Maple Leaf posted a net loss $26.7 million, or 19 cents per share, from continuing operations for the third quarter ended Sept. 30. This compares to a loss of $24.5 million, or 18 cents per share, in the year-ago quarter. This included $14.3 million of pre-tax expenses related to restructuring and other related costs, the company said.
"We continue to make important advances towards our strategic goals," said Michael McCain, president and CEO. "We have benefited from improved margins during a period of unprecedented volatility and high costs in the raw materials market. We are managing the related impact on demand and see the volume decline as short term. While the ongoing cost of duplicate supply chains and start-ups continues to be material, we are achieving milestones every quarter. Product transfers into the new Heritage facility in Hamilton continue, facilitating one more plant closure in the quarter. Once fully commissioned, our Heritage plant will be one of the most advanced, efficient facilities of its type in North America."
Sales in the company's Meat Products Group increased to $814.7 million. The company attributed the gain to higher values for fresh pork and price increases in the prepared meats business during the second quarter in response to higher costs for raw materials.
"As expected, the business is experiencing a period of lower demand and volume in response to this pricing action," the company noted. "This is being actively managed and volumes are expected to recover in the next one to two quarters."
Transitional costs of $25.2 million impacted the company's prepared meats business. Maple Leaf attributed the costs to commissioning activities and duplicative costs at its new prepared meats plant in Hamilton, Ontario. The Hamilton facility is the largest in the company's network. The company ended production at its plant in Moncton, leaving three remaining plants to close to complete its supply chain transformation.
The company's Agribusiness Group, which includes Canadian hog production operations, reported sales declined to $5.4 million compared to $6.3 million in the comparable year-ago period, due to lower pricing on toll feed sales.