Maple Leaf posts increased earnings in year

by Staff
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TORONTO — While Maple Leaf Foods, Inc. faced soaring commodity costs and significant restructuring costs, earnings were up dramatically for the full-year 2007.

Earnings for the year ended Dec. 31 were C$207,144,000 ($205,563,000), equal to C$1.63 per share on the common stock, up significantly from C$4,525,000, or C4c per share, during 2006. Sales for the quarter were C$5,209,640,000 ($5,170,048,000), down 2% from C$5,324,756,000 during the previous year.

"The global food industry has been impacted by the ripple effect of an unprecedented rise in commodity grain costs over the past year," said Michael H. McCain, president and chief executive officer. "Our steady performance in 2007 reflects our efforts to manage this impact through reducing costs and raising prices. While we are well positioned to offset a continued rise in input costs over time, heading into 2008 we may face some short-term volatility depending on the precise timing of matching price action with cost increases given the magnitude of the changes. However, we are making excellent progress in implementing structural changes in our protein operations that will substantially increase profitability and reduce currency and commodity exposure for the long term. This includes the recent sale of our Ontario and Alberta hog operations that will significantly reduce our losses in this business."

The Meat Products Group posted earnings from operations of C$90,193,000 during the year, up 21% from C$74,400,000 during 2006. Sales for the segment were C$3,458,055,000, down 8% from C$3,745,654,000 during the previous year.

The Agribusiness Group sustained a loss from operations of C$7,841,000, which compared with a loss of C$2,475,000 during the previous year. Sales for the group were C$240,956,000, down 2% from C$245,438,000 during the previous year.

The Bakery Products Group posted earnings from operations of C$116,704,000, up 16% from C$100,877,000 in 2006. Sales for the group were C$1,510,629,000, up 13% compared with C$1,333,664,000 during 2006.

Despite an increase in overall earnings for the year, the company posted a fourth-quarter loss of C$22,072,000 ($21,897,442), which compared with a loss of C$11,624,000 during the same quarter of the previous year. Sales for the quarter were C$1,273,633,000 ($1,263,560,000), down 6% from C$1,361,361,000 during the same quarter of 2006.

Maple Leaf said while price increases and acquisitions have generated higher sales, total sales are lower as a result of the sale or exit of non-core businesses and a stronger Canadian dollar. The company had a restructuring charge of C$71.9 million in the fourth quarter and C$122.3 million for the year. In July, the company completed its sale of it animal nutrition business to Nutreco Holding BV.

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