MISSISSAUGA, ONTARIO — Maple Leaf Foods Inc.’s first quarter financial results for the 2024 fiscal year reflected a short-term decline in sales as the company reduced outside purchases in poultry and pork to set itself up for future growth. Continuing into 2024, Maple Leaf expects low-to-mid single-digit revenue growth.

For the period ended March 31, 2024, the company reported a net income gain of C$51.6 million ($37.72 million), equal to C42¢ (31¢) per share on the common stock and up from a loss of C$57.7 million, or C48¢ per share during the same period last year. Net earnings were boosted by reduced feed costs, operating efficiencies, lower start-up expenses, reduced restructuring costs and a positive impact of unrealized mark to market valuation on biological assets.

Total quarterly sales dipped to C$1.15 billion ($840 million), down 1.5% from C$1.17 billion during the first quarter of fiscal 2023. Adjusted operating earnings increased to C$53 million ($38.74 million) compared to C$19.3 million over the same period in 2023.

“In the first quarter of 2024, we delivered Adjusted EBITDA of $116 million, 55% higher than the same period last year,” said Curtis Frank, president and chief executive officer of Maple Leaf Foods. “With sales growth within our prepared meats portfolio, and a sequential improvement in our meat protein Adjusted EBITDA margin to 10.8%, and a 310 basis point improvement over last year, we took a meaningful step forward toward delivering our full business potential.”

Earlier this year, Maple Leaf announced an update to its strategic blueprint that reflects the progress and plans it has made toward achieving its company goals. As part of its strategy, Maple Leaf combined its Meat and Plant Protein businesses.

As a consolidated protein company, Maple Leaf has two operating units: Prepared Foods (prepared meats, plant protein and poultry) and Pork, which represent an average of 75% and 25% total company revenue on average, respectively.

While Maple Leaf previously set an Adjusted EBITDA margin target of 14% to 16% solely for meat protein, in the first quarter, it achieved an Adjusted EBITDA margin for meat protein of 10.8%.

Sales in the Prepared Foods operating unit decreased by about 0.4%, with prepared meats increasing 2.9% offset by declines in plant protein and poultry of 5.7% and 7.1%, respectively, compared to last year. Sales in the Pork operating unit decreased by 4.5% year-over-year.

Volume and mix drove the increase in sales in prepared meats, while decreases in volume in fresh poultry were most impacted by reduced sales to industrial channels. Meanwhile, Pork experienced a reduction in hog purchases for processing and a negative foreign exchange impact.

Maple Leaf noted that there are no construction capital projects as of March 31, as all projects have been completed and have been recategorized as regular property and equipment.

“Looking ahead, we expect the momentum in our business to continue to accelerate,” Frank said.
 “Pork headwinds, while still a challenge, are easing, and our attention is squarely on executing our refreshed Strategic Blueprint. With a powerful platform of brands, a network of world-class assets and our leadership in sustainability, we have the right strategy and team in place to drive growth in Canada, accelerate our reach in the US and fully realize the benefits of our recent capital investments.”