Maple Leaf Foods Inc. has reported its financial results for the second quarter ending June 30, 2024.

“In the second quarter of 2024, we made excellent progress in executing our strategic playbook, delivering Adjusted EBITDA of $141 million, 37% growth over the second quarter of last year, and 11.2% Adjusted EBITDA Margin, a 310 basis point improvement year over year,” said Curtis Frank, president and CEO of Maple Leaf Foods. “Several key elements contributed to our performance, including 3.2% year-over-year sales growth in our prepared meats business, improved pork market conditions, growth in our sustainable meats portfolio, better overall sales mix, and contributions from our large capital projects.”

“We remain laser-focused on executing our priorities for 2024, and we are not taking our eye off the longer-term goals we have set for ourselves” continued Frank. “We are harvesting the benefits from our London poultry plant and Bacon Centre of Excellence, driving cost out of the business, deleveraging our balance sheet, and drawing on our team’s proven ability to demonstrate agility in a challenging consumer demand environment.”

“Looking ahead, we are on a clear path to unleashing the potential of our business by separating into two independent public companies, each primed for growth and positioned to be a leader in its field,” stated Frank. “I am confident, that these two companies – Maple Leaf Foods and the new Pork Company – will unlock the value of their respective organizations for the benefit of all stakeholders, with dedicated management teams and the financial independence to pursue their own value creation strategies. This will be the next exciting milestone step in executing the Maple Leaf playbook.”

On July 9, Maple Leaf Foods announced plans to separate into two independent public companies through the spin-off of its pork business. The Company expects that this transaction will be completed in 2025.

Second quarter 2024 highlights

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization grew to $141 million, a 37% increase from the second quarter of last year, with Adjusted EBITDA margin increasing from 8.1% to 11.2% for the same period.

Sales were $1,261 million for the second quarter, compared to $1,266 million for the same period last year. Sales in prepared foods increased approximately 1%. Within prepared foods, prepared meats increased 3.2% which was partially offset by declines in poultry and plant protein of 3.9% and 2.5% respectively, compared to the same period in the prior year. Sales in the pork operating unit decreased by 4.2% compared to last year.

Loss for the second quarter of 2024 was $26 million ($0.21 per basic share) compared to a loss of $54 million ($0.44 loss per basic share) last year.

Capital expenditures in the second quarter of 2024 were $16 million compared to $53 million in the second quarter last year, consistent with the company’s focus of disciplined capital management, and reflecting the completion of its large capital projects.

Net Debt was $1,723 million, with Net Debt to trailing four quarters Adjusted EBITDA of 3.4x, an improvement from 3.7x at the end of the first quarter.

Free cash flow improved to $27 million, an increase of $103 million from the same quarter last year.

Outlook

For the full year 2024, the company expects: