Saputo, the Canada-based dairy major, has posted a sharp rise in third-quarter losses on the back of an impairment on its UK business.
The company, which also has operations across North America and in Australia, booked a loss of C$518m (US$362.6m) for the three months to the end of December. A year earlier, Saputo had run up a loss of C$124m.
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A “non-cash goodwill impairment charge” of C$674m linked to the group’s UK arm was central to the widening losses.
Third-quarter revenues increased 17% to $4.99bn.
Saputo’s UK operations sit within its wider European division. The company said its adjusted EBITDA in the region rose but the impairment came from “ongoing challenging market conditions” in the UK.
The trading environment in the country meant “a slower-than-expected cadence of margin recovery” for its UK unit.
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By GlobalDataLast month, Saputo set out plans to shut a dairy facility in northern England. The company said it had started discussions with staff at its plant in Kirkby Malzeard in North Yorkshire, where the Wensleydale cheese brand is made.
If the facility is closed, production will move to another Saputo plant in the country.
Production at a Saputo site in south-west England ended last May.
The group reported higher third-quarter revenues across all its geographic divisions on the back of improved volumes and domestic selling prices.
However, Saputo said: “Depressed dairy commodity markets, inflationary pressure and a challenging consumer spending environment has significantly impacted the company’s ability to deliver against its previous expectations. Given this, we have decided to withdraw our previously disclosed long-term adjusted EBITDA aspirations.”
Just Food has approached the company to ask what those aspirations were.
The Canadian dairy major has been restructuring its global operations, with the closure of factories in Australia and the US.
In September last year, the company confirmed its plans to close its King Island Dairy operation in Australia by mid-2025, impacting 58 employees.
In June, Saputo gave further details on its plans to shut down six of its US facilities, two of which had already ceased operations, located in Belmont, Wisconsin, and Big Stone, South Dakota.
The other four were earmarked for closure sometime in the early part of 2025 – two in Wisconsin at Lancaster and Greenbay, and a pair of facilities in California located in Tulare and South Gate.
