CANADA: Restructuring costs pushes Maple Leaf into red
Restructuring costs meant that Maple Leaf recorded a loss for the third quarter
Canadian food group Maple Leaf Foods today (28 October) posted a third-quarter loss of over C$16m (US$15.6m) thanks to its restructuring programme that will streamline its business.
The bakery-to-meat processing company booked a net loss of C$16.1m for the three months to the end of September.
The result compared to net earnings of C$22.5m a year earlier after Maple Leaf incurred restructuring costs of C$50m and a one-time charge of C$14.6m related to interest-rate swaps.
Earlier this month, Maple Leaf announced a five-year plan to make the company a leaner business, including plans to consolidate and modernise its plant network.
Third-quarter sales were "consistent" with last year, reaching C$1.29bn, Maple Leaf said. Excluding currency fluctuations, sales increased by 2%.
Maple Leaf also published adjusted operating earnings - which stripped out the restructuring costs and the impact of the interest-rate swaps - of C$64.5m, up 2% on the year.
Commenting on the results, president and CEO Michael McCain said the "story of 2010" was the "rapid rise" in raw-material costs in grains and meat proteins.
McCain added: "Notwithstanding this significant inflation, we realised our sixth consecutive quarter of earnings growth, continued margin expansion in the protein segment, and double digit earnings per share improvement over last year."
Click here for the full earnings statement from Maple Leaf.
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