CANADA, Mississauga, On. Maple Leaf Foods Inc reported its financial results for the second quarter, 30th June, 2018. "We anticipated a more challenging year in 2018, driven by temporarily volatile trading environments and our market launch of a comprehensive food renovation in the second quarter, which is largely how it has unfolded so far," said Michael H. McCain, President and CEO.
"During this time we have maintained our financial performance above strategic targets, a testament to the value-added strength and balance in our portfolio, we have had excellent underlying commercial and operating gains, and we are enthusiastic about the key initiatives which will create long term shareholder value."
Second quarter sales decreased 1.8% to $909.2 mill. and Adjusted Earnings per Share decreased 17.1% to $0.34 compared to the same quarter last year. Adjusted EBITDA Margin for the quarter was 10.1%, while Free Cash Flow increased to $22.9 mill.
For the six months ended 30th June, 2018, sales decreased 0.6% and Adjusted Earnings per Share decreased 13.5%. Adjusted EBITDA Margin was 10.1% while Free Cash Flow was approximately $19.6 mill.
Sales for the second quarter decreased 1.8% to $909.2 mill. or an increase of 1.1% after adjusting for IFRS15, foreign exchange and acquisitions. Sales growth in sustainable meats, expansion of plant protein in the US and pricing taken in the fall of 2017 was offset by decreased market values in pork and lower prepared meats volumes.
Sales for the first six months decreased 0.6% to $1,726.8 mill. or an increase of 1.7% after adjusting for IFRS15, foreign exchange and acquisitions. The decrease in sales is consistent with the factors noted above.
Net earnings for the second quarter decreased to $34.9 mill. ($0.28 per basic share) compared to $37.3 mill. ($0.29 per basic share) in the second quarter of 2017. Margin expansion in prepared meats and volume growth in plant protein were offset by investments to launch the food renovation in our major brands and lower market values in pork. Second quarter results were also impacted by the change in the fair value of biological assets, unrealized gains on derivative contracts and lower restructuring charges, which are excluded in calculating Adjusted Operating Earnings.
For the first six months, net earnings were $62.8 mill. ($0.50 per basic share) compared to $67.4 mill. ($0.52 per basic share) last year. The decrease in net earnings for year to date is consistent with the factors noted above.
Adjusted Operating Earnings decreased to $57.8 million compared to $75.0 mill. in the second quarter of 2017. Challenging market conditions in the pork complex and investments to launch food renovation of major brands more than offset lower input costs, positive sales mix and continued progress in supply chain efficiency.
Adjusted Operating Earnings in the first six months was $110.6 mill. compared to $134.0 mill. last year. The decrease in Adjusted Operating Earnings is consistent with the factors noted above.
Adjusted EBITDA Margin for the second quarter was 10.1% compared to 11.2% in the second quarter of 2017. For the first six months, Adjusted EBITDA Margin decreased to 10.1% from 11.0% consistent with the factors noted above.