Canada-based consumer packaged meats company Maple Leaf Foods reported a year-on-year net loss of $54.6 million (€53.4 million) in the second quarter of its financial year ended 30 June 2022.
The company attributed this loss to cost inflation and labour challenges, as well as higher restructuring costs and start-up expenses.
Year-to-date net loss for 2022 amounted to $40.9 million (€40 million) compared to earnings of $56.5 million (€55.2 million) last year.
'Unpredictable Operating Environment'
"This chaotic and unpredictable operating environment is unprecedented in my 40-year career in the food industry," said Michael H McCain, president and CEO of Maple Leaf Foods.
"Driven by a post-pandemic economy and the tragic conflict in Eastern Europe, we have been unable to hire adequate people resources to operate our supply chains, experienced unnatural agricultural and trading markets, and realised hyper-inflation that has been challenging to keep up with pricing," McCain added.
Sales in the second quarter increased by 3.1% year on year to $1,19 billion from $1.15 billion last year, driven by good performance in its meat protein division, partially offset by lower sales in the plant protein unit.
The company's meat protein business reported year-on-year sales growth of 3.8% to $1.16 billion.
Sales in its plant protein unit declined by 15.2%, to $40.8 million. Adjusted operating earnings for the second quarter amounted to $23.6 million, down from $58.3 million last year.
The company has forecast mid-to-high single-digit sales growth in its meat protein division in 2022.
The plant protein division is expected to deliver neutral or better-adjusted EBITDA in the latter half of 2023.
McCain added, "While our second quarter results fell short of expectations with an adjusted EBITDA margin of 9% in the Meat Protein Group, we see signs of these conditions abating.
"Our commitment to achieving 14-16% Adjusted EBITDA was grounded in the assumption of normal, five-year average market conditions and we are confident we will deliver that once the environment stabilises, although predicting this timeline at the moment is challenging."