Saputo, the largest dairy processor in Canada and one of the leading cheese producers in the US, has posted net earnings of C$42.1m (C$0.41 per share) for its Q1 2003, ended 30 June 2002, up 4.5% from C$40.3m (C$0.40 per share) year on year.
Revenues of C$873.9m were essentially flat year on year. Although, Saputo said, had it not been for the drop in the average price per pound of cheese in the US during the Q1 2003, the revenues would have been greater by about C$37m. Also, Grocery Products Sector sales in Q1 2002 included C$19.8m from the cookies, fine breads and soups that were transferred to Dare Foods in July 2001.
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Overall, EBITDA was C$89.4m, down 1.9% compared with C$91.1m for the Q1 2002. EBITDA of Saputo’s Canadian Dairy Products Sector increased by 20.7% as compared to the same period a year earlier.
Cash generated before changes in non-cash working capital was C$64.1m (C$0.62 per share), up 4.6% over the C$61.3m (C$0.60 per share) of the corresponding quarter in FY 2002.
Future perspectives
Saputo noted that over the coming quarters, its Canadian Cheese and Milk Divisions will “undertake the last phases of integrating Dairyworld operations, the aim being to optimise their operations as a whole and to increase their profitability. Growth in our volumes of cheese sales in Canada is tightly connected to growth in per-capita consumption, as a result of the regulated Canadian system. Consequently, in collaboration with the industry, we plan to promote cheese consumption in Canada. Nevertheless we remain open to any growth opportunities by way of acquisition.”
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By GlobalDataMeanwhile, “Our Canadian Milk Division will concentrate its growth in Canada by increasing its penetration in the Ontario and Quebec markets, where our market shares are at about 5% and 1.6% respectively. That division will also focus its efforts on the development of value-added products and on assessing automation possibilities for certain of its operations.
“Our Cheese Division (US) will complete the integration of the plant in Pennsylvania, and will redouble its efforts in order to reach its objective of increasing sales volume by 13% for the current FY. We will also energetically be seeking potential acquisitions in cheese manufacturing in the US. With respect to the volatile-price situation on the US market, Saputo will work on developing permanent solutions designed to provide it with the means of lessening the repercussions of such volatility and its effects on our results.
“Our Bakery Division will continue with the process undertaken last March in connection with the closing of the plant in Aurora, Ontario, which is scheduled for September 2002. We will also continue with rationalisation of the transportation operations in the division, as well as initiating certain automation and robotisation projects. We intend to gradually introduce certain varieties of snack cakes on the American market beginning in the fall of 2002, while continuing to focus on greater penetration of the Ontario and Western Canadian markets so as to maximize use of the Sainte-Marie plant, which has an available manufacturing capacity of roughly 30%.”
Dividend
Saputo’s board of directors has announced a quarterly dividend up from US$0.055 per common share to US$0.10 per common share for a total of US$0.40 annually. This will take effect when the dividend of 6 September is paid to common shareholders of record on 23 August.
Financial highlights
(in C$m, except per share amounts)
Q1 ended June 30
(unaudited)
2002 2001
$ $ Change
_________________________________________________________________________
Revenues
Dairy Products Sector
Canada 511.7 493.3 3.7%
United States 319.7 319.1 0.2%
831.4 812.4 2.3%
Grocery Products Sector 42.5 60.7 (30.0%)
873.9 873.1 0.1%
_________________________________________________________________________
EBIDIT
Dairy Products Sector
Canada 49.5 41.0 20.7%
United States 31.1 40.5 (23.2%)
80.6 81.5 (1.1%)
Grocery Products Sector 8.8 9.6 (8.3%)
89.4 91.1 (1.9%)
_________________________________________________________________________
Depreciation of fixed assets 17.6 18.3
Interest 11.4 13.9
Income taxes 18.3 18.6
Net earnings 42.1 40.3 4.5%
_________________________________________________________________________
Inflow of cash related to
operations before changes
in non-cash operating working
capital items 64.1 61.3 4.6%
Net additions to fixed assets 14.7 11.8
Repayment of long-term debt and bank
loans 45.3 19.3
_________________________________________________________________________
PER SHARE
Net Earnings
Basic 0.41 0.40 2.5%
Diluted 0.40 0.39
Cash flow generated by operations,
before changes in non-cash
operating working capital items
Basic 0.62 0.60 3.3%
Diluted 0.61 0.59 3.4%
_________________________________________________________________________
Number of shares
Basic 103,282,080 102,547,536
Diluted 104,254,560 103,099,808
