Canadian dairy company Saputo has reported 18.7% year-on-year growth in revenue, to CAD 17.8 billion (€12.4 billion), due to higher domestic selling prices and previously announced pricing initiatives to mitigate increasing input costs.
Sales volumes increased in the US division, while export sales volumes decreased due to reduced milk availability in Australia. The overall sales volumes remained stable in the financial year.
Net earnings for the full financial year amounted to CAD 622 million, up 127.0%, compared to the previous financial year.
Adjusted EBITDA increased 34.5% to CAD 1.553 billion, up from CAD 1.155 billion for the financial year 2021.
Growth Drivers
Improved results reflect 'solid performances' in the international and Canadian units and recovery in the USA division, according to Saputo.
Commenting on full-year results, Lino A Saputo, chair of the board, president and CEO said, "During fiscal 2023, we stepped up the quality of our execution by taking decisive action to counter inflation and improving our supply chain performance, while continuing to lay the groundwork to support our long-term strategy.
"Although the current macro backdrop remains challenging, we expect a year of organic growth in fiscal 2024, with a focus on expanding our adjusted EBITDA margins, maximising our cash flow, and driving operating leverage. Our solid foundation will serve us well as we continue to make progress on unlocking the full earnings potential of our Global Strategic Plan.”
Fourth-Quarter Results
Revenue increased by 12.9% year-on-year in the fourth quarter to CAD 4.5 billion, from $3.96 billion in the same quarter last year.
Net earnings amounted to CAD 159 million, up CAD 122 million or 329.7%, from $37 million last year.
Adjusted EBITDA in the fourth quarter reached CAD 392 million, up 50.8% year on year, from CAD 260 million in the same period last year.
“We delivered a solid performance in the fourth quarter, notably through pricing initiatives, strong international markets, and favourable commodity prices. We also made progress across our supply chain which allowed us to further improve our ability to supply our customers, notably in our USA Sector,” Saputo added.
Outlook
Saputo expects inflation on its overall input costs to moderate, but to remain at elevated levels.
It hopes to manage the current inflationary environment through pricing protocols and cost containment measures.
The dairy firm expects growth in demand for dairy products globally, but foresees the impact of pricing elasticity to continue to increase.
Competitive market dynamics and softening demand in the US are expected to negatively impact its volumes, as well as operational efficiencies and the absorption of fixed costs in the USA division, the company added.
© 2023 European Supermarket Magazine – your source for the latest Fresh Produce news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
