- Diary company, Saputo (TSX:SAP) has seen revenue jump but net earnings drop in the last quarterly report of its financial year
- Fourth quarter revenue grew 14.9 per cent to C$3.719 billion, when compared to last year’s same quarter
- Despite the revenue bump, net earnings slid to $88.7 million, down 28.6 per cent, compared to the previous corresponding period
- The company stated the pandemic caused a negative shift consumer demand, during the last two weeks of the quarter
- This resulted in dairy prices being negatively affected and the company being forced to write-down unsellable inventory as a loss
- Saputo (SAP) is down 3.78 per cent and is trading at $32.54 per share
Diary company, Saputo (TSX:SAP) has seen revenue jump but net earnings drop in the last quarterly report of its financial year.
Based in Montreal, the industry giant in one of Canada’s largest companies, producing and distributing dairy products around the world.
The global dairy powerhouse saw its quarterly revenue grow 14.9 per cent to C$3.719 billion, when compared to last year’s same quarter. Adjusted earnings for the same period were also up 8.5 per cent, hitting $298.4 million.
Despite the revenue bump, net earnings slid to $88.7 million, down 28.6 per cent, compared to the previous corresponding period.
Even after adjusting to exclude amortisation related to acquired businesses, net earnings in the quarter were still down 21.5 per cent.
Saputo stated the coronavirus had shifted consumer demand in the last two weeks of the quarter. Consequently, the company was forced to write down its resulting unsellable inventory as a loss.
Furthermore, certain dairy markets around the world dropped prices during pandemic-related lockdowns, which also impacted the quarterly figures.
However, during the quarter, Saputo acquired the Australian cheese business Lion Diary and Drink, which had a positive effect on the its revenue and earnings.
The company’s full-year figures reflect its quarterly performance. Net earnings were down from $755.3 million last year to $582.8 million this year. However, revenue was up at $14.9 billion, compared to $12.5 billion in the previous year.
Turning to its market performance, the company’s share price has dropped substantially since the onset of the COVID-19 pandemic.
Between mid-February and mid-March this year, Saputo’s market share dropped almost 30 per cent. While the company’s share price has somewhat recovered since then, it has yet to return to pre-pandemic levels.
Saputo (SAP) is down 3.78 per cent and is trading at $32.54 per share at 2:45pm EDT.