Weston Foods, the manufacturing arm of Canadian food processing and distribution business George Weston Ltd, has recorded results described as “below expectations” by the parent company’s CEO.

It saw an increase in sales but a dip in income in the second quarter.

Second-quarter revenue (up to 17 June) was CAD509m (US$405.7m), an increase of 2.6% compared to the same period in 2016, although the company admitted this included the positive impact of foreign-currency translation of approximately 2.4%.

Operating income in the second quarter was CAD24m, a decrease of 7.7% compared to the same period in 2016. The company said the fall was primarily due to the decline in underlying operating performance. 

Weston Foods’ adjusted EBITDA in the second quarter was CAD54m, a decrease of 8.5%. 

The firm said the drop was driven by continued investments in the business, partially offset by productivity improvements.

Weston Foods said it recorded restructuring and other charges of CAD5m in the period in question. These charges “primarily relate to employee-related costs and restructuring plans pertaining to previously closed manufacturing facilities in Canada and the US with production transferring to other facilities”. 

Galen Weston, chairman and CEO of parent company George Weston, said: “Weston Foods results were below expectations due to challenges in meeting an aggressive plan in the frozen business, which more than offset solid performance in the other three business segments.”

George Weston also has a controlling interest in Loblaw, Canada’s largest supermarket retailer. The company is controlled by the Weston family.