Maple Leaf Foods Q1 loss deteriorates sharply to$14.8M; revenue down at $1.11B

TORONTO – Maple Leaf Foods Inc. (TSX:MFI) is reporting what its CEO Michael McCain calls a “very difficult” first quarter as its net loss widened to $14.8 million from just under $6 million a year ago.

Maple Leaf says the loss for the three months ended March 31 translated into 11 cents per diluted share compared with four cents in the prior-year period.

Sales fell to $1.11 billion from $1.16 billion in the 2012 quarter, a 4.1 per cent decrease year over year, or 2.3 per cent after adjusting for the impact of divestitures and foreign exchange as lower volumes were partly offset by higher prices.

“This was a very difficult quarter, with lower earnings in our protein business overshadowing good improvement in our bakery results,” McCain said in a statement accompanying the earnings report.

“For some time, we expected a volatile first half to 2013, but this certainly has been more severe than anticipated.”

McCain said the company’s meat business had demonstrated several years of steady improvement

“But this quarter experienced the aggregate impact of poor market conditions, weaker volumes in the wake of necessary price advances and transition costs related to our new network.”

McCain said that while the outcome is seen as challenging in the near term “we expect steady improvements through the remainder of the year as a result of improved markets, restoring stable volumes and continued success in our supply chain conversions.”

“Our strategic initiatives, which are the most material contributor to our margin expansion, are on track and contributing to results,” he added.

The net loss included $47.4 million or 25 cents per share of pre-tax expenses related to restructuring and other related costs, compared with $20.4 million, or 11 cents per share, in the year-earlier period.

Adjusted earnings per share declined 12 cents to a loss of six cents compared, reversing last’years adjusted EPS profit of six cents,