Maple Leaf Foods Q2 losses widen
Maple Leaf Foods Inc. saw its loss widen in the second quarter as the giant food producer lost $9.4 million for the three months.
The next three months, however, should see an improvement in its fortunes, the company said Thursday.
Three-month stock chart for Maple Leaf Foods
Maple Leaf Foods quarterly results translated into a net loss of seven cents a share for the 90 days ended June 30, compared to a net loss of a penny a share for the same time last year.
While citing the past few months as "very difficult," Michael McCain, Maple Leaf's president and chief executive officer, said the rest of the year should produce better results.
"We believe the second half of 2008 will show a substantial recovery as markets stabilize and the early benefits of restructuring are realized," McCain said.
Sales for the period reflected a slowing economy, up 2.8 per cent, reaching $1.4 billion. Maple Leaf Foods is facing dragging consumer demand combined with higher commodity prices.
In May, energy prices posted an 18 per cent increase compared to last year. As well, food prices were up almost three per cent, both factors which weigh heavily upon Maple Leaf's bottom line.
In addition, the company is in the midst of cutting its pork processing operations from six plants down to one facility, located in Brandon, Man. That restructuring is on track to be completed by the middle of 2009, the company said.
Companies usually show earnings before taking into account extraordinary expenses, such as restructuring costs. Looking at profit from its operations, Maple Leaf lost $9.4 million, or one cent per share for the quarter, compared to an operating gain of 17 cents for the same period last year.
Maple Leaf owns 90 per cent of Canada Bread Co., the national bakery.
In its second quarter, Canada Bread earned $6.5 million, down substantially from a profit of $21.2 million one year earlier.
The bread maker said it should also see its financial picture improve in the coming months. A major factor is the lower-priced wheat which is due to be harvested in August, the company said.
Canada Bread has been hiking its prices as an effort to pass along higher raw material prices to consumers. Statistics Canada noted that its index of bakery products increased 12.3 per cent in May compared to the same time last year.
Shares in Maple Leaf Foods ended the trading day at $9.69, down 31 cents.
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