(Adds share activity, dividend hike, background)
By Rod Nickel
Feb 26 (Reuters) - Canadian meat processor Maple Leaf Foods 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 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.
Analysts, on average, expected Maple Leaf, to earn about 1 Canadian cent a share on sales of about C$791 million, according to Thomson Reuters I/B/E/S.
Shares of Maple Leaf fell 2.3 percent to C$22.17 during morning Toronto trading, falling off a nearly 17-year high reached on Tuesday. ($1 = 1.2469 Canadian dollars) (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jeffrey Benkoe)