Canadian meat, agribusiness and bakery products group Maple Leaf Foods has reported a drop in sales and earnings for the first quarter of 2006.
Sales for the first quarter of 2006 fell by 5% to CDN$1.4bn (US$1.24bn), from CDN$1.5bn in the same period of 2005. The company attributed the drop to lower commodity prices for export products.
First-quarter earnings from operations before restructuring costs fell from CDN$61.2m to CDN$51.8m, with last year’s first-quarter earnings from operations not including CDN$13.2m (CDN$8.3m after tax and minority interest) in restructuring costs. Maple Leaf said that this is the most appropriate basis on which to evaluate operating results, as restructuring costs are not representative of continuing operations.
Net earnings fell to CDN$17.3m (CDN$0.14 per share) from CDN$21.1m (CDN$0.17 per share) excluding restructuring costs in the first quarter last year.
“We made good progress in earnings recovery during our first quarter of 2006, as we addressed factors that challenged us in late 2005,” said Maple Leaf’s president and CEO Michael H. McCain. “However, as expected, protein markets were weak on a number of fronts coming into this year.”
Earnings from the company’s Protein Value Chain, which incorporates its Meat Products group and Agribusiness Group business, saw earnings from operations fall from CDN$40.6m to CDN$27.1m in the first quarter. However, earnings from operations in Maple Leaf’s Bakery Products Group rose from CDN$20.6m to CDN$24.7m.
“We are delighted with the performance of our balanced portfolio in the midst of these very, very challenging protein markets around the world,” McCain said. “We have been successful implementing price increases to offset the inflationary effects of higher energy costs. We achieved excellent results from our consumer foods and fresh bakery operations, benefiting from innovative product marketing and merger synergies. These achievements were successful in muting the ongoing impact of weak fresh pork and poultry markets, driven by currency challenges and global supply and demand of all proteins.”