Maple Leaf Foods posts seventh straight quarterly loss
However, losses have been halved as company nears end of plan to replace outdated plants
Canadian meat and poultry processor Maple Leaf Foods reported its seventh consecutive quarterly loss on February 26, although the loss was not as dramatic as it had been during previous quarters.
The fourth-quarter net loss from continuing operations narrowed to CA$23 million (US$18.45 million), from CA$47.9 million (US$39.6 million) a year ago. The adjusted loss was CA$13.7 million (US$11 million) versus CA$56 million (US$45.1 million) a year earlier.
The losses have come as a result of a transformation of plants for the company, as it has been closing outdated plants and rebuilding more modern ones. Maple Leaf, one of Canada's biggest processors, is nearing the end of the multiyear rebuilding program as it seeks to boost profits and better compete with U.S. rivals. In the short term, the CA$710 million (US$571.9 million) plan hinders Maple Leaf with duplicate overhead costs and start-up expenses.
With much of the network transition process completed, Maple Leaf Foods President and CEO Michael H. McCain expects further financial improvement in coming quarters."2014 was a pivotal year for Maple Leaf Foods. Our seven year journey of investment and development, headlined by the rebuilding of our supply network, is nearing its end," said McCain. "We have completed what we set out to accomplish in 2007 and finished the year with new momentum. We will be closing our largest legacy plant in Kitchener [Ontario] this week, leaving only one remaining facility in Toronto to close. Our margins have been structurally reset over the year, and while volume continued to be weak in the fourth quarter, we expect it to recover in 2015 as the fundamental environment continues to improve. We are confident that we will deliver our strategic targets in 2015."