Premium Brands Income Fund posted a drop in fourth-quarter profit on Friday (27 March), hurt by an insurance claim related to a product recall.

The Canadian speciality food company earned C$3m (US$2.4m) in the fourth quarter, down from C$3.2m in the previous year.

The figure includes a C$1m insurance claim after a product recall by one of its pre-packaged sandwich operations.

Revenue, however, increased 14.7% to reach C$116.7m and EBITDA rose to C$9.6m from C$8.9m in 2007.

“2008 brought with it numerous external challenges including record energy prices, rapid cost increases for a broad range of food commodities, an unprecedented product recall by one of Canada’s largest food companies and difficult weather conditions throughout the year. Despite these challenges Premium Brands continued to prosper,” said president and CEO George Paleologou.

For the full year, Premium Brands’ revenue increased by 37.7% to C$449.4m, while earnings dropped to C$20.9m from C$25.5m in the previous year.

The fund’s EBITDA for 2008 increased to C$40.6m from C$33.4m in 2007.