CANADA: Maple Leaf FY losses widen
Canada's Maple Leaf Foods said today (24 February) that its underlying net losses widened during 2008.
The company, which was hit last year by a nationwide recall of deli meats, booked a net loss from continuing operations of C$36.9m (US$29.7m) for 2008 - against a loss of C$23.2m a year earlier.
Maple Leaf's underlying earnings fell from C$199.1m a in 2007 to C$128.4m in 2008. However, costs linked to the recall, plus restructuring costs and interest charges pushed the bottom line into the red.
Full-year sales inched up 0.6% to C$5.24bn, buoyed by a 5% rise in revenue during the fourth quarter of the year thanks to price increases and contributions from acquisitions.
Maple Leaf's fourth-quarter results included a net loss from continuing operations of C$14.6m, against a net loss of C$23.7m a year earlier.
The company's adjusted earnings per share reached C$0.12 for the fourth quarter, compared to C$0.20 a year before.
President and CEO Michael McCain acknowledged that the recall meant Maple Leaf's profits had fallen by 40% during the fourth quarter of the year. The recall, which took in over 190 products amid a salmonella outbreak linked to the death of at least 20 people, cost Maple Leaf C$40-50m before taxes.
However, McCain insisted the business had showed "substantial improvement" in other areas.
"These included normalising our bakery margins after absorbing the impact of commodity markets earlier in the year, increasing benefits from our protein business restructuring, and steadily regaining consumer confidence in the Maple Leaf brand," McCain said.
Maple Leaf declined to give a forecasts for its business performance in 2009. "We look forward to improving trends in 2009," McCain said.
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