Canadian food processor Maple Leaf Foods reported a 24 per cent drop in quarterly profit Oct. 31, after the company took a $13-million charge in the value of its hogs.
Net earnings for the third quarter ended Sept. 30 fell to $32.6 million, or 22 cents per share, from $43 million, or 29 cents, a year ago.
Adjusted for one-time charges including the decrease in the value of its hogs, adjusted operating earnings were up four per cent to $76.3 million.
Grain prices soared this summer due to a severe U.S. drought, which drove up the cost of raising hogs as well as baking for Maple Leaf Foods, one of Canada’s biggest bakers.
Given that the hog industry’s problems are well known, Maple Leaf’s performance is “positive,” said analyst Robert Gibson of Octagon Capital.
“Writing down the piggies, they’re taking the hit now as opposed to later.”
Sales dropped 1.8 per cent to $1.2 billion.
The company also announced it has completed an agreement with its syndicate of banks that will increase the existing revolving credit facility by $250 million to a total facility to $1.05 billion. It will also extend the maturity of the facility by one year.
The facility is unsecured and will continue to bear interest based on short-term interest rates. The financing, which matures on May 16, 2016, increases the weighted average term of the company’s debt to 4.7 years. The facility will be used for general corporate purposes.
PotashCorp interested in buying Israel Chemical Ltd.
toronto / reuters
PotashCorp has acknowledged it has held talks with Israeli government officials around potentially increasing its ownership stake in Israel Chemical Ltd. (ICL).
The world’s largest fertilizer company issued a statement after ICL’s majority shareholder, Israel Corp Ltd., confirmed media reports of the discussions in a regulatory filing.
In a brief statement, PotashCorp said: “No deal has been formulated; there is no assurance that a deal will be reached, or that parties will sign an agreement.”
The Saskatoon-based fertilizer maker refused further comment.