Maple Leaf sees group losses widen in Q1
Adjusted operating earnings stood at -$29.9m, compared to -$27.9m the year before, as the porcine epidemic diarrhoea virus (PEDv) outbreak, affecting North America and Canada, impacts raw material prices.
Within its Meat Products Group sales increased 4% to $705.4m, with sales of prepared meat increasing due to higher volumes, and the benefit of price increases implemented during the third quarter of 2013, said the firm.
Adjusted operated earnings within the division increased to a loss of $27.4m, compared to a $10.5m loss the year before. However, significant transitional costs as a result of the firm’s restructure hit profits.
"In primary processing, higher pricing for fresh pork and increased volumes in fresh poultry more than offset lower fresh pork volumes," added the statement from the firm.
Michael H McCain, president and chief executive of Maple Leaf Foods, said: "Although our financial performance is challenging in transition, particularly with volatile raw material costs, our first quarter was marked by significant accomplishments."
He confirmed that its prepared meats network transition continued to proceed on course, with production increased at its new flagship site in Hamilton, and improved performance at its Western Canadian plant expansions.
He added: "Pork markets have been impacted in an unprecedented way due to a virus in the US hog industry, which has renewed pressure from a sharp rise in raw material costs. We have accelerated price increases in the second quarter to recover margins, and expect the effects of this to be transitory as the industry is forecasting a return to more normal conditions later in 2014."