Saputo Inc. (SAPIF.PK)
F4Q10 (Qtr End 03/31/10) Earnings Call
June 9, 2010 3:00 pm ET
Lino Saputo, Jr. – President and CEO
Louis-Philippe Carrière – EVP, Finance and Administration
Irene Nattel – RBC
Michael Van Aelst – TD Newcrest
Jim Durran – National Bank Financial
Candice Williams – Canaccord Genuity
Peter Sklar – BMO
Mark Petrie – CIBC
Saputo Inc. F4Q10 (Qtr End 03/31/10) Earnings Call Transcript
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Ladies and gentlemen, thank you for standing for standby and welcome to Saputo Incorporated year-end financial results conference call. During the presentation, all participants will be in a listen-only mode, after which we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded Wednesday, June 9th, 2010.
It is now my pleasure to introduce Mr. Lino Saputo, Jr. Please go ahead, sir.
Lino Saputo, Jr.
Thank you. (inaudible).
Unidentified Company Speaker
Good afternoon and thank you for joining us today. A press release detailing our 2010 fourth quarter and fiscal results was issued earlier today and is available as we speak on our website at www.saputo.com. This call is being recorded and will be posted on our website for future reference.
I would like to specify that our Internet listeners, as well as journalists are on a listen-only mode. Members of the media are invited to ask their questions by phone at the end of this call.
Before we proceed, I remind you that certain information that will be discussed during this call may constitute forward-looking information within the meaning of securities laws. Caution should be used in the interpretation of such information since management has made certain assumptions, including, among others, assumptions regarding projected revenues and expenses, and references to objectives and strategies that are subject to a number of risks and uncertainties which could cause actual results to differ materially from those presented in such forward-looking information.
For more information on these risks and uncertainties, you should refer to our most recent Annual Report that is available on SEDAR. Any forward-looking information discussed during this call is based on management's current reasonable estimates and expectations, and we do not undertake to update this information, except as required by law.
The speakers today are Mr. Louis-Philippe Carrière, Executive Vice President, Finance and Administration and Mr. Lino Saputo, Jr., President and Chief Executive Officer. After a brief presentation, we will conclude the call with your questions.
Louis-Philippe will now start the conference, followed by Lino Jr.
Thank you, Karine [ph] and good afternoon. Before I comment on our fiscal 2010 results, I will briefly cover some of our results for the fourth quarter. Net earnings for the quarter ended March 31, 2010 totaled 99.1 million Canadian dollars or 0.48 Canadian dollars basic per share, an increase of 29.9 million Canadian dollars or 42.2% compared to the same quarter of last fiscal year.
EBITDA for the quarter totaled 175.5 million Canadian dollars, a 33.6 million Canadian dollars or a 23.7% increase compared to the same period of last fiscal year. EBITDA for our Canada, Europe and Argentina Dairy Products sector increased by approximately 20 million Canadian dollars or 19.7% to 117.7 million Canadian dollars, mainly due to operational efficiencies, a more favorable dairy ingredients market, and improved results from our Argentinean operations.
The inclusion of a 3.4 million Canadian dollars rationalization charge in connection with the recently announced closure of our Brampton, Ontario fluid plant and the consolidation of our Toronto, Ontario distribution activities decreased EBITDA for the quarter compared to the same one last fiscal year.
EBITDA for the USA Dairy Products sector increased by approximately 16 million Canadian dollars or 41.2% in the current quarter compared to the same quarter of fiscal 2009. The sector benefitted from initiatives undertaken in prior and current fiscal years, such as improved operational efficiencies, lower ingredient and other costs, and inclusion of the F&A Dairy acquisition.
An increase in the average block market per pound of cheese positively affected the absorption of the fixed costs and also other favorable impact on the realization of inventories in the fourth quarter of fiscal 2010 as compared to the same quarter of last fiscal year.
Also, the sector experienced a more favorable dairy ingredients market. These increases were partially offset by a less favorable relationship between the average block market per pound of cheese and the cost of milk as raw material compared to the same quarter last fiscal year. Strengthening of the Canadian dollar during the quarter eroded approximately 11 million Canadian dollars in this fiscal year's EBITDA.
EBITDA for our Grocery Products sector decreased by approximately 2 million Canadian dollars for the fourth quarter in comparison to the same one last fiscal year. A rationalization charge of approximately 3 million Canadian dollars in relation to the restructuring of the sector’s distribution network in Ontario offset the benefits derived from the initiatives implemented throughout the year.
Revenues for the fourth quarter totaled 1.384 billion Canadian dollars, a decrease of 5.2% compared to the 1.460 billion Canadian dollars for the same quarter last fiscal year. The decrease is mainly attributed to slightly lower sales volume in all sectors, as well as the strengthening of the Canadian dollar.
Now, I would like to outline some of our results for the year-end. For the fiscal year-end March 31st, 2010, net earnings totaled 382.7 million Canadian dollars or 1.85 Canadian dollars basic per share, a 37.2% increase in comparison to 278.9 million Canadian dollars or 1.35 Canadian dollars per share in last fiscal year.