Canadian food and beverage group Lassonde Industries posted a drop in first-quarter net earnings today (12 May) as the more “challenging” environment hit sales and earnings.
Higher tax payments led net income to fall to C$5.8m (US$5m) compared to net earnings of C$6.1m in 2008, the pesto and pasta sauce maker said.
The company’s operating income also fell, totalling C$9.2m in the first quarter, down C$0.8m from the C$10m reported for the first quarter of 2008.
Profits fell as amortisation costs increased by C$0.7m, despite net sales inching up 0.9%. Net sales for the period reached C$120.1m, with Lassonde citing a “more challenging competitive environment” in the first quarter of 2009.
The company said its purchasing costs were affected by the relative weakness of the Canadian dollar during the first quarter of 2009 compared to the same quarter in 2008. The impact was offset, however, by a decrease in the company’s transportation costs.
Earnings before income taxes were also affected by the higher amortisation expense
and stood at C$8.5m at the end of the quarter, a 6.2% decrease from the same quarter in 2008.
