One of Burnaby’s biggest companies is seeing COVID-19-related impacts on demand for its dairy products.
Dairy processor Saputo, which operates a huge plant on Lougheed Highway in North Burnaby, saw its net profit slipped 2.3 per cent in the second quarter of its fiscal year, the company reported Thursday, as sales in the food service sector continued to lag behind historical levels.
This might surprise some as people are still drinking milk, but COVID-19 has weakened demand in some key areas - restaurants, cafeterias and hotels.
Saputo said while its revenues edged up in the quarter, its net earnings declined to $170.8 million or 42 cents per diluted share compared to $174.9 million or 44 cents per share a year earlier.
Lino Saputo, Jr., Saputo’s board chairman and CEO, said the pandemic continues to influence the business.
"Temporary mandated closures in the food service space impacted consumer demand for our products," he said during a call with analysts and investors.
"There's no doubt we're still facing headwinds in the food service segment, which will persist as long as restrictions remain in place."
While Saputo said there were signs of recovery during the quarter with the gradual easing of government-imposed restrictions, he said the company is also "adapting to the new world."
"We've not shied away from taking advantage of the situation," he said. "We're ensuring our innovation and marketing pipeline is well positioned to seize opportunities and drive future growth."
The Burnaby Saputo plant is due to move to Port Coquitlam at some point after the company sold the prized property for more than $200 million.
For the three months ended Sept. 30, adjusted profits dropped 7.2 per cent to $184.1 million, from $198.3 million in the second quarter of 2019.
That equalled to 45 cents per share, five cents below last year's second quarter.
Revenues were $3.7 billion, up one per cent from $3.67 billion amid a continuing shift during the COVID-19 pandemic to retail stores from restaurants.
Saputo was expected to post 43 cents per share in adjusted profits on $3.73 billion of revenues, according to financial data firm Refinitiv.
- With files from the Canadian Press
