Net earnings drop as Saputo reports first quarter results
The company said its adjusted EBITDA was C$290m (US$230.6m), down by 21%. Revenues of C$3.488bn (US$2.78bn) were up 2.9%.
Net earnings of C$53m (US$42.2m) were down from C$142m (US$112.9m), a 62.7% drop.
Adjusted net earnings excluding amortization of intangible assets related to business acquisitions totaled C$122m (US$97m), down from C$179m (US$142.3m).
“No doubt, the first quarter of FY22 was tough as the disruptive effects of the pandemic continued to impact our performance, with ongoing shifts in consumer demand, inflation, dairy commodity volatility, heightened competition, and supply chain obstacles weighing down our bottom line,” said Lino A. Saputo, chair of the board and CEO.
“Despite these challenges, we remain optimistic that the mitigating measures we’re putting in place and the first wave of initiatives we’re deploying under our Global Strategic Plan will enable us to deliver organic Adjusted EBITDA growth this fiscal year, as we seek to reach C$2.125bn (US$1.7bn) by the end of FY25. We’re moving forward with responsible pricing initiatives, and we’re keenly focused on diversifying our business and increasing the profitability of our product offering, supported by our three recent acquisitions in dairy alternative cheese, value-added ingredients, and specialty cheese.
“Our priorities remain anchored in our three-pronged approach, combining accelerated organic growth through our Global Strategic Plan (FY22-FY25), accretive acquisitions, and the creation of shared value through our Saputo Promise. While we’ve only just embarked on our four-year journey, in the first quarter we made good progress under each pillar of our plan, laying the groundwork for future success. We’re confident in our ability to generate organic Adjusted EBITDA growth each year of our plan, with a more significant lift in the back half once our network optimization and enhancement efforts yield expected higher margins. Each step, each initiative, brings us one step closer to achieving our plan ambitions.”
The company said with the acquisition of Scottish plant-based cheese alternative producer Bute Island, the company now has in-house manufacturing capabilities to produce its mozzarella alternative product for the foodservice market, as well as inheriting dairy alternative cheese knowledge and the vegan Sheese brand.
Saputo said it also made strides in integrating the Reedsburg facility, as the company evaluates its ingredients portfolio and develops specialized whey products to bring to market.
It added the execution of its US cheese network optimization plan has begun, and the initial phase and the related capital expenditures are progressing.
The rollout of the global Enterprise Resource Planning (ERP) project within the remainder of the Dairy Division (Australia) and the subsequent phases of the implementation within the Dairy Division (USA) are expected to be completed by the end of fiscal 2022, with current deployments progressing as planned and on schedule.
