Maple Leaf Foods lost almost $22 million in the fourth quarter and $12.3 million on the year, according to its financial report released today.
More worrisome is the fact that the meat division lost $43 million in the fourth quarter compared with a $43-million profit for the same quarter last year.
The bakery division was the only one to turn a profit and Maple Leaf announced a deal recently to sell that to Grupo Bimbo of Mexico. The bakery division made a profit of $31 million in the fourth quarter compared with $33 million last year.
Total sales for the quarter were $1.1 billion, 2.1 per cent less than last year. Sales for the year were 3.2 per cent less than the previous year.
Maple Leaf also sold its Rothsay Concentrates and Oliviera bakery businesses last year for a total of $745 million. It has not disclosed the sales price for its turkey farms and quota and hatchery that were part of Cold Spring Farms bought by J.M. Schneider Inc. just before Maple Leaf bought Schneiders.
President and ceo Michael McCain said the fourth-quarter losses reflect the company’s three-year investment in a major restructuring that involves building five new facilities to replace older plants, including the Schneider plant in downtown Kitchener.
He said the older plants will all be closed by the end of the year and the new ones, including the biggest at Hamilton, will be fully commissioned then. He said operating margins will improve when this transition has been completed.
He said Maple Leaf will use its 90 per cent share from the $1.83 billion sale of Canada Bread to Bimbo bakery to pay down debt, to invest in the meat business and to “return excess capital to shareholders.: He did not put figures to each of those three.
Maple Leaf shares have declined since the announcement of the sale of Canada Bread.