Canadian food manufacturer Maple Leaf Foods has booked a drop in first-half profits.
In the six months to the end of June, net earnings amounted to C$33.3m (US$33.2m), a 5.2% decline on the prior year.
Adjusted operating earnings, which excludes items like restructuring costs, fell in each division. Maple Leaf's group adjusted operating earnings dropped 12.3% to C$106.2m.
The company said improved profitability in its fresh bakery and prepared meats business helped its results "rally significantly" in the second quarter after a "weak" first quarter. Net sales edged up 1.2% to C$2.42bn.
"We are heading into challenging commodity markets driven by drought conditions throughout North America that will fuel further food inflation," said president and CEO Michael McCain. "Our business fundamentals are strong and we will take action to manage ongoing cost increases."
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TORONTO, Aug. 1, 2012 /CNW/ - Maple Leaf Foods Inc. (TSX: MFI) today reported its financial results for the second quarter ended June 30, 2012.
Adjusted Operating Earnings(1) for the second quarter were $71.9 million compared to $77.5 million last year.
Net earnings for the second quarter were $32.5 million, compared to $24.6 million in the second quarter last year.
Adjusted Earnings per Share(2) were $0.28 compared to $0.30 last year.
"Our results rallied significantly from a weak first quarter due to improved profitability in both our fresh bakery and prepared meats businesses," said Michael H. McCain, President and CEO. "We've implemented selective price increases, grown our core branded businesses and our value creation initiatives are contributing to margin growth. While we made excellent progress in the quarter, we are heading into challenging commodity markets driven by drought conditions throughout North America that will fuel further food inflation. Our business fundamentals are strong and we will take action to manage ongoing cost increases."
(1): Adjusted Operating Earnings, a non-IFRS measure, is defined as earnings from operations before restructuring and other related costs and associated gains, other income (expense) and the impact of the change in fair value of non-designated interest rate swaps, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets.
(2): Adjusted Earnings per Share ("Adjusted EPS"), a non-IFRS measure, is defined as basic earnings per share adjusted for the impact of restructuring and other related costs and associated gains, the impact of the change in fair value of non-designated interest rate swaps, hedge ineffectiveness recognized in earnings, unrealized (gains) losses on commodity futures contracts, and the change in fair value of biological assets, net of tax and non-controlling interest.
Original source: Maple Leaf Foods
