Shares of Maple Leaf Foods Inc. closed more than 17 per cent lower on Thursday after the company reported sales in its plant-based protein division plunged in the latest quarter.
In a press release, the company said sales of its plant-based products fell by 15 per cent in the second quarter compared to a year ago.
But this isn’t stopping Maple Leaf Foods’ from focusing on growing its plant-based branch, with the company reporting an $18.6 million restructuring charge to the division.
“In our Plant Protein business, we are in full motion executing our transition to a different business model,” said Michael McCain, president and CEO of Maple Leaf Foods, in a press release Thursday.
The Ontario-based company said its aiming for the plant protein business to have at least neutral adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the second half of 2023.
Maple Leaf Foods has been aggressively expanding its plant-based offerings over the past few years. One of its most significant investments was the acquisition of Lightlife Foods, Inc. for US$140 million in 2017, which is a manufacturer of products like vegan burgers, sausages and bacon.
'CHAOTIC AND UNPREDICTABLE' ENVIRONMENT
Quarterly woes expanded beyond its plant-based protein division, with the company reporting it missed analyst expectations and gross profit fell to $136.0 million, compared to $167.0 million a year ago.
In the press release, McCain called it a “chaotic and unpredictable operating environment” for the food industry.
“Driven by a post-pandemic economy and the tragic conflict in Eastern Europe, we have been unable to hire adequate people resources to operate our supply chains, experienced unnatural agricultural and trading markets, and realized hyper-inflation that has been challenging to keep up with pricing,” McCain said.
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