MONTREAL - Canada's largest cheesemaker, Saputo Inc. (TSX:SAP) reported slightly lower net profits for the latest year and fourth quarter, but the company saw a sharp jump in revenues, mainly from the acquisition of the Neilson Dairy business in southern Ontario.
The Montreal-based dairy processor and baker reported Tuesday its net profits dropped 3.2 per cent to $278.9 million for the fiscal 2009 year ended March 31.
That amounted to $1.35 a share and was down from earnings of $288.2 million or $1.40 a share for fiscal 2008.
Annual revenues rose 14.5 per cent to just under $5.8 billion from about $5.1 billion, the Montreal company said in its earnings release.
For the fourth quarter, Saputo's net profits fell to $69.2 million from $75.2 million and revenues jumped 15.3 per cent to $1.46 billion.
Saputo said its revenues were boosted for the year and fourth quarter by the acquisition of Neilson, a Toronto-area milk producer formerly owned by the George Weston food conglomerate. (TSX:WN)
Saputo struck a deal with Weston late last year to pay C$465 million to acquire Neilson, boosting the Montreal company's milk and dairy operations in the competitive southern Ontario market.
"Fiscal 2009 was a good year for the company despite numerous challenges with regards to volatile market conditions," the Montreal dairy company said in a release. "We enter fiscal 2010 with optimism."
Looking ahead, the company said it plans to fully integrate the Neilson Dairy acquisition next year and streamline plants to improve efficiencies. Saputo also wants to complete capital spending programs for its European operations.
In Argentina, Saputo's subsidiary in the South American country is under financial pressure from high local milk prices and and falling international cheese prices so the company plans to focus on efficiencies and cost cuts to improve the operations.
The U.S. division faces a deep recession, but is well positioned to face the tough economy, Saputo said, noting that the division plans to complete expansion projects in California and Wisconsin.
Meanwhile, grocery products will re-evaluate its entire operations with plans to revamp manufacturing and streamlining the number of products.
"With the current economic crisis, we intend to maintain our sound approach, while closely monitoring our operations to cope with the current context and to also continue to maximize our efficiency," Saputo said.
"We are in a solid financial position with a sound fundamental structure. This should provide the company with the basis to pursue growth internally and through acquisitions, and to overcome the challenges that could come our way."
Saputo is the largest dairy processor and snack cake maker in Canada, producing cheese, milk, yogurt, dairy ingredients and snack-cakes. The company is also growing its business in the United States and Argentina and sells its products around the world under well-known brand names such as Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, Danscorella, Dragone, Neilson, Nutrilait, Stella and Vachon.
In Tuesday trading on the Toronto Stock Exchange, Saputo shares rose 29 cents to $21.99, a gain of 1.3 per cent.