Saputo revenue increased more than 20 per cent to $2.62-billion.Christinne Muschi/The Globe and Mail
Cheese and dairy processor Saputo Inc. is raising its quarterly dividend and splitting its stock after recent acquisitions helped improve results. The Montreal-based company said Tuesday it will increase its dividend by three cents to 26 cents a share.
Net earnings grew 6.3 per cent to $145.3-million, or 73 cents a share, for the period ended June 30, which compared to $136.7-million or 69 cents a share a year ago.
Saputo's adjusted earnings were 73 cents a share, which was four cents below analyst expectations, according to a survey by Thomson Reuters.
Revenues increased more than 20 per cent to $2.62-billion.
The results were helped by the company's acquisition of a majority interest in Australia's Warrnambool Cheese and Butter Factory.
Saputo is also planning what's essentially a two-for-one stock split as it pays shareholders a stock dividend of one common share for each Saputo share they hold.
However, the company came under fire Tuesday from an animal rights activist who said it hasn't done enough to prevent animal cruelty since undercover videos revealed cows being kicked, punched and beaten with pipes at a diary operation that supplies milk used by the cheese maker.
Chief executive Lino Saputo Jr. defended the company after a member of Mercy For Animals spoke out at the Saputo shareholder meeting and challenged its commitment to "sweeping change" for the dairy industry.
"We will not let this item go until there is some change in the industry," Saputo said following the annual meeting. "We are not specialists in this field. However we will use our power and our clout to get the attention of those people that have the experience in this field to create some reform in the industry."
The Montreal-based company says it took a legal risk when it stopped accepting milk from Chilliwack Cattle Sales for two days because of the evidence of animal cruelty. Saputo says it's required by law to purchase milk from provincial marketing boards and is only permitted to reject milk for safety reasons.
It wants legal reform to give supply managed boards the power to refuse milk based on cruelty, adoption of industry codes of practice and regular farm inspections.
But Krista Osborne, executive director of Mercy For Animals, which shot the video, said she isn't satisfied with the dairy giant's response. The group wants cameras installed in dairies with live streaming of cows to the Internet because it suspects such events are happening across the country.
Chilliwack Cattle fired eight employees after the group took the video to authorities. Saputo resumed accepting milk from the operation following independent verification of its practices from inspectors from Wisconsin and Ontario.
During the shareholder meeting, Saputo credited the animal-rights group for bringing the issue to light, saying as a dairy products consumer he was "appalled" by what he saw.
The chief executive told shareholders he has confidence in the company's outlook and its opportunities for growth.