Maple Leaf Foods has reported higher profits for 2011 although the Canadian food manufacturer saw “strong” raw material costs lead to a fall in earnings in the last quarter.
The company today (28 February) booked a 21% rise in adjusted operating income, which excludes items including restructuring costs and losses on commodity contracts, to C$259m (US$259.6m) for 2011. Net earnings more than doubled from C$35.6m in 2010 to C$87.3m last year.
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However, president and CEO Michael McCain said “unseasonably strong” raw material costs hit the margins Maple Leaf makes from prepared meats in the fourth quarter.
“We also experienced short term higher operating costs in our bakery business. These factors, combined with lower pork and poultry processing margins from year ago highs, contributed to lower relative performance in the fourth quarter,” McCain said. “We are now actively passing through pricing to help mitigate these challenges and we remain committed to executing our value creation initiatives.”
In the final three months of the year, Maple Leaf made adjusted operating earnings of C$57.4m, down 18% on the a year earlier.
Fourth-quarter net sales increased 2.7% to $1.25bn. However, annual net sales were down 1.5% at C$4.89bn.
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