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Saputo Releases Results for Q2 of Fiscal 2018: Announces Acquisition of U.S.-Based Montchevre

Saputo Releases Results for Q2 of Fiscal 2018: Announces Acquisition of U.S.-Based Montchevre


MONTREAL, QUEBEC
Tuesday, November 7th, 2017

With the release of the financial results for the second quarter of fiscal 2018, Saputo Inc. revealed a steady growth strategy in Canada, the U.S., and beyond.

The company made several moves in mergers and acquisitions throughout the quarter. On Sept. 29 it completed the acquisition of the extended shelf-life dairy product activities of Southeast Milk, Inc. The next month, specifically Oct. 26, Saputo announced that it entered into an agreement to acquire the business of Australia-based Murray Goulburn Co-Operative Co. Limited for a purchase price of CDN$1.29 billion.

Most recently, the team announced it entered into an agreement to acquire Betin, Inc., doing business as Montchevre, which manufactures, markets, and distributes goat cheese in the United States. For the twelve-month period ended on June 30, 2017, Montchevre generated revenues of approximately CDN$150 million.

Saputo cheesemakers inspecting product

The transaction with Montchevre is expected to close at the end of this year, while the Murray transaction will likely be completed in the first half of calendar year 2018.

Highlighted details from Saputo’s financial report included:

  • Net earnings totalled $185.2 million, a decrease of $6.6 million or 3.4%.
  • Earnings before interest, income taxes, depreciation and amortization (EBITDA1) amounted to $329.5 million, a decrease of $11.1 million or 3.3%.
  • Revenues for the quarter amounted to $2.884 billion, an increase of approximately $39 million or 1.4%.
  • Net earnings per share (basic and diluted) were $0.48 and $0.47, respectively for the quarter as compared to $0.49 and $0.48 for the corresponding quarter last fiscal year, a decrease of 2.0% and 2.1% respectively.
  • In the Canada Sector, revenues were negatively impacted by lower sales volumes and an unfavourable product mix. EBITDA increased due to operational efficiencies through raw material optimization.
  • In the USA Sector, a higher average butter market3 price per pound was partially offset by a lower average block market per pound of cheese, as compared to the same quarter last fiscal year which increased revenues.

Higher sales volumes, as well as higher international selling prices of cheese and dairy ingredients also positively impacted revenues during the quarter, according to the release.

Goat cheese products from Saputo's recently-acquired Montchevre brand

In fiscal 2018, Saputo said it intends to benefit from its global complementary platforms.

“Our goal remains to continue to improve overall efficiencies in all sectors and pursue growth organically and through acquisitions,” it stated in the report.

As Deli Market News continues to follow key moves in growth and strategy in dairy and beyond, keep checking in for all the latest.

Saputo

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