Mixed fortunes for Saputo as annual results are released

By Jim Cornall contact

- Last updated on GMT

US revenue grew for Saputo, however Canadian and international revenue both declined.
US revenue grew for Saputo, however Canadian and international revenue both declined.

Related tags: United states dollar, Milk

Canadian dairy company Saputo has issued its financial statements for the year ending March 31, 2016.

Its Canadian revenue dropped from C$3.84bn ($2.97bn) in 2015 to C$3.8bn ($2.93bn) in 2016, while US revenue grew over the same period from C$5.28bn ($4.08bn) to $5.79bn ($4.47bn).

International revenue declined from C$1.54bn ($1.19bn) to C$1.4bn ($1.08bn).

Adjusted EBITDA rose 2.2% for Canada, 35.6% for the US, and declined by 71% for international.

Net earnings dropped from C$612.9m ($473.4m) to C$601.4m ($464.5m).

Cheese and butter down, whey up

For cheese prices, the price per pound fell in the fourth quarter to $1.479, its lowest point in 2015 or 2016, and down from the $1.582 price in Q3. At its peak in Q1 of 2015, it stood at $2.161.

Butter prices also dropped, to a two year low of $1.46 per pound. In Q3, the price was $1.508. Whey prices did, however, rise, from $0.226 per pound in the third quarter to $0.247 in Q4. This is a slight recovery on prices that had been falling from Q1 2015, when it stood at $0.660 per pound.

Fourth quarter results

Saputo said that sales volumes of cheese and cream categories were higher, while traditional milk and butter categories experienced a decrease.

Higher sales volumes in both US divisions, as well as the inclusion of the Woolwich acquisition, increased revenues, Saputo said.

The statements said that the fluctuation of the average block market per pound of cheese and the butter market in the fourth quarter of fiscal 2016, as compared to the corresponding quarter in the previous fiscal year, decreased revenues by approximately C$14m ($10.8m).

The weakening of the Canadian dollar versus the US dollar increased revenues by approximately C$148m ($114.3m).

The fluctuation of the Canadian dollar versus foreign currencies used in the international sector, however, negatively impacted revenues by approximately C$33m ($25.5m) compared to the same quarter last fiscal year. 

Outlook for 2017

In fiscal 2017, Saputo said it will continue benefiting from the Woolwich acquisition in North America and the EDC acquisition in Australia for future development.

Additionally, the company said, it will continue to improve its efficiencies, and invest in capital projects and identify opportunities.

Saputo said it will actively evaluate and pursue strategic acquisition opportunities, with the goal of expanding its presence in key markets.

Related topics: Dairy Health Check, Manufacturers

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