Maple Leaf Foods reduces fourth-quarter loss, hikes dividend

Thu Feb 26, 2015 9:57am EST
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By Rod Nickel

(Reuters) - Canadian meat processor Maple Leaf Foods (MFI.TO: Quote) reported a smaller, but still disappointing, quarterly loss on Thursday, as it worked through a plan to close older packing plants.

Even so, the company will double its quarterly dividend to 8 Canadian cents. Chief Executive Officer Michael McCain said the move reflected confidence in the business outlook.

Maple Leaf, one of Canada's biggest pork processors, is nearing the end of a multiyear program to replace old meat plants with modernized facilities as it seeks to boost profits and better compete with U.S. rivals. In the short term, the C$710-million plan saddles Maple Leaf with duplicate overhead costs and start-up expenses.

McCain said the company will close a large plant in Kitchener, Ontario, this week, leaving only one plant in Toronto left to shut.

Maple Leaf has also shed assets as it focuses on meat, selling its bakery, Canada Bread Co, to Mexico's Grupo Bimbo (BIMBOA.MX: Quote) last year for C$1.83 billion in cash.

The fourth-quarter net loss from continuing operations narrowed to C$23 million ($18.45 million), or 16 Canadian cents per share, from C$47.9 million, or 34 Canadian cents, a year ago.

The adjusted loss was C$13.7 million, or 8 Canadian cents per share, versus C$56 million, or 41 Canadian cents, a year earlier.

Revenue for the company, whose brands include Schneiders meat, rose 6 percent to C$794 million due to higher prices.   Continued...

Maple Leaf Foods Inc. President and Chief Executive Officer Michael McCain listens during the annual general meeting of shareholders in Toronto April 29, 2010. REUTERS/Mike Cassese