Saputo profit falls on inventory writedown, tough markets
(Reuters) - Canadian dairy products maker Saputo Inc's (SAP.TO: Quote) first-quarter profit fell 4 percent on challenging conditions in most of its markets and an inventory writedown in Argentina.
Average block market per pound of cheese fell by 20 cents in the United States in the quarter.
Average block market is the average daily price of a 40 pound block of cheddar traded on the Chicago Mercantile Exchange, used as the base price for cheese.
In Europe, the company is finding it tough to obtain milk at prices competitive with the selling price of cheese, it said.
Saputo -- whose competitors include Dean Foods Co (DF.N: Quote) and Kraft Foods Inc KFT.O -- makes and distributes milk, cheese and some baked goods from nearly 50 plants in North America, South America and Europe.
Saputo, Agropur and Parmalat SpA (PLT.MI: Quote) are the biggest dairy processors in Canada, which has about 13,200 dairy farms.
Net earnings for Saputo fell to C$121.8 million, or 60 Canadian cents per share, for the April-June quarter, from C$126.6 million, or 61 Canadian cents per share, a year earlier.
Inventory at the company's Argentina division was written down by C$2.5 million ($2.5 million) due to a selling price fall in the export market at the end of the quarter.
Revenue for the company rose 4 percent to C$1.70 billion.
Shares of the Montreal-based company, which has a market value of C$8.73 billion, were down 1 percent at C$43.62 in late-morning trading on the Toronto Stock Exchange.
(Reporting by Shounak Dasgupta in Bangalore and Allison Martell in Toronto; Editing by Ted Kerr, Supriya Kurane, Maju Samuel)
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