Canadian food group George Weston said it expects a “satisfactory” performance for the rest of 2009 after posting an increase in net income for the 40 weeks to 10 October.
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Net earnings for the company, the parent of food manufacturer Weston Foods and Canadian retailer Loblaw, more than doubled to reach C$953m (US$905m).
Net sales reached C$24.28bn, a 1% rise on a year earlier. Operating income, however, dropped 15% to C$722m.
For the third quarter, George Weston’s net income was hit by a charge of $0.58 per common share related to unrealised foreign exchange losses.
Net income dropped 52.2% to C$86m, while operating income fell 4.3% to C$333m. Turnover dipped 1% to C$9.77bn.
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By GlobalDataThird-quarter sales from Weston Foods fell 26% to C$502m due to the sale of its dairy and bottling operations in the fourth quarter of 2008.
Weston Foods’ operating income stood at C$36m in the third quarter compared to C$38m a year earlier.
However, George Weston said operating margins improved and added that, excluding the dairy and bottling disposals, as well as stock-based compensation, Weston Foods operating income was “strong”.
“Operating income was positively impacted by lower input costs, lower fuel costs and the benefits realised from productivity improvements and other cost-reduction initiatives,” George Weston said.
Loblaw’s retail revenues for the third quarter dropped 0.2% to C$9.47bn. Same-store sales dipped 0.6%.
Sales were hit by the sale of Loblaw’s foodservice business in the fourth quarter of 2008 but were helped by 0.2% by the retailer’s acquisition of T&T in September.
Loblaw’s operating income for the third quarter reached C$376m, an increase of 21.3% on the year.
“The company’s performance in the third quarter of 2009 was strong compared to the third quarter of 2008,” George Weston said.
“Loblaw continues to progress in its turnaround efforts, focusing on food offering enhancements, product innovation, store renovations, infrastructure improvements and increasing customer value.
“Weston Foods brand and product development efforts continue, while its continuing focus on plant and distribution optimisation along with other ongoing cost reduction initiatives continue to ensure a low cost operating structure.”
