CANADA: SunOpta sees Q1 margin hit

By Katy Askew | 8 May 2013

Canadian food group SunOpta has booked a drop in first-quarter earnings, despite  record" revenues.

The company said operating income fell to C$10.7m from $12.8m last year. Earnings were hit by lower margins due to poor crop quality after last year's drought conditions. Net earnings fell to $5.1m, compared to $5.9m in the comparable period of 2012.

Sales at the speciality food group rose 9% to $282.8m, the company added. "We continue to experience strong momentum across our business segments and are pleased with our record revenues in the first quarter," CEO Steve Bromley said.

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SunOpta Announces First Quarter 2013 Results (on email)

Company Reports Record First Quarter Revenues of $282.8 Million

TORONTO, May 7, 2013 (GLOBE NEWSWIRE) -- SunOpta Inc. ("SunOpta" or the "Company") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on natural, organic and specialty foods, today announced financial results for the first quarter ended March 30, 2013. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

First Quarter 2013 Highlights:
Record first quarter revenues of $282.8 million, an increase of approximately 9% versus the 2012 first quarter Operating income¹of $10.7 million, or 3.8% of revenues EBITDA¹ of $16.1 million, or 5.7% of revenues Earnings of $5.1 million, or $0.08 per diluted common share "We continue to experience strong momentum across our business segments and are pleased with our record revenues in the first quarter. As we anticipated, our margins were impacted by crop quality associated with the drought-like conditions experienced in 2012, along with continued investment in a number of our consumer product and ingredient operations, and cyclical weakness in the steel and infrastructure segments within Opta Minerals," commented Steve Bromley, Chief Executive Officer. "Looking ahead, we believe that 2013 will be another successful year for our Company as we continue to execute on our core strategies of growing our value-added packaged foods and ingredients portfolio, and leveraging our integrated platform in support of our long-term operating targets. We believe SunOpta is well positioned to capitalize on future growth opportunities as consumers around the world are increasingly focused on healthy eating and healthy living."

First Quarter 2013 Results
Revenues increased approximately 9% to a record $282.8 million as compared to $259.3 million in the first quarter of 2012. The increase in consolidated revenues was driven by strong demand and increased prices for organic grains and feed products, continued growth in consumer packaged categories including aseptic non-dairy beverages and re-sealable pouch products, as well as higher sales within Opta Minerals Inc. as a result of recent acquisitions. Excluding the impact of changes including foreign exchange rates, commodity-related pricing, acquisitions, rationalized product lines and the impact on current revenues related to reduced commodity sales volumes due to the impact of the 2012 drought and delayed 2013 planting season, Food Group revenues increased approximately 7.5% versus the prior year and consolidated revenues increased approximately 6.0%.

Operating income¹for the quarter was $10.7 million, or 3.8% of revenues, for the first quarter of 2013 as compared to $12.8 million, or 4.9% of revenues in 2012. Operating earnings reflected the impact of lower soy and sunflower processing yields due to the effects of the 2012 North American drought, which negatively impacted seed quality and by-product values. In addition, margin pressure was experienced across a number of product lines in the European operations of the International Foods Group as a result of weak economic conditions in Europe and Opta Minerals was impacted by cyclical weakness in the steel and infrastructure sectors, partially offset by the positive impact of recent acquisitions, continued growth in certain consumer packaged goods categories, favorable margins on organic grains and feed products as well as the positive impact of product rationalization efforts in the Company's frozen foods operation.

Earnings for the first quarter of 2013 were $5.1 million, or $0.08 per diluted common share, as compared to $5.9 million, or $0.09 per diluted common share, during the record first quarter of 2012. Excluding discontinued operations, earnings for the first quarter of 2013 were $5.2 million, or $0.08 per diluted common share, versus $5.7 million, or $0.09 per diluted common share, during the first quarter of 2012. Earnings for the first quarter include the impact of approximately $1.2 million in pre-tax severance, acquisition and start-up costs, or approximately $0.7 million after-tax and minority interest.

For the first quarter of 2013 EBITDA¹was $16.1 million as compared to $17.6 million during the first quarter of 2012.

Balance Sheet
The Company's balance sheet remains strong and at March 30, 2013 reflected a current ratio of 1.45 to 1.00 and a net debt to equity ratio of 0.58 to 1.00. At March 30, 2013, the Company had total debt outstanding of $206.2 million, net debt of $193.1 million, total assets of $715.1 million, shareholders' equity of $331.0 million and a net book value of $5.00 per outstanding share.

Conference Call Information
The Company plans to host a conference call at 10:00 A.M. Eastern Time on Wednesday, May 8, 2013 to discuss the results for the first quarter of 2013 and recent corporate developments. After opening remarks, there will be a question and answer period. This conference call can be accessed via a link at the Company's website at To listen to the live call over the Internet, please go to the Company's website at least 15 minutes early to register, download and install any necessary audio software. Additionally, the call may be accessed with the toll free dial-in number (877) 312-9198 or international dial-in number (631) 291-4622. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days at the Company's website.


Original source: SunOpta

Sectors: Commodities & ingredients, Financials, Natural & organic, Private label

Companies: SunOpta

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