Maple Leaf: earnings up after hog farm sales
Adjusted operating earnings for Maple Leaf Foods' agribusiness group have gone up in the second quarter of 2009 in comparison to 2008.
Earnings for the Agribusiness Group, which includes hog production and animal by-products recycling, increased in the second quarter of 2009 to CAN$16.3 million (US$15.1 million) from CAN$7.6 million (US$7.0 million) last year.
Despite extremely challenging market conditions, the group's results improved following the sale or exit of non-core hog production operations in Ontario as part of the company's protein restructuring, and operational improvements in core operations in Manitoba.
The company owned approximately 215,000 hogs in the quarter, representing approximately 20% of the supply into the Brandon processing plant. Results for the second quarter also included CAN$3.0 million (US$2.8 million) in government support to compensate hog producers for losses in prior years. Results from rendering operations were strong but down from the prior year period as volumes and commodity prices declined.
In total, the company reported that net earnings amounted to CAN$4.9 million (US$4.2 million) for the second quarter. Last year, in the second quarter, Maple Leaf suffered a loss of CAN$9.4 million (US$8.6 million).
Sales for this 2009 quarter decreased by 2.5% to CAN$1.3 billion (US$1.2 billion) compared to CAN$1.4 billion (US$1.3 billion) last year.
Adjusted operating earnings increased 131% to CAN$43.6 million (US$40.3 million) in weak protein market conditions.
Adjusted Operating Earnings in the Meat Products Group, which e.g. includes fresh pork, poultry and turkey products, were CAN$1.7 million (US$1.6 million) in the second quarter of 2009.
"Our stronger results reflect good performance in our bakery businesses and steady improvement in our prepared meats business, recovering from the product recall of last August," said Michael H. McCain, president and CEO.
"We are realising material positive benefits from the transformation of our protein operations over the past several years, which protected us from challenging commodity markets in the quarter. While we have made good progress, there remains significant value creation opportunity with very positive effects on our future financial results."
Maple Leaf Foods reported its financial results for the second quarter ended June 30, 2009, on Wednesday. To see total figures, click here.
Maple Leaf Foods
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