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Saputo Inc. is reporting lower profits in the first quarter of fiscal 2022 despite a 2.9 per cent increase in revenues as it continued to feel the effects of the COVID-19 pandemic.

The Montreal-based cheese and dairy processor says its net income plunged 63 per cent to $53 million in the quarter, down from $142 million a year earlier.

That amounted to 13 cents per share, down from 35 cents per share in the first quarter of fiscal 2021.

The company attributed the decrease to ongoing shifts in consumer demand, inflation, dairy pricing volatility, heightened competition and supply chain obstacles.

On an adjusted basis excluding amortization of intangible assets related to acquisitions, Saputo earned $122 million or 29 cents per share, down from $179 million or 44 cents per share in the year-ago period.

Revenues for the three months ended June 30 were $3.49 billion, up from $3.39 billion in the 2020 quarter on higher food service sales as the shift in consumer demand due to COVID-19 continued.

Analysts on average expected that Saputo would report 27 cents per share in adjusted profits on nearly $3.4 billion of revenues, according to financial data firm Refinitiv.

“Despite these challenges, we remain optimistic that the mitigating measures we’re putting in place and the first wave of initiatives we’re deploying under our global strategic plan will enable us to deliver organic adjusted EBITDA growth this fiscal year,” stated CEO Lino Saputo Jr.

“We’re moving forward with responsible pricing initiatives, and we’re keenly focused on diversifying our business and increasing the profitability of our product offering, supported by our three recent acquisitions in dairy alternative cheese, value-added ingredients, and specialty cheese.”

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