May 5, 2009

Canadian Maple Leaf Foods has reported an increase in sales for the first quarter of 6.3 percent to CA$1.3 billion (US$1.1 billion) compared to CA$1.2 billion (US$1.02 billion) last year, reflecting price increases and the benefit of favourable foreign currency changes on fresh meat sales.

Maple Leaf president and chief executive officer Michael H. McCain said results in the first quarter were overshadowed by depressed margins in packaged meat operations, as the company continue to recover from the major product recall last year.

Adjusted operating earnings for Maple Leaf's Agribusiness Group which includes hog production and animal by-products recycling in the first quarter of 2009 increased to CA$2.1 million from a loss of CA$2.8 million last year, and results for the first quarter last year included CA$8.4 million in government support.

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.

Adjusted operating earnings in the company's Meat Products Group, which includes pork, poultry and turkey products, declined to CA$11.4 million in the first quarter of 2009 compared to CA$25 million last year.

Margins in packaged meat products were significantly lower than last year due to the impact of volume recovery efforts following last year's product recall.

US$1 = CA$1.173 (May 5)