Canada Bread profit climbs on strength in fresh bakery

by Eric Schroeder
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TORONTO — Net earnings at Canada Bread Co., Ltd. in the second quarter ended June 30 were C$22,537,000 ($20,754,000), equal to C$0.89 per share on the common stock. This compared with income of C$6,538,000, or C$0.26 per share, in the second quarter of fiscal 2008.

Earnings from operations before restructuring and other related costs were C$33,141,000 ($30,529,000), up sharply from C$12,398,000.

"We are very pleased with the earnings growth we achieved in the second quarter," said Richard Lan, president and chief executive officer. "With margins improved after the commodity price hyperinflation of last year, we are now focused on accelerating our growth through new product innovation, targeting expansion in new high growth categories and pursuing improvements that will bring increased efficiency through the supply chain."

Sales for the second quarter fell narrowly to C$435,918,000 ($401,993,000) from C$437,418,000 for the prior year period. The decline reflected a moderate change in mix from specialty to staple products and lower volumes in the United States and the United Kingdom.

The Fresh Bakery segment’s sales grew 1% to C$290,258,000 ($267,428,000) while earnings from operations were C$25,379,000 ($23,382,000), up 104% from C$12,457,000 in the second quarter last year.

Frozen Bakery sales fell to C$145,660,000 ($134,200,000) from C$149,780,000, while earnings from operations climbed to C$7,762,000 ($7,151,000) after a loss of C$59,000 in the second quarter of fiscal 2008.

For the six months ended June 30, Canada Bread posted net earnings of C$37,419,000 ($34,474,000), or C$1.47 per share, up from $18,749,000, or C$0.74 per share, in the same period a year ago. Net sales were C$849,043,000 ($782,384,000), up 4% from C$820,287,000.

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