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The production area at a Maple Leaf Foods plant. Here, a worker prepares large rolls of bologna for automated slicing. (Fred Lum/The Globe and Mail)
The production area at a Maple Leaf Foods plant. Here, a worker prepares large rolls of bologna for automated slicing. (Fred Lum/The Globe and Mail)

Maple Leaf profit slips Add to ...

Meat and baked goods producer Maple Leaf Foods Inc. said Thursday its second-quarter profit was dragged down by a $20.7-million charge for interest rate swaps to $3-million or two cents per share from a year-ago $4.9 million or four cents.

However, the Toronto-based company said it was pleased with its overall operating performance as adjusted operating earnings rose 20 per cent to $52.2-million on a better on better performance by its Meat Products division.

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Adjusted earnings per share rose 42 per cent to 17 cents.

Maple Leaf, which was at the centre of a deadly Listeria outbreak in 2008, said its sales fell four per cent to $1.27-billion due the impact of currency fluctuations at the company's U.S. and U.K. businesses.

"We are very pleased with the continued steady improvements across our business in spite of challenging market conditions," president and CEO Michael McCain said in a statement.

"The protein business saw healthy improvements in financial performance while facing significant raw material cost increases. We expect this trend of improvement to continue. While our bakery business earnings were off slightly from year ago, there was a solid recovery in margin towards more normal levels that we expect to continue in the second half of the year."

Maple Leaf is a leading food processing company, with 23,500 people at its operations across Canada and in the United States, the United Kingdom, and Asia. It had sales of $5.2-billion in 2009.

The company makes processed meats under the Maple Leaf and Burns brands and also is Canada's largest baker through its Canada Bread subsidiary. Other brands include Schneiders, Shopsy's, Swift and Mitchell's as well as Dempster's.

Canada Bread reported Thursday a profit of $20.7-million or 81 cents a share, compared to $22.5-million or 89 cents in the same period of last year.

Adjusted operating earnings for the baker were $30.4-million, down from $33.1-million. Sales declined to $402.1-million from $435.9-million in the prior year, "mostly due to currency translation impacts of a stronger Canadian dollar on sales denominated in U.S. dollars and British pounds and lower volumes in the Frozen Bakery segment."

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