Canadian food processing company Maple Leaf Foods reported that its net earnings dropped to C$0.8m ($0.8m) for the first quarter ended March 31, 2012, compared to C$10.5m ($10.64m) the previous year, primarily due to lower fresh bakery volumes.
Sales increased 1% to C$1.16bn ($1.17m), compared to C$1.14bn ($1.11m) during the previous year, owing to higher pricing across all of the company's business divisions, which partially offset weaker fresh bakery and fresh pork volumes.
Maple Leaf Foods president and CEO Michael McCain said the company experienced challenging first quarter due to weak fresh bakery volumes, an issue affecting the entire industry.
"We are addressing this challenge directly and expect improved results through the remainder of 2012," McCain added.
Maple Leaf plans to implement cost-cutting measures and market the health benefits of bread, alongside anticipating its bakery volumes and margins to grow later in the year, owing to the likely fall of wheat price during the second half.
The company noted that it incurred C$20.4m ($20.6m) of pre-tax costs, due to its restructuring plans.
As a part of its restructuring plan to boost competitiveness and profitability, last year, the company announced its plan to cut 1,550 jobs, close plants in four provinces, streamline distribution, and invest C$560m ($561.81m) in infrastructure and technologies over three years.
During the quarter, the company closed down its chicken processing facility in Ontario, and moved production to two other Ontario-based facilities, with an investment of C$6.5m ($6.52m) to support the production transfers.
