News 298 views last update:Feb 25, 2008

Maple Leaf announces larger 4th quarter loss

Maple Leaf Foods Inc announced yesterday that its fourth-quarter loss increased on account of a strong Canadian dollar and restructuring charges.

For the three months to December 31, 2007, the Toronto-based meat and bakery processor posted a net loss of CAD22.1m (US$21m) compared with a loss of CAD11.6m (US$11.4m) in the same period a year earlier.

Sales also dropped 6% to CAD1.27b (US$1.25b), from CAD1.36b (US$1.34b), in the same quarter in 2006.

"While we are well positioned to offset a continued rise in input costs over time, heading into 2008, we may face some short-term volatility depending on the precise timing of matching price action with cost increases, given the magnitude of the changes," Michael H McCain, president and CEO, said in a statement.

"However, we are making excellent progress in implementing structural changes in our protein operations that will substantially increase profitability and reduce currency and commodity exposure for the long term."

Sales of the company's hog operations in Ontario and Alberta were among the changes mentioned to help increase profits again.

Improved earnings from Maple Leaf's fresh pork business helped drive up operating income by 12% to CAD42.2m (US$41m).

The segment benefited from the closure of plants in Saskatoon and Winnipeg, as well as double-shifting front-end processing at a plant in Brandon, Canada, as part of its effort to significantly reduce the volume of fresh pork it processes.

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