Despite pandemic, Maple Leaf Foods sees solid 3Q results

By Chris Scott on 10/27/2020

Canadian processor Maple Leaf Foods Inc. reported sales growth of 6.2% in the third quarter of fiscal 2020 — and a nearly 400% climb in net income — driven by increases in meat protein and plant protein divisional revenues.

The Mississauga, Ont.-based company said total sales reached $1.06 billion in the period versus $996 million one year ago, while net income totaled $66 million, more than four times the $13.4 million reported in the third quarter of 2019. Maple Leaf cited increased retail channel demand in North America for sales gains that more than offset lower volumes for foodservice related to COVID-19 closures. Meat protein sales also benefited from strong growth in sustainable meats, exports to Asian markets and  positive foreign currency trends.

Maple Leaf also noted that net earnings of 54 cents a share versus 11 cents one year ago stemmed from strong commercial meat protein performance and strategic investments in the plant protein operation. A favorable resolution of an income tax audit last year and higher gains from non-cash fair value changes in biological assets and derivative contracts also contributed to higher net income in the latest period.

The company said the overall performance in the quarter more than offset costs related to COVID-19 mitigation. Still, Maple Leaf warned that the impact of the COVID-19 pandemic has been “significant,” adding to operational costs and the potential for future short-term processing shutdowns to protect the health and safety of plant personnel. Gross incremental costs related to the pandemic reached about $15 million in the third quarter, down slightly from the $19 million in similar costs in the previous quarter. 

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