Saputo Inc. Reports 9.5% Revenue Growth

World 12.08.2024

Source: The DairyNews

Saputo Inc. (TSX: SAP) announced its financial results for the first quarter of fiscal 2025, ending June 30, 2024. The company reported strong revenue growth, solid cash generation, and improvements across various sectors, driven by strategic initiatives and operational efficiencies.

Fiscal 2025 First Quarter Financial Highlights:

Revenues: $4.606 billion, a 9.5% increase from the previous year, reflecting higher sales volumes across all sectors.
Net Earnings: $142 million, with stable earnings per share (EPS) of $0.33.
Adjusted EBITDA: $383 million, a 5.8% increase, driven by operational improvements in the USA Sector and strong performance in the Canada Sector.
Adjusted Net Earnings: $167 million, with adjusted EPS of $0.39, up from $0.37 the previous year.

Key Insights:

The USA dairy market showed signs of stabilization, benefiting Saputo's operations, though some volatility is expected in the short to medium-term.
Global demand for dairy products remains moderate, with international market prices subdued due to macroeconomic factors.
Inflationary pressures are expected to ease, though labor costs may stay elevated, and increased marketing investments are planned to support new product launches.
Saputo expects a gradual increase in contributions from optimization and capacity expansion initiatives, particularly in the USA Sector.
The Europe Sector is set to benefit from improved product mix and cost reductions, while the International Sector will see varying impacts from lower milk prices in Australia and economic volatility in Argentina.

Saputo remains optimistic for the rest of fiscal 2025, anticipating further progress on its strategic initiatives and continued improvements in performance. The company expects steady cash flow generation and a reduction in leverage ratio, targeting below 2.25 times net debt to adjusted EBITDA by the end of the fiscal year. Factors influencing performance will include consumer economic health, input cost inflation, supply chain stability, and the benefits from the company's Global Strategic Plan.

The Board of Directors has increased the quarterly dividend by 2.7% to $0.19 per share, payable on September 20, 2024, to shareholders of record on September 10, 2024, reflecting confidence in the company's future growth prospects.