Maple Leaf Foods booked improved sales and margins for its first fiscal quarter as the last of its further-processing plants slated for closure in 2011 completed its last production run.
The Toronto meat processing firm on Thursday reported a net loss of $2.86 million on sales of $720.25 million for its quarter ending March 31, well up from its $131.99 million loss on $711.35 million in sales in the year-earlier period.
However, removing restructuring costs, interest and taxes from the equation, the company nearly doubled its gross margin to $89.22 million, up from $47.94 million.
“We recorded a $40 million improvement in our adjusted operating earnings year over year, restored our margins and made excellent progress in recovering our prepared meats volume from last year’s unprecedented environment,” CEO Michael McCain said in a release.
“We were able to reduce our operating costs as we come to the final stage of our network transition, and today, with the last production run at our last legacy plant, we are bringing an end to our duplicative supply chain,” he said.
The last of the Maple Leaf prepared foods plants to close its doors is the former Shopsy’s sliced meats plant on Bartor Road in Toronto, which was originally slated to close by the end of 2014.
Operating since 1956, Bartor Road was the sliced meats plant that went offline temporarily after it was connected in 2008 to a listeria outbreak that sickened 57 people in seven provinces from B.C. to New Brunswick, including 41 people in Ontario.
The plant was one of six facilities slated in 2011 for closure, in the final phase of Maple Leaf’s “value creation plan,” consolidating all its processed meats operations at four sites through major expansions at plants in Winnipeg, Saskatoon and Brampton and a new plant at Hamilton.
The final phase of the company’s restructuring plan, McCain said Thursday, “is to bring our new state-of-the-art facilities to full operational effectiveness. All of this keeps us on track to reach our strategic financial target.”
Improvement in the company’s meat products group stemmed mainly from price increases put in place in the prepared meats business during the second quarter of 2014, in response to “higher raw material costs, increased volumes in the fresh pork business and improved sales mix in the fresh poultry business.”
Maple Leaf’s agribusiness group, including its Canadian hog production operations and toll feed sales, saw sales slip by $1.1 million from the year-earlier Q1 on lower toll feed sales.
The company’s hog production operations, on the other hand, benefited from hog prices, net of its hedging activities, but added costs for dealing with prevention of porcine epidemic diarrhea (PED) offset those gains. — AGCanada.com Network