Saputo: Financial Results for the Second Quarter of FY 2009

Montreal / CA. (si) Canadian Saputo Inc. released its financial results for the second quarter of fiscal 2009, which ended September 30, 2008. On the one hand North American media are talking about higher profits and according to some gazettes Chief executive Lino Saputo Jr. called the results «satisfactory». On the other hand analysts surveyed by Bloomberg had expected more, projecting an average of 38 Cents (we assume Canadian Cents – 0,38 CAD, not USD). Now the results, published by Saputo:

Net earnings

Net earnings for the quarter totalled 69,0 million CAD (0,34 CAD basic per share), an increase of 6,5 million CAD compared to 62,5 million CAD (0,31 CAD basic per share) for the same quarter last fiscal year. Included in the results of the same quarter last fiscal year is an income tax charge of approximately 3,0 million CAD due to a reduction of future income tax assets recorded in previous fiscal years.

Consolidated revenues

Consolidated revenues for the quarter ended September 30, 2008 amounted to 1,454 billion CAD, an increase of 165,0 million CAD or 12,8 percent in comparison to 1,289 billion for the corresponding quarter last fiscal year. The increase is due mainly to our USA Dairy Products Sector, whose revenues increased by approximately 99 million CAD. The inclusion of the activities of Alto Dairy Cooperative acquired on April 01st, 2008 (Alto Acquisition), partially offset by a lower average block1 market per pound of cheese and a less favourable by-product market, explains the revenue increase as compared to the same period last fiscal year. Revenues from the Canada, Europe and Argentina (CEA) Dairy Products Sector increased by approximately 67 million CAD. Higher selling prices in accordance with the increase in the cost of milk as raw material in Canada and in Argentina, and increased sales volume from Saputo´s Dairy Products Division (Argentina) are the main factors explaining the revenue increase. Revenues from our Grocery Products Sector decreased by approximately one million CAD in comparison to the same quarter last fiscal year.

Consolidated EBITDA

Consolidated EBITDA amounted to 129,9 million CAD, an increase of 5,8 million CAD or 4,7 percent in comparison to 124,1 million CAD for the same quarter last fiscal year. The increase results from higher EBITDA in Saputo´s CEA Dairy Products Sector of approximately 10,2 million CAD. The EBITDA of Saputo´s USA Dairy Products Sector decreased by approximately 3,0 million CAD and the EBITDA of our Grocery Products Sector decreased by approximately 1,4 million CAD compared to same quarter last fiscal year.

Earnings before interest, taxes, depreciation and amortization

EBITDA for the CEA Dairy Products Sector amounted to 94,8 million CAD, an increase of 12,1 percent in comparison to the same quarter last fiscal year. This increase was mainly due to the increase in volumes in Saputo´s Argentinean domestic and export markets and the continued benefits derived from rationalization activities completed in prior years in the group´s Canadian operations. These positive factors were partially offset by less favourable by-product market conditions.

EBITDA for the USA Dairy Products Sector totalled 31,1 million CAD, a decrease of 8,8 percent compared to the same period last fiscal year. A less favourable by-product market and increased operational costs are the main factors contributing to this decrease, partially offset by the contribution of the Alto Acquisition and a more favourable relationship between the average block market per pound of cheese and the cost of milk as raw material.

EBITDA for the Grocery Products Sector amounted to 4,0 million CAD, a decrease of 25,9 percent compared to the corresponding quarter last fiscal year. This is as a result of a decrease in sales volume and increased costs, which offset the benefits of the price increase that took effect in mid-November 2007.

Cash generated by operating activities

Cash generated by operating activities amounted to 111,3 million CAD, compared to 81,7 million CAD for the same period last fiscal year. In the second quarter, the Company issued shares for a cash consideration of 4,6 million CAD, as part of the stock option plan and repaid 52,6 million CAD of bank loans and paid 53,7 million CAD in dividends.

About: Together, over the years, Canadian Saputo Inc. has aspired to grow, exploring new opportunities while staying true to its culture. The group´s progress is owed to the continued dedication of its 9’200 employees, who, across five countries, team up every day to go further. They craft, market and distribute a wide range of high-quality products, including cheese, milk, yogurt, dairy ingredients and snack-cakes. Saputo is the 15th largest dairy processor in the world, the largest in Canada, the third largest in Argentina, among the top three cheese producers in the United States, and the largest snack-cake manufacturer in Canada. Consumers and customers in over 40 countries appreciate Saputo´s products distributed under well-known brands.

Saputo Bakery: In addition to diary products, the snack cakes, snack bars, cookies and tarts from Saputo´s Grocery Products Sector are known right across Canada. For detailed information, please visit «Hop+Go!», «Vachon», «Igor», «Rondeau».