Maple Leaf Foods reports progress in Q2 results
Maple Leaf Foods Inc. reported its financial results for the second quarter, June 30, 2015. The company recorded sales from continuing operations of $820.8 million for the second quarter of 2015, a decrease of 1.3% from last year, or 2.6% after adjusting for the impact of foreign exchange. The decrease was primarily a result of lower selling prices due to lower market values within the Meat Products Group, partially offset by improved volume. Sales from continuing operations for the first six months was $1,601.0 million, an increase of 3.8%, or 2.5% after adjusting for the impact of foreign exchange, due to improved volume and a favorable sales mix, partially offset by lower selling prices due to lower market values within the Meat Products Group.
"We are very pleased with the progress we made in the second quarter," said Michael H. McCain, president and CEO. "We delivered improved volumes with strong commercial performance. We marked a major milestone with the closing of the last of our remaining legacy facilities, which brought an end to our duplicative supply chain, and continued to improve the operational efficiency of our new start-up plants. All of these factors contributed to a significant improvement in earnings, consecutive quarter-over-quarter growth in EBITDA margin, and positive free cash flow. Over the balance of the year, we have aggressive plans to build on our commercial momentum and a clear line of sight on how to capture the additional benefits from our new plants and deliver our 10% EBITDA margin target."
Adjusted Operating Earningsfor the second quarter increased to $21.8 million compared to a loss of $12.1 million last year. The Meat Products Group benefited from improved margins and reduced duplicative overhead in prepared meats and improved margins in fresh poultry, partially offset by lower margins in fresh pork. For the first six months, Adjusted Operating Earnings improved to $32.2 million compared to a loss of $42.0 million last year, due to factors similar to those noted above for the quarter and improved earnings in fresh pork.
Net loss from continuing operations for the second quarter was $7.5 million (loss of $0.05 per share(5)) compared to a loss of $39.5 million (loss of $0.28 per share) last year. This included $7.3 million ($0.04 per share) of restructuring and other related costs (2014: $20.0 million, or $0.11 per share). The improvement in the quarter was due primarily to similar factors as noted above, lower restructuring and other related costs and interest expenses. For the first six months, net loss from continuing operations was $10.3 million (loss of $0.07 per share) compared to a loss of $164.2 million (loss of $1.17 per share) last year. This included $18.1 million ($0.10 per share) of restructuring and other related costs (2014: $41.8 million, or $0.22 per share). The year-to-date decrease was primarily due to non-recurring financing costs that were incurred last year in relation to the repayment of the Company's outstanding debt, lower selling, general and administrative costs, and similar factors discussed above.
Sales in the Meat Products Group for the second quarter decreased 1.0% to $817.2 million, or 2.3% after adjusting for the weaker Canadian dollar. The decrease was a result of lower market prices in fresh pork partially offset by a favourable sales mix in fresh poultry, primarily driven by growth in branded poultry, and improved volume in prepared meats. The volume decline experienced in response to a price increase that was implemented in the second quarter of 2014 has now been largely restored.
Source: Maple Leaf Foods