RESULTS: Maple Leaf reports more sales in Q1, 2012
Canadian hog producer and pork processor Maple Leaf reported that sales for the first quarter of 2012 increased 1% to CAN$1,160.8 million, compared to $1,147.9 million last year.
Higher sales are related to higher selling prices across the business, partially offset by lower volumes in fresh bakery and fresh pork.
Adjusted Operating Earnings, however, decreased 20% to $40.5 million compared to $50.7 million last year, primarily due to lower results in the Bakery Products Group.
"Our first quarter results were challenged, as expected, due primarily to weak fresh bakery volumes, an issue is affecting the entire industry," said Michael H. McCain, president and CEO.
"We are addressing this challenge directly and expect improved results through the remainder of 2012. Conversely, we are very pleased with the results in our Protein Group, particularly considering the significant decline in commodity industry pork processor margins.”
Sales in the Agribusiness Group, containing e.g. hog production, for the first quarter increased 14% to $65.3 million in 2012 from $57.3 million in 2011, due to increased sales volumes and higher selling prices for bio-diesel.
Adjusted Operating Earnings increased 36% to $19.1 million compared to $14.0 million last year, due to better performance in both hog production and by-products recycling operations, primarily bio-diesel. Earnings from hog production operations improved as rising hog prices outpaced higher feed costs. Performance improved in the by-products recycling operations as a result of higher prices for biodiesel and other products.
Meat Products Group
The company’s Meat Products Group reported higher sales for the first quarter, a growth of 1% to $725.5 million from $718.2 million could be seen for the first quarter last year.
After adjusting for the impact of a weaker Canadian dollar, which increased the sales value of pork exports, sales were consistent with last year, as higher fresh pork and prepared meats prices, and higher prepared meats volumes were offset by lower sales volumes in fresh pork.
Adjusted Operating Earnings decreased 17% to $22.1 million compared to $26.6 million last year, primarily as a result of lower industry pork processing market conditions in North America.
Earnings increased in the fresh poultry operations as a result of higher volumes and improved pricing of value-added products, particularly the Prime chicken product line, and improved plant operating performance. Industry processor spreads were consistent with the first quarter last year, but improved from the second half of 2011.
Earnings declined in primary pork processing operations as a result of industry packer margins that were 98% lower than last year. The Company partially offset these changes in industry margins through improved domestic sales contracts and international margins.
• Maple Leaf
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