Canada’s Maple Leaf Foods has reported higher quarterly net earnings, boosted by improved market conditions.

The company reported net earnings of C$19.3m (US$14.1m), or 16 cents per share, for the first quarter to 31 March, compared to $6.0m, or 4 cents per share, in the same period of the previous year. Before accounting for restructuring costs, net earnings last year were $9.5m, or 7 cents per share.

First-quarter sales slid to $1.19bn compared to $1.25bn for the first quarter of 2003, while earnings from operations before restructuring costs increased to $48.0m compared to $33.2m last year.

“Operating earnings and earnings per share increased sharply in the first quarter, reflecting a continued improvement in both our performance and market conditions that began in late 2003,” said CEO Michael McCain.

“We realized earnings growth in both the bakery and protein businesses, despite lower North American pork processor margins compared to last year. We expect this trend line improvement to continue in 2004, and our financial performance to be enhanced by the recent acquisition of Schneider Foods, as well as the steady progress we are making in increasing our product innovation and value-added sales,” he added.

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First-quarter sales at the company’s meat products division declined to $678.6m, from $721.0m a year earlier, mainly due to a reduction in the number of hogs processed. Strong sales growth in the company’s poultry and packaged meats businesses partly offset these sales decreases. 

The company’s bakery product division recorded a 1% decline in sales to $304.0m, primarily due to the impact of the stronger Canadian dollar on US dollar denominated sales. After adjusting for this exchange rate effect, sales increased slightly from last year as a result of increased frozen bakery product sales. Maple Leaf said it had offset higher wheat prices by implementing price increases on its bakery products.

The company said the popularity of low-carbohydrate diets had not had a material effect on its bakery operations in the first quarter; however, Maple Leaf said it is beginning to see a softening in the commercial white bread market which it believes is related to reduced-carbohydrate diets.

Maple Leaf Foods said it is well positioned to face this trend due to its strong market position in whole grain and other healthy bread products. The company also launched lower carbohydrate alternative products in late 2003, and said volume sales growth of Dempster’s Carb Wise and Healthy Way Carb Conscious breads was “very strong” throughout the first quarter of 2004.