CANADA: Saputo Q3 sales, earnings jump
International. Mornigstar propel Saputo earnings
Canadian dairy major Saputo has booked an increase in third-quarter sales and earnings, boosted by its acquisition of Morningstar Foods and a strong performance from the group's international businesses.
The company said that net revenue rose 30% to C$2.34bn (US$2.21bn) in the three month period. Top line gains were driven by the contribution of former Dean Foods unit Morningstar, which Saputo renamed Saputo Dairy Foods USA following its acquisition of the business last year.
Net earnings totalled $144.1m, an in of 10.8%, while EBITDA jumped 22.4% to $47.5m. The contribution Morningstar made to profits more than offset higher ingredients and operational costs that dented profitability in the group's Canadian operating unit.
TD Securities MD Michael Van Aelst said that the result was "decent" but highlighted the challenges facing the North American dairy sector.
In contrast, Van Aelst said Saputo's international earnings performance was "very strong". The group booked a 175% increase in international profits - albeit off a low base. This, was 67% higher than TD Securities expectations.
"Incremental volume growth related to its capacity expansion, much higher
international prices and lower-than-expected costs contributed to the extraordinary jump in profits," Van Aelst said.
Click here for the earnings release.
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