Canada Bread earnings drop in year

by Jeff Gelski
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TORONTO – While earnings fell for Canada Bread Co. Ltd. in fiscal year 2010, the company in 2011 will manage commodity inflation through price increases.

Net earnings for the year ended Dec. 31 were C$61 million ($62 million), or C$2.40 per share, which compared with C$77.5 million ($79 million), or C$3.05 per share in the previous year that had an additional week in the fourth quarter. Net sales for the year were C$1,588 million, down from C$1,706 million in the previous fiscal year.

Within the fresh bakery segment, adjusted operating earnings for fiscal year 2010 were C$99.2 million, up from C$91.5 million in 2009. Fresh bakery segment sales in the fiscal year decreased to C$1,087 million from C$1,120 million in the previous fiscal year.

Within the frozen bakery segment, adjusted operating earnings for fiscal year 2010 were C$11.3 million, down from C$29 million in the previous fiscal year. Frozen bakery segment sales in the fiscal year decreased to C$502 million from C$586 million.

Canada Bread dealt with a rise in wheat prices late in the fourth quarter of 2010 that has continued into 2011. In the fourth quarter of 2011, Canada Bread’s net earnings decreased to C$13.6 million, or C$0.54 per share, from C$15 million, or C$0.59 per share, in the previous year’s fourth quarter. Its fourth-quarter sales declined 9% to C$393.1 million from C$432.2 million, mostly as a result of an additional week in the previous year’s fourth quarter.

“While we had a modest decline in operating earnings in the (fourth) quarter, a number of initiatives are under way to reduce costs and strengthen volumes,” said Richard Lan, president and chief executive officer, when the Toronto-based company gave financial results Feb. 24. “We are consolidating manufacturing facilities, reducing overhead costs and increasing our marketing and sales activities, all with good results. We will also manage significant commodity inflation through price increases.”

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