“We delivered excellent second quarter results with continued earnings growth,” said Michael H. McCain, president and CEO. “Strong performance in the fresh value-added pork portfolio contributed to earnings. Favorable market conditions were offset by margin compression in prepared meats due to rising raw material costs.”
The company plans to implement targeted pricing actions in the third quarter to offset these rising raw material costs.
The company’s product line includes value-added prepared meats, lunch kits and snacks, value-added fresh pork and poultry products and refrigerated plant protein products sold under national brands such as Maple Leaf, Maple Leaf Prime, Maple Leaf Natural Selections, Schneiders, Schneiders Country Naturals, Mina and Lightlife.
According to the company, increased volumes in prepared meats, value-added fresh pork and poultry paired with a full quarter of Lightlife sales contributed to the Q2 sales increase. Maple Leaf Foods completed its acquisition of Lightlife Foods, a manufacturer of refrigerated plant-based protein products in the United States in mid-March.
“Expanding into the fast growing alternative proteins market is one of Maple Leaf’s strategic growth platforms and advances our commitment to become a leader in sustainability,” McCain said in a statement at the time of the sale. “The acquisition of Lightlife provides Maple Leaf with a leading market position and brand in the United States in a category that is outpacing growth in the broader packaged foods sector. We are committed to growing the business through investment in brand building, innovation and leveraging our respective capabilities.”
Net earnings for the second quarter increased to $37.3 million ($0.29 per basic share) compared to $31.4 million ($0.23 per basic share) last year. For the first six months, net earnings were $67.4 million ($0.52 per basic share) compared to $73.7 million ($0.55 per basic share) in 2016.
Adjusted operating earnings increased in Q2 to $75.0 million compared to $60.5 million over the same period in 2016. Adjusted operating earnings in the first six months was $134.0 million compared to $114.0 million last year.
According to the company, “Commercial performance in value-added fresh pork, strong volume growth across the portfolio and favorable market conditions contributed to earnings growth in the quarter.”
Moving into the second half of the fiscal year, Maple Leaf has expectations for more growth. “Moving forward, we are focused on accelerating profitable growth, investing in our brands and building our leadership in sustainability,” McCain said. “We see a path to creating significant value for shareholders and to society by advancing our vision to be the most sustainable protein company on earth.”