Saputo reports boost in Q3 profit, revenue on back of acquisitions amid industry headwinds
Saputo Inc. reported higher third-quarter profit and revenue amid what the CEO called industry challenges.
“Again, this quarter, we were met head on with higher warehousing and logistical costs, weak dairy ingredient and cheese markets, working in tandem with an increasingly competitive landscape,” said CEO Lino Saputo during a conference call with analysts Thursday.
The company continues with initiatives designed to mitigate such headwinds, he said.
He noted that traditional — or so-called fluid — milk is in decline not only in Canada, but all developed markets as it faces competition from plant-based proteins, among other things.
The company is choosing to get into value-added milks, like lactose-free and protein-enhanced products, as well as sports drinks.
Demand for cheese and other dairy solids is growing around the world, though, he said.
“So, the industry definitely is not dying,” Saputo said, though a possible recession and ongoing trade wars could create some volatility.
The company earned $342 million in its third quarter, up from $337 million in the same quarter last year.
The profit amounted to 87 cents per diluted share for the quarter ended Dec. 31, up from 86 cents per diluted share a year earlier.
Revenue for the quarter totalled $3.58 billion, up from $3.02 billion a year earlier, as the company benefited from acquisitions.
On an adjusted basis, Saputo earned 44 cents per diluted share, down from an adjusted profit of 47 cents per diluted share a year earlier.
Analysts on average had expected a profit of 45 cents per share, according Thomson Reuters Eikon.
Saputo shares closed at $41.23, up 4.3 per cent, on the Toronto Stock Exchange.
Saputo also announced the appointment of Martin Gagnon as chief acquisition and strategic development officer, effective April 1. Gagnon joined the company in 2016 as executive vice-president of mergers and acquisitions.