Maple Leaf Foods today (2 May) admitted the problems within its protein business were worse than expected after reporting first-quarter company losses that more than doubled.
The Canadian group booked a net loss of C$14.7m for the three months to the end of March, compared to C$5.8m last year. Adjusted operating earnings, which excludes items like restructuring costs, dropped 76.2% to C$7.6m.
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“This was a very difficult quarter, with lower earnings in our protein business overshadowing good improvement in our Bakery results,” president and CEO Michael McCain said. “For some time, we expected a volatile first half to 2013, but this certainly has been more severe than anticipated. Our meat business has demonstrated multiple years of progressive and steady improvement, but this quarter experienced the aggregate impact of poor market conditions, weaker volumes in the wake of necessary price advances and transition costs related to our new network.”
While Maple Leaf’s meat products and agribusiness operations combined swung to a loss, adjusted operating earnings from its bakery business jumped. However, sales were down in both divisions, leading to a 4.1% fall in revenue to C$1.11bn.
McCain insisted Maple Leaf expects results from its protein operations to improve. “While challenging in the near term, we expect steady improvements through the remainder of the year as a result of improved markets, restoring stable volumes and continued success in our supply chain conversions,” he said.
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