Canadian Maple Leaf Foods has reported an increase in sales for the first quarter of 6.3% to CAN$1.3 billion compared to $1.2 billion last year, reflecting price increases and the benefit of favourable foreign currency changes on fresh meat sales.
“Results in the first quarter were overshadowed by depressed margins in our packaged meat operations, as we continue to recover from the major product recall last year,” said Michael H. McCain, president and CEO.
“While volumes improved, which was our first priority, margins will take longer to restore. Our bakery businesses have largely rebounded from the commodity impacts of last year, and our protein restructuring is yielding ongoing benefits. Although we are in the midst of a deep global recession, our product portfolio delivers good value at reasonable prices. As our business has stabilised, we are now focused on sustaining the volume recovery, improving margins and realising higher growth rates in our core categories.”
Adjusted operating earnings for the Agribusiness Group, which includes hog production and animal by-products recycling in the first quarter of 2009 increased to $2.1 million from a loss of $2.8 million last year. Results for the first quarter last year included $8.4 million in government support.
While earnings from by-products recycling operations were consistent with last year, results in hog production improved significantly due to lower production following the sale or exit of non-core operations in Ontario and Alberta. Restructuring and simplification of the core operations in Manitoba resulted in operational improvements such as lower cycle times and improved feed efficiency and hog quality.
Meat Products Group
Adjusted operating earnings in the Meat Products Group, which includes e.g. pork, poultry and turkey products, declined to $11.4 million in the first quarter of 2009 compared to $25.0 million last year.
Margins in packaged meat products were significantly lower than last year due to the impact of volume recovery efforts following last year's product recall. Higher raw material costs and the effect of foreign exchange on raw material costs could not be passed on in this environment of business recovery, and significant promotional costs were incurred to support volume recovery objectives.
• Maple Leaf