Reporting its results for the third quarter ended 30 September, Canadian natural and organic food company SunOpta posted record revenues, which were up by 26.5% to US$145m. The revenue growth represents consolidated internal growth of 15.8% and growth via acquisitions of 10.7%.
This brings total revenue growth for the first nine-months of the year to $434.52m, a year-on-year increase of 42.9%. This increase reflects internal growth of 17.7% plus growth via acquisitions of 25.2%.
Operating earnings for the quarter totalled $3.55m, or 2.4% of revenues, compared to $3.86, or 3.4% of revenues last year. SunOpta said this decline reflects the impact of lower year-on-year quarterly operating earnings within the company’s sunflower operations of $2.43m including the impact of the previously announced gross margin losses of $2.1m for the write down of inventory and negative margins related to the previous year’s crop. Excluding the results of the sunflower business, operating earnings increased by 54.6% over the previous year.
Q3 net earnings were $1.52m, or $0.03 per share, down from $2.09, or $0.04 per share, last year, again reflecting sunflower losses. However, operating earnings for the first nine months of the year have increased by 43%, rising to $18.35m from $12.84m. Net earnings for the first nine months increased to $8.88m, or $0.15 per share, up from $7.49m, or $0.13 per share posted for the first nine months of last year (excluding the impact of the IPO of Opta Minerals in Q12005).
SunOpta has reconfirmed its revenue guidance of $585m to $600m for the 2006 fiscal year. However, earnings guidance has been impacted by the write down within the company’s sunflower business. Excluding losses realised within sunflower operations, SunOpta said it expects to realise its annual earnings guidance figures.
Jeremy Kendall, chairman and CEO of SunOpta said: “We believe we have made the necessary adjustment in our sunflower business model by focusing on proven genetics, simplifying our product line and increasing the percentage of irrigated lands where our crop is grown. We are pleased with our internal growth of 17.7% for the year and expect internal growth to continue to be in the 15-20% range, including our recently announced contract to supply refrigerated organic soymilk to a major retailer. While revenue growth is important, the company remains primarily focused on growing the bottom line faster than the top line and has a number of margin improvement and cost cutting initiatives in place to achieve this.”