SunOpta, the Canadian organic food and beverages firm, expects to reap as much as CAD10m (US$6.9m) in added revenue from the Covid-19 crisis as more and more shoppers eat at home amid restrictions on people’s movements.
Supermarkets around the world are experiencing a surge in foot traffic as consumers stock pile products from meat to pasta and tins of beans, as well as cleaning products, hand sanitisers and toilet rolls. But as foodservice outlets such as restaurants and fast-food chains either close their doors or take other precautionary and restrictive measures to prevent further contagion, retailers and manufacturers are having to deal with a spike in demand.
Today (19 March), Toronto-based SunOpta issued new earnings guidance for the first quarter, which ends on 28 March, based on actual numbers for January and February, and an estimate for March. The company is engaged in the manufacture of plant-based milks, soups, health snacks and fruit juices, as well as ingredients.
Revenues are expected to rise to a range of CAD320m to CAD340m, compared to CAD305.3m in the same quarter a year ago, with CAD5m-10m of that total attributed to the impact of Covid-19.
In terms of adjusted EBITDA, Nasdaq-listed SunOpta is predicting a result of CAD21m-25m, up from last year’s CAD10.9m. Around CAD500,000 to CAD1.5m of that forecast is attributed to coronavirus.
However, some of those aforementioned gains are expected to be offset to a certain extent by weakness in the Mexican peso on its operations in that country.
“The positive margin impact of the revenue growth is being more than offset by an approximately CAD2.5m unrealised loss on Mexican inventory revaluation as a result of the peso devaluation,” the company said in a statement.
Elsewhere in the first-quarter guidance, SunOpta could see a net loss attributable to shareholders of CAD2m or a profit of equal measure, an indication of the uncertainty around the spread and impacts of coronavirus.
Chief executive Joe Ennen said: “I am pleased to report that SunOpta expects to double adjusted EBITDA, excluding disposed operations, in the first quarter of 2020 versus the prior year.
“The adjusted EBITDA results reflect strong performance in all three of our business units. We continue to deliver very strong revenue growth and margin expansion in our plant-based beverages business unit, supported by sequential improvement in our fruit-based segment.”