SunOpta reports record revenue for ‘challenging’ fiscal 2008

By Caroline Scott-Thomas

- Last updated on GMT

Canadian natural and organics food group SunOpta has reported record revenues despite a “challenging year”, attributing the increase to its business strategy combined with continued interest in healthy foods.

Market researchers have suggested that consumer appetite for health and wellness ingredients is heightened during times of economic crisis, as people prepare more foods at home and become more concerned about their overall health.

SunOpta declared a 31 percent increase in revenue for the full year ended December 31 2008 to $1.055bn, compared to $802.5m in 2007. However, the company declared a loss of $10.9m due to “economic conditions and the decline in the company’s stock price.”

The company’s president and CEO Steve Bromley said: “2008 was certainly a challenging year for our company as we navigated through the issues we experienced in the SunOpta Fruit Group and the impact of the deterioration in the global economy.”

The company’s fruit division was blighted by a legal case during the beginning part of the year due to lack of proper internal controls and over-valuation of the division in 2007. This led to delayed results for the fiscal year and, the company said, “goodwill impairment”.

Reducing debt, increasing liquidity

Despite this, SunOpta managed to reduce its bank debts by $24.6m during the year, which contrasts with its increased debt of $18m reported for 2007. The company said that this, as well as decreased spending on operating activities – from $35.1m in 2007, to $33.7m – is “indicative of the extensive efforts to reduce working capital and control spending across the organization.”

Other companies have also been looking to increase liquidity – the availability of assets that are easily able to be converted to cash – and reduce debts to create a buffer against volatile commodity markets during the recession. When agricultural foods giant Archer Daniel Midlands released strong second quarter results last month, for example, it also outlined building liquidity in particular as one of its strategies for dealing with the difficult economic climate in the coming year.

Looking ahead

SunOpta said that its prospects for 2009 are encouraging and is confident of improved returns, although it announced at the end of February that it would refrain from providing revenue and earnings guidance for 2009 due to “uncertain and rapidly changing macro-economic conditions.”

Bromley said that the company had started the year cautiously due to the difficulties of the global economic environment, but added that he is confident of SunOpta’s position as “a key player in health conscious food categories”​.

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