Saputo: Q3 profits fall nearly 30 percent

Montreal / CA. (si) Sales from new acquisitions boosted gross revenue for Saputo Inc. in its third fiscal quarter, but one-time costs and market conditions in some sectors bit into the Q3 profits for Canada’s largest dairy processor.

Montreal-based Saputo, the world´s 15th-largest dairy processing firm, posted net earnings of 57,76 million CAD on 1,52 billion CAD in revenues for its third quarter ending December 31, 2008, down from 82,02 million CAD on 1,28 billion CAD in the year-earlier period.

Offsetting the higher revenues was an inventory write-down of 12,9 million CAD due to a «strong decrease» in the block market per pound of cheese at the end of Q3, and depressed international selling prices. The average «block market» is the average daily price of a 40-pound block of cheddar on the Chicago Mercantile Exchange (CME), used as a base price for the cheese.

As well, Saputo had to eat closure costs for its manufacturing plant at Hinesburg, Vermont worth 7,4 million CAD, including 6,0 million CAD in «non-cash» costs. Plus, Saputo´s year-earlier Q3 had included a one-time tax reduction to adjust future tax balances of about 6,5 million CAD, due to reduced Canadian federal tax rates.

The company said its earnings before interest, taxes, depreciation and amortization (EBITDA) in its Canadian, European and Argentinean (CEA) dairy products sector was down about 9,3 percent due to «less favourable by product market conditions in the Canadian operations», offsetting a month´s worth of added revenues from its new Neilson Dairy operations.

EBITDA for Saputo´s U.S. dairy products sector was also off by 3,8 percent on the lower average block market per pound of cheese and lower selling prices on the whey market. Those lower sales were offset by 141 million CAD in new revenue from its Alto Dairy Co-operative acquisition.

Appointments in Senior Management

The company announces changes in its senior management team effective immediately. Claude Pinard, currently President and Chief Operating Officer of the Bakery Division, has been appointed as Executive Vice President, Corporate Communications and Social Responsibility. The position of President and Chief Operating Officer of the Bakery Division will be assumed by Lionel Ettedgui. Ettedgui was recently President and General Manager of a food company and has extensive experience in manufacturing operations and sales in the food industry, Saputo says in a statement.