Canada Bread adjusted earnings rise 8% in quarter
TORONTO — A positive shift in the company’s North American frozen bakery business led to better earnings at Canada Bread Co., Ltd. in the third quarter of fiscal 2012. Adjusted operating earnings in the third quarter ended Sept. 30 totaled C$34,234,000 ($34,203,000), up 8% from C$31,763,000 in the same period a year ago.
Earnings from operations before restructuring and other related costs were C$34,051,000 ($34,026,000), which compared with C$30,451,000 in the same period a year ago. The third quarter of fiscal 2011 included C$1,598,000 in restructuring and other related costs, while the most recent quarter included C$170,000 of such costs.
Sales during the third quarter of fiscal 2012 fell to C$401,494,000 ($401,179,000) from C$417,171,000.
“Our earnings growth resulted from effective buying strategies and a strong positive shift in our North American frozen bakery business,” said Richard Lan, president and chief executive officer. “We have a number of commercial and marketing initiatives under way to support growth in each of our businesses, and we expect to manage inflationary costs through responsible pricing.”
Adjusted operating earnings within the Fresh Bakery segment during the third quarter of fiscal 2012 eased 1% to C$28,765,000 from C$29,198,000, while sales fell 4% to C$277,709,000 from C$287,923,000 in the third quarter of fiscal 2011.
“Improved earnings in the fresh bread business were offset by lower earnings in the fresh pasta business,” Canada Bread said. “Results benefited from positive hedging activities for raw materials during the quarter, although the business continues to experience inflationary costs and projected increases in flour and dairy costs that will require offsetting price increases. Volumes in the fresh bread business were consistent with the second quarter of 2012, but lower than last year, reflecting industry volume declines.”
Adjusted operating earnings in the Frozen Bakery segment during the third quarter of fiscal 2012 totaled C$5,469,000, up 113% from C$2,565,000 in the same period a year ago. Sales decreased 4% to C$123,785,000 from C$129,248,000.
“The North American frozen bakery business benefited from higher pricing and increased sales volumes compared to last year,” Canada Bread said. “In the U.K., earnings were consistent with last year as improvements from cost reduction strategies, including the closure of a bakery in the first quarter, were offset by lower volumes and costs of commissioning new croissant capacity.”
Overall adjusted operating earnings at Canada Bread in the nine months ended Sept. 30 were C$80,424,000, down 4% from C$83,590,000 in the same period a year ago. Sales for the nine months fell to C$1,176,599,000 from C$1,195,176,000.