Saputo received boost from butter and cheese prices in the US

Saputo received boost from butter and cheese prices in the US

Canadian dairy giant Saputo has reported higher half-year profits on the back of its acquisition of Australian dairy Warrnambool Cheese and Butter Factory and improvements from its US business.

Saputo posted an 11.5% rise in net earnings to C$301m (US$265.2m) for the six months to the end of September. EBITDA was up 14.2% at C$551.1m.

The company's profits rose faster in the second quarter. Net earnings totalled C$155.7m, an increase of 16.8% on the year. EBITDA amounted to C$282.2m, up 17.4%.

Saputo's results contained the expected impact from its purchase of Warrnambool Cheese and Butter Factory.

However, rising cheese and butter prices in the US helped its revenues and earnings from that market.

First-half revenues climbed 20.8% to C$5.32bn. In the second quarter, Saputo saw revenues rise 21.1% to C$2.7bn.

Higher ingredients and operational costs led EBITDA from Saputo's domestic business to fall in the second quarter.

"The quarter's results were generally in line with our estimates and consensus, though higher-than-expected profits in the US and international offset weaker-than-expected profits in Canada. The company's growing product and geographic diversity appears to be sheltering Saputo from the extremes of the earnings volatility previously caused by commodity swings," TD Securities analyst Michael van Aelst said.