SunOpta sells Canadian food distribution assets
The news came just a day before the Canadian natural and organics group reported a turnaround into profit in its first quarter of 2010.
United Natural Foods, which already distributes 60,000 food products nationwide, will purchase SunOpta’s distribution assets for CDN $68m (US $66m).
SunOpta started to build its Canadian natural, organic and specialty food and natural health products distribution business in 2002, but the firm says its sale is expected to help drive profitability in the future.
“Divesting the food distribution assets is an important milestone in our strategy to focus on our core food manufacturing platform, strengthening our balance sheet and positioning the Company for the future,” said Steve Bromley, the firm’s president and CEO.
First quarter turnaround
The company’s first quarter results, released last week, saw a switch into profits after last year’s losses. Revenues for the quarter ended April 3 2010 came in at $266m compared to $232m in 2009.
Net income for the period was $4.6m, compared to a loss of $1.7m a year earlier.
“The results of the first quarter are the product of extensive initiatives we have completed, centered on improving operating results within our core business segments while at the same time improving our return on assets employed,” said Bromley in a statement.
Food distribution assets
In 2009, the firm’s Distribution Group brought in revenues of $237m, with revenues from the Canadian food distribution operations set at $169.6m. But the firm said its natural health products operations generated negative operating earnings, mainly due to additional costs in the year related to the relaunch of a number of natural health products brands.
SunOpta said it expects to realize a net gain on the sale of the Canadian food distribution business.
