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MISSISSAUGA, ONT.—Maple Leaf Foods (TSX:MFI) said on Wednesday its net income more than doubled in the fourth quarter and that it will allow its largest shareholder hold a larger stake in the company.
The Toronto-area food processing company said fourth-quarter net income was $ 76.2 million, or 57 cents per share, up from 24 cents per share or $ 33.3 million in the same quarter of 2015.
Sales were $ 828.2 million, down 5.1 per cent from $ 873.1 million in the fourth quarter of 2015. However, the company noted that 2015 had an extra week and sales were up 2.0 per cent year-over-year when it’s excluded.
Part of the year-over-year increase in profit was due to a higher fair value of some of its assets and commodity contracts.
Adjusted operating earnings were up less dramatically than net income — rising 33.3 per cent to $ 63.7 million from $ 47.8 million. Adjusted earnings per share was 31 cents, up from 25 cents per share.
Analysts had estimated 33 cents per share of adjusted earnings, according to Thomson Reuters data.
Nevertheless, Maple Leaf shares were at $ 29.85, unchanged from Tuesday’s close, after about two hours of trading.
RBC Dominion Securities analyst Irene Nattel said Maple Leaf had delivered a “solid” quarter, demonstrated its ability to improve margins, and increased its dividend by two cents to 11 cents per share, payable March 31.
Maple Leaf also announced a revised governance agreement with McCain Capital, which includes Maple Leaf chief executive Michael McCain, allowing its largest shareholder to increase its stake to 45 per cent of the company. A 2011 agreement had limited the group’s ownership to 31.9 per cent.
Maple Leaf announced Tuesday that it will acquire an American company that makes plant-based protein foods for US$ 140 million and any related costs.
Lightlife Foods Inc. of Turners Falls, Mass. makes vegetarian deli meats and other meatless foods.
The deal is subject to a U.S. regulatory review and is expected to close in March.