Saputo has reported a decrease in net income of 3.4% in its third-quarter results as Canadian sales volumes fell.
In the three months to September 30, the dairy company posted a net income of CAD 185.2 million ($144.4 million), down from CAD 191.8 million ($149.5 million) the year before.
Revenues were up 1.4% to CAD 2.88 billion ($2.25 billion). However, Saputo said that its revenues were hit by lower sales volumes and an ‘unfavourable product mix’ in Canada.
In the US, higher sales volumes, as well as higher international selling prices of cheese and dairy ingredients, positively impacted revenues during the quarter.
Revenue increased in its international business due to higher international selling prices of cheese and dairy ingredients, as well as higher sales volumes in both the domestic and export markets.
In September, Saputo completed the acquisition of the extended shelf-life dairy product activities of Southeast Milk.
As it continues its growth by acquisition strategy, the company last week agreed a $1 billion deal for Australia’s struggling dairy business Murray Goulburn.
And earlier this week it agreed a deal to buy US goat’s cheese manufacturer Montchevre, complementing the $80 million acquisition of goat’s cheese producer Woolwich Dairy two years ago. Saputo said it aims to broaden its presence in speciality cheeses and it expects the Monchevre deal to be complete by the end of 2017.
In a bid to improve efficiency and ‘mitigate downward margin pressures’, the business will close its Ottowa plant next month.
In a statement on the company’s outlook, Saputo said: “The company intends to leverage the success of the rebranding effort of the Saputo brand and reaffirming its engagement to consumers from coast-to-coast as their preferred and trusted cheese brand through various promotions, advertising and innovative packaging.”
© FoodBev Media Ltd 2018
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