Canadian meat processor Maple Leaf Foods returned to profit in 2015 on improved margins in its meat unit – the arm responsible for its value-added prepared meats, lunch kits and snacks, and fresh pork and poultry products – and the absence of one-off costs which hit last year’s bottom line.
The firm made a profit for the year of C$41.6m (US$30.9m), compared with a loss of C$213m.
Maple Leaf Foods said the profit resulted from improved margins and the absence in this year’s results of one-off financing costs related to its outstanding debt, lower restructuring and other related costs that were present in last year’s results.
Operating income, adjusted for items that are not considered representative of ongoing operational activities of the business, was C$109.8m again compared with a loss of C$75.5m.
Sales also improved by 4.3% to C$3.3bn. When adjusted for foreign exchange effects the increase was 2.4%.
FY results by division
Sales +4.5% to C$3.3bn. Higher sales resulted from increased volume in fresh pork and poultry, pricing in prepared meats, a favourable sales mix in fresh poultry and an extra week in the fourth quarter of 2015.
Adjusted operating earnings C$108.4m versus loss of C$80.4m. Earnings in prepared meats benefited from pricing, an improved sales mix, lower overall raw material costs and lower operating costs in the new prepared meats plant network. Industry pork processing margins improved over the same period last year, boosted by higher prices. Fresh poultry earnings increased as a result of higher volume, improved poultry processing margins, and improved sales mix.
Sales down at C$15.9m versus C$21.9m due to lower external sales volume for feed.
Adjusted operating earnings decreased to C$1.4m from C$8.6m as a result of lower hog prices in the second half of 2015, and increased operating costs. Also negatively impacting earnings was an increase in feed grain prices as a result of the weaker Canadian dollar.