(Reuters) — Maple Leaf Foods Inc. posted a rare profit in the third quarter as it nears the end of its restructuring plan.
The profit is only Maple Leaf’s second in the past 11 quarters but was slightly smaller than expected.
The company rolled out a program in 2010 to boost earnings by shutting some plants and modernizing others.
“We are making meaningful progress on eliminating inefficiencies driven by the ramp-up of our new facilities, though not at the pace we had hoped for,” said chief executive officer Michael McCain.
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Maple Leaf disappointed the market by delaying to 2016 its target of increasing earnings before interest, tax, depreciation and amortization as a percentage of revenue to 10 percent, Canaccord Genuity analyst Derek Dley said in a note.
The profitability measure amounted to 7.1 percent during the quarter, up from the previous quarter but below expectations, he said.
Restructuring costs fell 76 percent to $3.4 million in the third quarter.
Maple Leaf’s net sales fell slightly to $818.8 million from $820.1 million in the third quarter, hurt mainly by the agri-business group, which includes Canadian hog production operations.
Sales in the meat products unit, which includes products sold under brands such as Maple Leaf and Schneiders, fell marginally to $814.8 million in the quarter.
The company earned 16 cents per share on an adjusted basis.
Its net earnings were $18.7 million, or 13 cents per share, in the quarter ended Sept. 30, compared with net loss of $26.7 million, or 19 cents per share, a year earlier.
Analysts had, on average, expected Maple Leaf to earn 17 cents a share.
Meat processors around the world were rocked last week by a World Health Organization report that said eating processed meat could cause colorectal cancer in humans.
The Canadian Meat Council, which represents meat packers such as Maple Leaf and the Canadian units of Cargill Ltd. and JBS SA, rejected the findings as simplistic.
