed margins in Maple Leaf's packaged meat operations, as the company continues to recover from the major product recall last year resulting from listeria contamination, according to President and CEO Michael McCain.

 

While volumes improved, margins will take longer to restore, but the company will focus on sustaining volume recovery, improving margins and achieving higher growth rates in core categories, McCain said.

 

Sales for the first quarter increased 6.3 percent to C$1.3 billion compared to C$1.2 billion last year, reflecting price increases and the benefit of favourable foreign currency changes on fresh meat sales.

 

Earnings from operations before restructuring and other related costs and other income decreased 4.5 percent to C$31.6 million compared to C$33.1 million last year, as significant declines in packaged meat earnings were mitigated by benefits from the restructuring of pork processing and hog production operations and price increases across the bakery business.

 

Earnings from the Meat Products Group declined to C$11.4 million in the first quarter of 2009 compared to C$25 million last year.

 

Earnings from fresh pork operations improved significantly in the first quarter, as the benefits from double shifting the pork processing plant in Brandon, Manitoba, the consolidation of ham boning operations and the closure of less efficient plants were realised.

 

A weaker Canadian dollar resulted in higher sales prices for fresh pork and increased earnings from international sales. In the first quarter, Maple Leaf suspended actively marketing its pork processing business in Burlington, Ontario. The sale process for this business is expected to resume when credit markets stabilise and an appropriate sale value can be realised. Earnings from the Company's poultry operations were consistent with last year.

 

Earnings for the Agribusiness Group in the first quarter of 2009 increased to C$2.1 million from a loss of C$2.8 million last year. While earnings from by-products recycling operations were consistent with last year, results in hog production improved significantly due to lower production following the sale or exit of non-core operations in Ontario and Alberta. Restructuring and simplification of the core operations in Manitoba resulted in operational improvements such as lower cycle times and improved feed efficiency and hog quality.

 

Maple Leaf Foods Inc. is a leading food processing company, headquartered in Toronto, Canada. The company employs approximately 24,000 people at its operations across Canada and in the US, the UK, and Asia.

 

US$1 = C$1.19871 (Apr 30)