Natural and speciality food group SunOpta has insisted that it is starting to see the benefits of investments as third-quarter revenue and profit trends showed signs of improvement.
The company said sales in the quarter slipped to US$306m versus $307.9m in the prior year. Excluding the effect of changes including commodity prices, foreign exchange rates, acquired companies and product rationalizations, revenues increased 3.5% within SunOpta Foods, the company stressed. This compares to a 4.3% decrease in sales for the first nine months of the year, which were dented by one less selling week than the previous period.
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"We had an in-line quarter on an adjusted basis, and we believe performance will improve as we realise the benefits of the foundation we have built. Looking ahead, we are making good progress in our consumer products business, the integration of Sunrise Growers and reaping the benefits of the significant investments we have made in future growth," said Rik Jacobs, president and CEO.
During the third quarter, SunOpta booked EBITDA of $13m – or $16.8m on an adjusted basis – against $18.8m in the prior year. Quarterly earnings from continuing operations came in at $0.4m versus a loss of $0.6m last year.
Again, SunOpta's performance in the third quarter was stronger than its year-to-date showing, suggesting signs of improvement. Operating income in the first nine months of the year was $25.4m, or 2.8% of revenues, compared to $41m, or 4.3% of revenues in the first three quarters of 2014. Earnings from continuing operations for the first three quarters of 2015 were $7.9m compared to $14.7m last year.
Outlining the group's strategic priorities for 2016, Jacobs indicated that the company would focus on lowering costs. The company plans to raise its gross margin in healthy beverages by “at least $6m”, deliver $5-7m in savings from the integration of Sunrise Growers, and maintain SG&A costs below 8%. The company also detailed some growth areas: it intends to expand fruit snacks sales by “at least 10%” and deliver $10m in sales from new products.
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