Reuters — Meat processor Maple Leaf Foods reported a smaller, but still disappointing, quarterly loss on Thursday, as it worked through a plan to close older packing plants.
Even so, the company will double its quarterly dividend to eight cents. CEO Michael McCain said the move reflected confidence in the business outlook.
Maple Leaf, one of Canada’s biggest pork processors, is nearing the end of a multiyear program to replace old meat plants with modernized facilities as it seeks to boost profits and better compete with U.S. rivals. In the short term, the $710 million plan saddles Maple Leaf with duplicate overhead costs and start-up expenses.
McCain said the company will close a large plant in Kitchener, Ont. this week, leaving only one plant in Toronto left to shut.
Maple Leaf has also shed assets as it focuses on meat, selling its bakery, Canada Bread, to Mexico’s Grupo Bimbo last year for $1.83 billion in cash.
The fourth-quarter net loss from continuing operations narrowed to $23 million (16 cents per share) from $47.9 million (34 cents per share) a year ago.
The adjusted loss was $13.7 million (eight cents per share) versus $56 million (41 cents) a year earlier.
Revenue for the company, whose brands include Schneiders, Mina and Mitchell’s, rose six per cent to C$794 million due to higher prices.
Analysts, on average, expected Maple Leaf, to earn about one cent a share on sales of about $791 million, according to Thomson Reuters I/B/E/S.
Shares of Maple Leaf fell 2.3 per cent to C$22.17 during morning Toronto trading, falling off a nearly 17-year high reached on Tuesday.
— Rod Nickel is a Reuters correspondent based in Winnipeg.