CANADA: Canada Bread bakes lower H1 earnings
By just-food.com | 24 July 2008
Canada Bread, the Canadian bakery group controlled by Maple Leaf Foods, today (24 July) posted a 49.2% slump in half-year earnings as wheat and fuel costs hit the business.
The company, which has operations in the UK as well as in Canada, booked net earnings before restructuring costs of C$20.7m (US$20.5m) for the first half of 2008 - against C$40.6m a year earlier.
President and CEO Richard Lan said higher commodity costs had had a "significant impact" on the business but said the company believes the effects will be short term.
"We believe these effects, while material, are short-term with improvements to come in the second half of the year as markets stabilise and we continue to pass on costs by way of price increases to offset the effects of commodity inflation," Lan said.
Revenue rose 11% to C$820.3m as Canada Bread's fresh bakery business benefited from higher prices and the impact of recent acquisitions.
Underlying earnings from the fresh bakery unit tumbled 47%, however, thanks to higher wheat costs.
Earnings from Canada Bread's frozen bakery business more than halved, reaching C$6.8m, compared to C$16.2m a year earlier. Costs again were crucial, as well as Canada Bread's decision to up marketing expenditure by more than a third.
Canada Bread's performance helped push down profits at Maple Leaf, which saw its half-year earnings almost halve due to soaring grain and fuel costs.
Maple Leaf owns over 89% of Canada Bread.
Companies: Maple Leaf Foods
View next/previous articles
24 Jul 2008 -
Currently reading -
CANADA: Canada Bread bakes lower H1 earnings
24 Jul 2008 -
Related articles
Read more on this hot issue
In the Spotlight - Maple Leaf Foods
When Michael McCain stepped into the Maple Leaf boardroom in the late 1990s after his family took a controlling stake in the Canadian food group it seems unlikely that he could have been aware of the challenges that lay ahead. The company, which is in the midst of a major overhaul to address the structural shortcomings of its meat and bakery business, is struggling to tread water in the current climate of high costs and declining consumer spending. And while McCain remains upbeat on the Maple Le
There are currently no comments on this article
Be the first to comment on this article