Canadian juice and food maker Lassonde Industries has booked higher first-half sales and profits despite reporting a “challenging competitive environment” domestically that is expected to continue until the end of the year.
First-half sales were CAD746.6m (US$577m), up 9.1% on the same period last year, Lassonde said.
Operating profit for the first half of the year was CAD57.8m, versus CAD46.3m in the same period last year. First-half net profit was CAD28.6m, against CAD21.9m a year ago.
The company said its results were boosted in part by improved profitability within its US operations, combined with a favourable impact of foreign exchange movements on the conversion into Canadian dollars of the financial results of those entities.
“In Canada, a favourable impact driven by improved profitability has been more than offset by an unfavourable impact of a low Canadian dollar on US-dollar purchases,” the company said.
Lassonde chairman and CEO Pierre-Paul Lassonde added: “We are satisfied with our results for the second quarter and first six months of 2016. They demonstrate our ability to adapt at a time when a low Canadian dollar continues to exert considerable pressure on the operating costs of our Canadian entities.”
Lassonde said it is seeing “moderate growth in industry sales in the US fruit juice and drink market”, but the situation differs in the Canadian market where “industry sales remain lower”. “As a result, the competitive environment in Canada remains challenging, and the company does not see any signs of competitive activity diminishing by the end of 2016.”
However, Lassonde said it aims to “limit the impact of this increased competition through national brand product innovation and continued private label customer development”.
“During the first quarter of 2016, the company’s sales and profit had increased significantly year over year,” Lassonde said. “Part of this increase came from the fact that, in the first quarter of 2016, there were five more delivery days than in the first quarter of 2015. Since the number of delivery days will remain constant for the year as a whole, this increase is expected to partially reverse, especially in the fourth quarter of 2016.”
Lassonde said “barring any significant external shocks, and excluding foreign exchange impacts to maintain a comparable basis, the company remains optimistic about its ability to slightly increase its consolidated sales in 2016 compared to those of 2015”.
In results for 2015 booked earlier this year, Lassonde reported sales of CAD1.45bn, up from CAD1.18bn in 2014. Growth was boosted by the full-year contribution of Apple & Eve, a subsidiary acquired in July 2014.