US co-operative group Land O’Lakes has posted net earnings of US$26.1m for the first quarter of 2006, up from $24.3m in the first quarter of last year, on net sales of US$2.1bn, up marginally from $2.0bn last year.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to $69.4m, from $71.3m for the first quarter of 2005. The company said that EBITDA on a normalised basis, excluding the effects of unrealised hedging, asset sales, impairments, legal settlements, debt extinguishment costs and other special items was $61.5m, against $67.0m in the first quarter of 2005.

Land O’Lakes reaffirmed its guidance for full-year normalised EBITDA of $260m for 2006. The company also reported an improved long-term debt-to-capital ratio of 41.1% as of 31 March, 2006 against 50.7% on 31 March, 2005.

In addition to publishing its first-quarter results, Land O’Lakes also reported on four strategic imperatives aimed at continuing the company’s progress towards “becoming more focused, more disciplined, financially stronger and positioned to deliver improved performance and explore strategic growth opportunities in its core businesses”.

The four areas highlighted for development have been identified as Best Cost, Best People, Superior Insight and Superior Portfolio Management.

Best Cost involves a systematic and disciplined evaluation of all processes and overhead costs in all its businesses, Land O’Lakes said. The company stressed that this is not a one-off, short-term initiative, but is focused on producing meaningful, ongoing savings over time and making strategic cost reduction an integral part of the company’s culture.

Best People intensifies the company’s focus on having the best people in the right positions. The company said it was in the process of “identifying critical skills and roles, defining expectations and accountabilities and expanding employee development opportunities”.

Superior Insight meant “winning in the marketplace through superior knowledge and insight”. Initial efforts are focusing on updating and standardising internal decision-making and strategic-planning processes.

Regarding Superior Portfolio Management, Land O’Lakes said it would be continuing efforts to optimise its portfolio of businesses, with a focus on reducing involvement and investment in non-core or underperforming businesses. Reflecting this strategy, the company sold off its swine production and fertiliser businesses last year. Current priorities include identifying strategic alternatives for the Layers business and improving the financial performance of the company’s Dairy Foods Industrial assets.