A strong fourth quarter didn’t save Maple Leaf Foods Inc. from posting poor year-end financial results.
Part of the reason was reduced sales and special charges related to the strike that affected the company for several months in 1997 and early 1998.
The company announced last week that earnings before interest, taxes, depreciation, amortization and unusual items declined to $103.4 million from $117.4 million last year.
After the special costs of $82.9 million and other deductions, the company posted a net loss of $23.26 million compared to a net profit of $46.9 million last year.
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Sales were down in all three of the company’s groups. Total sales were $3.28 billion compared to $3.68 billion last year.
“The most significant factors contributing to the year-over-year declines in sales and earnings, before unusual items, were the labor dispute, difficulties experienced in the bakery products group and low commodity prices,” the company said in a news release.
“Excellent progress continued to be made in recapturing prepared meats volume following the labor dispute. An aggressive schedule for new product launches and marketing initiatives has been developed for 1999.”
The meat products group had sales of $2 billion, down 15 percent from $2.3 billion in 1997.
Operating earnings for the group, before unusual items, increased to $29.7 million, compared to $8.2 million last year.
The bakery products group reported sales for the year of $663 million, which was $5 million less than in 1997. Operating earnings, before unusual items, were $20.5 million, down 54 percent from 1997.
The main problems are lower fresh bread sales volume in Western Canada, reduced gross margins in Atlantic Canada, and lower earnings from the company’s 25 percent interest in Multi-Marques. In the fourth quarter, an agreement was reached to supply bakery products to A & P and affiliated grocery stores in Ontario, beginning in February.
The agribusiness group had sales of $653 million compared to $705 million for 1997. Operating earnings, before unusual items, for the full year of $53.2 million, were down 18 percent from 1997 due to low hog prices.
