Maple Leaf Foods Inc. reported a third-quarter loss of C$12.9 million ($10.6 million) largely due to the financial impact of a recall of listeria-tainted meat in August of this year.
The costs associated with the meat recall by the company’s meat products group negated improved results in its agribusiness, protein and bakery groups.
“The headline for the third quarter was managing the unprecedented recall at our Toronto packaged meats plant and doing what was right to protect consumers and maintain public trust,” said Michael McCain, president and CEO. “While the recall is complete, our actions had a very substantial near-term impact. In other areas of our business, results improved considerably and as expected we are starting to see material benefits from the restructuring of our protein operations. Our focus through the remainder of 2008 will be on stabilizing our business and continuing to restore confidence, including implementing an enhanced food safety program that will be among the best in North America.”
Maple Leaf’s meat products operations include value-added processed packaged meats; chilled meal entrees and lunch kits; value-added pork, poultry and turkey products; and global meat sales.
The decline in earnings was principally a result of lower sales and higher supply chain costs related to the product recall, which the company estimates impacted adjusted operating earnings by approximately $14 million in the quarter.These negative impacts outweighed the contribution of higher earnings in the primary pork processing business due to improved pork processing margins and benefits from consolidating primary pork operations in Western Canada and expanding the Brandon facility.