Maple Leaf Foods Reports Strong First Quarter Results with 55% Adjusted EBITDA Growth
Maple Leaf Foods Inc. (“Maple Leaf Foods” or “the Company”) (TSX: MFI) announced its financial results for the first quarter ended March 31, 2024, showcasing impressive year-over-year growth. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged by 55% to reach $116 million, a significant leap from the same period last year. This growth was attributed to various factors, including increased sales within the prepared meats portfolio and improved meat protein Adjusted EBITDA margin.
Curtis Frank, President and Chief Executive Officer of Maple Leaf Foods, expressed optimism about the company’s trajectory, emphasizing the successful execution of its strategic initiatives. Despite a slight decline in overall sales compared to Q1 2023, primarily due to deliberate sourcing decisions, Maple Leaf Foods remains steadfast in its commitment to meeting its 2024 priorities.
Looking ahead, the company anticipates continued momentum in its business operations. While challenges persist, particularly in the pork segment, Maple Leaf Foods is focused on driving growth in Canada, expanding its presence in the U.S., and capitalizing on recent capital investments.
First Quarter 2024 Highlights
- Adjusted EBITDA reached $116.4 million, reflecting a 55% increase year-over-year, with an improved margin of 10.1%.
- Net earnings for Q1 2024 amounted to $51.6 million ($0.42 per basic share), compared to a loss of $57.7 million ($0.48 loss per basic share) in the same period last year.
- Start-up expenses related to Capital Construction projects decreased by approximately 67% to $11.4 million.
- Sales in the Prepared Foods operating unit showed mixed results, with prepared meats increasing by 2.9% but offset by declines in plant protein and poultry.
- Free cash flow improved significantly to $73.6 million compared to $12.4 million in Q1 2023.
Outlook
For the full year 2024, Maple Leaf Foods anticipates:
- Low-to-mid single-digit revenue growth.
- Expansion of Adjusted EBITDA margin over 2023.
- Strong free cash flow generation and debt reduction.
The company’s refreshed Strategic Blueprint, coupled with organizational realignment, positions it for sustained growth and profitability. Maple Leaf Foods aims to achieve a consolidated Adjusted EBITDA margin target of 14-16% under normal market conditions.
Operating Review
Maple Leaf Foods has consolidated its Meat and Plant Protein businesses to streamline operations and enhance focus. As a result, the company is now reporting its business and operational results as a consolidated protein company. The move aims to align with management’s performance monitoring and measurement criteria and underscores its commitment to maximizing shareholder value.
The company’s sales, gross profit, SG&A, Adjusted Operating Earnings, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EBT for Q1 2024 demonstrate positive trends and reflect the efficacy of its strategic initiatives.
Other Matters
Maple Leaf Foods approved a quarterly dividend increase and announced the issuance of common shares from treasury under its Dividend Reinvestment Plan. The company remains focused on shareholder returns and sustainable growth.
Conference Call and Resources
A conference call was held to discuss Maple Leaf Foods’ first-quarter financial results. Investors can access the playback and other relevant documents on the company’s website.
Conclusion
Maple Leaf Foods continues to demonstrate robust performance and strategic foresight in navigating evolving market dynamics. With a clear focus on operational excellence, sustainable practices, and shareholder value creation, the company is poised for continued success in the dynamic protein industry landscape.
