SunOpta profits hit by commodity costs, despite 25% sales increase
The company reported sales of $272.4m during the third quarter ended October 1, 25.3% up from $217.5m for the same period last year. However, profit fell nearly 90%, from $34.7m last year, to $3.5m during Q3 2011.
The company said its increased revenues reflected continued growth in the market for natural and organic foods, driven by strong performance in its International Foods Group. However, as well as the impact of higher commodity costs, the company said earnings were also reduced due to foreign exchange losses, which contrasted with gains in the third quarter of 2010.
SunOpta president and CEO Steve Bromley said: "Results for the third quarter reflect continued growth in the core natural and organic foods categories within which we operate. Our results also reflect the impact of the difficult commodity environment over the course of this year, especially in the sunflower component of our business.
“We continue to be very confident in our strategy and are encouraged by the number of new initiatives and opportunities in the pipeline. We are focused on expanding our business in fast growing healthy foods categories while at the same time improving operating margins and returns on assets employed. We believe we are well positioned in the natural and organic foods sector and are confident in our future prospects."
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. And the Organic Trade Association released new research last week, including the finding that the organic industry in the United States grew at a rate of nearly 8% in 2010.
