UPDATE 1-Maple Leaf Foods posts loss on production revamp costs

Thu Feb 27, 2014 8:46am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* 4th-qtr loss from cont. ops C$0.13/shr vs profit C$0.27/shr

* Sales fall 2 pct to C$1.11 bln

* Restructuring and other related costs rise 19 pct

Feb 27 (Reuters) - Canadian food processor Maple Leaf Foods Inc, which has been replacing production facilities and setting up a new distribution system, reported a quarterly loss that it blamed on the "tremendous" costs of the restructuring.

Maple Leaf's multi-year program to revamp meat operations to boost profits and better compete with U.S. rivals such as Tyson Foods Inc is expected to end next year.

The company's margins on hog production have been weak for several years due to high feed costs.

"We are in a peak phase of executing our prepared meats network strategy, which added tremendous costs and inefficiency in the quarter as we ramped up five new facilities while continuing to operate our parallel older plants," Chief Executive Michael McCain said in a statement on Thursday.

McCain said the restructuring was causing "short-term earnings volatility." Weak protein markets also weighed on the company's results in the quarter ended Dec. 31, he said.

Maple Leaf's restructuring and other related costs jumped 19 percent to C$15.3 million ($13.8 million) in the quarter, while selling, general and administrative expenses rose 11 percent.   Continued...