CORRECTED-UPDATE 1-Maple Leaf Foods profit jumps on lower charges

Tue Feb 26, 2013 9:38am EST

(Corrects fifth paragraph to show net earnings per share at 39 Canadian cents, not 38 Canadian cents)

* Food inflation to effect first half of year

* Short-term earnings volatility expected as prices rise

Feb 26 (Reuters) - Maple Leaf Foods Inc, one of Canada's biggest bakers and meat processors, reported a jump in quarterly profit on Tuesday as restructuring charges fell, and said it expects volatile earnings in the first half of 2013 as it raises prices.

The Toronto-based company, best known for its Maple Leaf and Schneiders branded meats and Dempster's bread, has been hurt by soaring grain prices caused by a severe drought in the United States, which drove up the cost of raising hogs and baking.

"The effects of food inflation driven by the North American droughts of 2012 will be felt mostly in the first half of 2013. As a result, we expect some short-term volatility in our earnings as we pass those cost increases on in the marketplace," Chief Executive Michael McCain said in a statement.

"Beyond this, our strategic initiatives will accelerate in 2013 and contribute to continued margin growth.

The company, which is closing older meat plants and modernizing others under a multi-year plan to boost earnings, said net profit for the fourth-quarter rose to C$56.8 million ($55.36 million), or 39 Canadian cents per share, from C$9.2 million, or 6 Canadian cents per share, a year earlier.

Revenue dropped 3 percent to C$1.2 billion.

On an adjusted basis, operating earnings rose to C$91.3 million from C$57.4 million last year, reflecting improvements in meat and bakery groups, the company said.

Adjusted earnings per share rose to 38 Canadian cents from 21 Canadian cents a year earlier.

($1 = 1.026 Canadian dollars) (Reporting by Susan Taylor in Toronto and Shounak Dasgupta in Bangalore; Editing by Joyjeet Das and Grant McCool)

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