Saputo earnings ease on bakery unit writedown

by Eric Schroeder
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MONTREAL — A C$125 million writedown related to the company’s struggling bakery division led to a fourth-quarter loss and lower year-over-year earnings at Saputo, Inc. Net earnings in the year ended March 31 totaled C$380,840,000 ($366,911,000), equal to C$1.89 per share on the common stock, down 15% from C$450,051,000, or C$2.18 per share, in fiscal 2011. EBITDA, meanwhile, rose 5% to C$830,931,000 ($800,537,000), up from C$788,281,000.

Sales for the year were C$6,930,370,000 ($6,676,699,000), up 15% from C$6,002,932,000 during fiscal 2011.

EBITDA in the company’s Grocery Products segment in fiscal 2012 inched up narrowly to C$12.7 million ($12.2 million) from C$12.6 million. Sales fell 5% to C$134 million from C$141.3 million.

Saputo said the C$125 million writedown reflects stagnating market growth for snack cake sales, including the company’s Jos. Louis, May West, Passion Flake and Ah Caramel brands.

EBITDA in the company’s Canadian, European and Argentine dairy products sector increased 4% to C$514.8 million compared with fiscal year 2011. EBITDA for the U.S. dairy products sector increased 8% to C$303.4 million.

Looking ahead to fiscal 2013, Saputo said it will continue to focus on increasing sales volumes in the snack cake and frozen categories, with the main focus on developing sales in the U.S. market. The company said it also will spend fiscal 2013 evaluating opportunities from the DCI Acquisition as it relates to the USA Dairy Products sector.

“This will allow the sector to further penetrate the specialty cheese category, benefit from possible synergies, as well as improve and expand its product offering to all customers,” Saputo said. “The sector will also continue to evaluate opportunities to improve its manufacturing and distribution efficiencies across the U.S.”

During the fourth quarter of fiscal 2012, Saputo suffered a loss of C$2,577,000 ($2,483,000), which compared with earnings of C$100,423,000, or C$0.49 per share, in the same period a year ago. EBITDA in the fourth quarter was C$200,955,000 ($193,587,000), up from C$194,490,000. Sales for the quarter were C$1,703,502,000 ($1,641,045,000) compared with C$1,481,255,000 during fiscal 2011.

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