* Q1 EPS C$0.53 vs C$0.41 yr ago, analyst forecast C$0.50
* Revenue C$1.44 billion vs C$1.45 billion
* Dividend raised to 16 Canadian cents a share
(Adds details, analyst comments, conference call, updates
By Solarina Ho
TORONTO, Aug 3 Saputo Inc (SAP.TO), Canada's
biggest dairy processor, reported a more than 31 percent rise
in quarterly profit on Tuesday, helped by higher U.S. cheese
prices and despite lower revenues.
"It was a relatively straightforward quarter that played
out pretty much like the commodity prices that we saw during
the quarter suggested it would," said analyst Candice Williams
of Canaccord Genuity.
Saputo said its profit was bolstered by a 21 cent rise in
the average block market per pound of cheese, or the average
daily price of a 40 pound block of cheddar traded on the
Chicago Mercantile Exchange, used as the base price for
However, revenues took a hit due to the strong Canadian
dollar versus the U.S. dollar and the Argentine peso, the
The Montreal-based maker of Stella cheese and Vachon
dessert snacks also raised its quarterly dividend by 10.3
percent to 16 Canadian cents a share.
"It just suggests some of the strength that we're seeing
isn't all commodity related," said Williams. "There are
fundamental, sustainable improvements to back a dividend
Saputo, also among the top cheese producers in the U.S. and
top dairy processors in Argentina, reported a first-quarter
profit of C$111.4 million ($108.7 million), or 53 Canadian
cents a share, for the three months ended June 30. That
compared with a profit of C$84.8 million, or 41 Canadian cents,
a year earlier.
In addition to higher cheese prices, a more favorable dairy
ingredient market and last year's acquisition of F&A Dairy of
California also helped offset the impact of the foreign
exchange, the company said.
Consolidated earnings before interest, income taxes,
depreciation and amortization, or EBITDA, were up 20.4 percent
to C$190.8 million on more efficient operations and better
market conditions, it said.
Revenue fell 0.7 percent to C$1.44 billion from C$1.45
billion. Foreign exchange translations affected roughly C$75
million in revenues and C$9 million in EBITDA, the company
Analysts had forecast earnings of 50 Canadian cents a share
on revenue of C$1.5 billion, according to Thomson Reuters
"Our hard work during the first quarter of fiscal 2011
allows us to be optimistic for the upcoming quarters," said
Chief Executive Lino Saputo during a conference call with
"Our intention is to make other acquisitions in areas of
businesses that are core for us. That will be our first use of
cash," he said.
Saputo shares were up 4 Canadian cents, or 0.1 percent, at
C$31.45 on the Toronto Stock Exchange on Tuesday afternoon.
(Reporting by Solarina Ho; editing by Rob Wilson)