TORONTO – For the second quarter ended June 30, Maple Leaf Foods Inc.’s net earnings increased to $24.6 million from $4.9 million. But sales decreased 3 percent to $1,238.2 million compared to $1,271.4 million last year, primarily due to business divestitures.

Second-quarter sales for the company’s Meat Products Group decreased 7 percent to $762.2 million from $815.7 million in the second quarter last year, primarily due to selling the company's Burlington, Ontario primary pork processing operation in November 2010. After adjusting for the impact of this divestiture and the impact of a stronger Canadian dollar that reduced the sales value of exports, sales increased by 3 percent compared to last year.

Higher market prices in fresh pork, combined with price increases and higher value sales mix in the prepared meats business, contributed to stronger sales. These benefits were partly offset by lower sales volumes, primarily in prepared meats, due to lower export and retail sales volumes.

Prepared meats margins strengthened as price increases offset the impact of rising input costs, although the business experienced some volume decline. Margins also benefited from operational improvements and the contribution of higher-margin products, such as the Natural Selections and the newly launched Schneiders Country Naturals sliced -meat lines.

As a result of strong export sales and improved product mix and operating efficiencies, primary pork processing margins increased. Earnings from poultry processing operations, however, declined compared to those of last year due to higher live birds costs that compressed industry-wide poultry processor margins.

During the quarter, the company sold a prepared-meats facility in Berwick, Nova Scotia, and consolidated production into other existing plants. The company also announced the scheduled closure of a prepared-meats plant in Surrey, British Columbia, in the second half of 2011 and began transferring production to other facilities in June.

Sales in the Agribusiness Group, which consists of Canadian hog production and animal by-product recycling operations, increased 31 percent during the second quarter to $70.9 million from $54.1 million last year primarily reflecting higher sales values in the by-products recycling business.

Driven by higher prices for by-products and hogs, adjusted operating earnings in the Agribusiness Group increased by 140 percent to $32.7 million compared to $13.6 million last year. Earnings in the by-products recycling business increased due to higher market prices in both rendering and bio-diesel operations. Hog prices also increased 15 percent since last year and outpaced increases in the company's net cost of grain.

On July 27, Maple Leaf Foods Inc. declared a dividend of $0.04 per share payable on Sept. 30 to shareholders of record at the close of business on Sept. 9.