Saputo Q4 profit drops amid higher costs, negative currency rates

MONTREAL _ Canadian cheese and dairy giant Saputo Inc. says its profit was down sharply in its latest quarter due to a combination of higher costs, exchange rates, and lower selling prices in export markets compared with last year.

The Montreal-based company said its net income for the fourth quarter ended March 31 was $130.0 million or 33 cents per diluted share, down 21.3 per cent from $165.2 million or 42 cents per diluted share a year earlier.

Adjusted net income dropped 18.1 per cent to $135.3 million, below analyst expectations of $149.41 million according to Thomson Reuters Eikon.

Revenue edged up 0.9 per cent to $2.744 billion from $2.720 billion in last year’s fiscal fourth quarter. However, a fluctuation in the value of Canada’s dollar compared with other currencies had a $93-million negative impact on revenue.

Revenue from the United States fell to $1.435 billion, from $1.487 billion, while revenue from other international markets dropped to $328.4 million from $373.5 million. Canadian revenue increased to $980.9 million from $959.8 million.

The company’s earnings were also negatively affected by a combination of a higher cost of milk as a raw material, lower selling prices in export markets, higher transportation costs, and other expenses including a higher tax rate.

Saputo’s share price was trading down $1.70 or 3.85 per cent at $42.47 in mid-afternoon trading on the Toronto Stock Exchange.