Saputo net profits beat expectations in second-quarter at $174.9 million

MONTREAL – Saputo Inc.’s quarterly profit beat analyst expectations, as the company continued to face some challenges in the industry.

“I’m pleased to see we’re making great progress despite facing persistent headwinds,” said CEO Lino Saputo during a conference call with analysts Thursday after the company released its second-quarter financial results.

The Montreal-based dairy processor’s net earnings totalled $174.9 million or 44 cents per share for the quarter ended Sept. 30. That’s up from $163.1 million or 42 cents per share in the same quarter the previous year.

Adjusted profits climbed 14 per cent to $185.8 million or 47 cents per share, compared with $163.1 million or 42 cents per share in the second quarter of 2018.

Saputo was expected on average to earn 43 cents per share in adjusted profits on $3.82 billion in revenues, according to financial markets data firm Refinitiv.

Revenue rose to $3.67 billion from $3.42 billion — a jump of 7.2 per cent.

The rise came from many factors, including higher international selling prices for cheese and dairy ingredients, higher domestic selling prices in Canada, the company’s international sector, as well as lower warehousing and logistics costs, said the chief executive.

But lower sales volumes of fluid milk in Canada and reduced raw milk availability in Australia negatively impacted results, he said.

Irene Nattel of RBC Capital Markets said the company delivered solid results “reinforcing our thesis that the commodity cycle is stabilizing.”

“Having said that, market headwinds remain in several regions, and Saputo is actively taking steps to ‘control the controllables’ and offset these headwinds,” she wrote in a report.

On the Toronto Stock Exchange, Saputo’s shares gained $1.65 or 4.33 per cent at $39.78 in late afternoon trading.

This report by The Canadian Press was first published Nov. 7, 2019.

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