Restructuring costs affect net earnings for Maple Leaf Foods
Net earnings for the fourth quarter ended 31 December fell by 79.8% as earnings dropped from CAD$59.1m to $11.9m in comparison to 2017, while for the twelve months earnings decreased by $62.8m compared to the previous period.
The processor said net earnings were impacted by restructuring costs of $42.2m for the fourth quarter and $46.2m for the twelve months, primarily related to the company's previously announced strategic investment in poultry and acquisition costs.
During 2018, Maple Leaf Foods acquired two major meat businesses in Cericola Farms and Viau Foods, which they said would provide “new and attractive growth avenues” in underlying businesses.
Overall sales for the business remained steady – rising by 2% for the fourth quarter and decreasing by 0.8% for the full year.
Other highlights included adjusted EBITDA margin of 10% with strong commercial performance offset by adverse fresh market conditions.
Additionally, the business said that it had made progress on strategic growth initiatives including further momentum in sustainable meats, renovation of the entire brand portfolio and continued double-digit growth in plant protein.
Maple Leaf Food’s president Michael H McCain said despite the most challenging industry pork markets in a decade, the company is well positioned for future growth.
“We delivered a 10% or greater Adjusted EBITDA margin in three out of four quarters," said McCain.
“Strong performance in our branded prepared meats business, a rapidly growing plant protein business, recent acquisitions and planned investments point to the strength of our foundational strategies. By striving passionately to 'raise the good in food,' we are uniquely positioning Maple Leaf for sustainable growth as we satisfy the protein demand of a growing population who have new ideas about what good food means.”
As well as its financial results, Maple Leaf Foods also delivered its outlook for 2019, which included investing approximately $400m in capital expenditures and grow its position in the plant-based protein market under its Lightlife Foods and Field Roast brands.
