(Montreal) Saputo declares war on inflation. The Montreal cheese maker has set itself the goal of catching up with the rise in market prices over the next few weeks.
Posted at 3:23 p.m.
Updated at 5:24 p.m.
The company will pull out “heavy artillery” to anchor itself to rising prices in all the regions where it is present, said Lino A. Saputo, its president and chief executive officer, during a conference call aimed at to discuss the latest quarterly results on Thursday. “At the start of the first trimester [avril]we will keep up with inflation, we will have recovered the cost increases and we give ourselves the right to renegotiate if inflation continues to rise,” said the man who also holds the position of chairman of the board of directors.
Mr. Saputo insisted that the time for patience with inflation within the company was over. “Maybe we weren’t as proactive as we should have been,” he admits. We will be much more proactive in the next fiscal year. »
In the third quarter ended December 31, higher transportation and logistics costs eroded earnings before income taxes, interest and amortization (EBITDA) by $46 million. The chief financial officer, Maxime Therrien, specified that the measures to catch up with inflation would take into account the increase in the price of transport.
Shortage of staff
Labor scarcity continues to be a thorn in the side of business in the United States. The equivalent of nearly 10% of its staffing needs is not met. “We believe that we will reduce this threshold to 5% by the end of the fiscal year,” said Mr. Saputo.
Demand remains strong, but there are many headwinds, says Chris Li of Desjardins Capital Markets in a note. “Labour scarcity and supply chain difficulties continue to impact the ability to fill all orders, particularly in the United States,” notes the financial analyst.
For the third quarter, Saputo posted a lower profit on Thursday compared to the same period last year, which the cheese maker attributed to difficult market conditions, including labor shortages, disruptions in the supply chain and inflationary pressures.
Saputo earned $86 million, or 21 cents per share, for the quarter ended Dec. 31, compared to $210 million, or 51 cents per share, for the same period a year earlier.
Revenue totaled $3.90 billion in the most recent quarter, up from $3.76 billion a year earlier.
The company said the revenue increase was driven by price increases in the international cheese and dairy ingredient markets, as well as selling price increases in the Canadian market.
Adjusted net income, which excludes amortization of intangible assets related to business acquisitions, was 33 cents per share, down from 55 cents per share in the same period a year earlier. early.
At the close, the stock gained 44 cents, or 1.57%, to $28.55 on the Toronto Stock Exchange on Thursday.
Vegan products
Mr. Saputo also mentioned that the company was preparing to launch six new plant-based protein cheeses in the United States and Canada this spring. In Canada, the launch will take place in May and nearly 500 points of sale have already been confirmed.
The company already sells a vegan alternative to mozzarella cheese to its commercial customers. Her boss says the feedback is very good. “We are very comfortable with the idea of replacing part of our volume of traditional cheese with that made from a plant base. The margins are very, very, good. »
Milk alternatives, such as soy milk or almond milk, are “important” elements in the company’s strategy to offset the decline in milk consumption, he added. Milk consumption would decrease at a rate of approximately 2% per year. “It will help us maintain our volumes in liquid products and have a positive impact on profitability. »