Maple Leaf Foods Q3 loss $12.9M after $42.9M in listeria contamination costs (Maple-Leaf)

TORONTO _ Maple Leaf Foods Inc. (TSX: MFI) has reported a summer-quarter loss of $12.9 million, dragged down by $42.9 million in recall, restructuring and other costs related to the listeria contamination of products from its Toronto packaged-meat plant.

The quarterly loss, worth 10 cents per share, compares with a year-earlier profit of $220.4 million or $1.67 per share, which included a $218.7-million gain on discontinued operations.

Sales edged up to $1.34 billion, from $1.30 billion a year ago, but the big Toronto-based food processor also saw most of its operating profits wiped out in its troubled meat products group.

Operating earnings in the division plunged 94 per cent to about $800,000 from $13.6 million last year as the company pulled more than 200 meat products from store shelves after the listeria contamination at the plant.

"The headline for the third quarter was managing the unprecedented recall at our Toronto packaged meats plant and doing what was right to protect consumers and maintain public trust," said Michael McCain, president and CEO of the company.

"While the recall is complete, our actions had a very substantial near-term impact. Our focus through the remainder of 2008 will be on stabilizing our business and continuing to restore confidence, including implementing an enhanced food safety program that will be among the best in North America."

Excluding the food-poisoning disaster which killed 20 people across Canada, Maple Leaf said it would have earned a profit of 13 cents per share, compared with six cents per share a year ago, thanks to ``improved commodity markets, protein restructuring and price increases.''

The recall from the Bartor Road plant in Toronto is complete ``and actions are underway to restore sales and volumes,'' the 23,500-employee company stated.

``In other areas of our business, results improved considerably and as expected we are starting to see material benefits from the restructuring of our protein operations,'' said McCain.

The ``strategic reorganization'' of Maple Leaf's meat operations entails reducing fresh pork processing operations and focusing on higher-profit packaged meat and processed meals.

Maple Leaf closed its Winnipeg pork plant during the third quarter and it is trying to sell its Burlington, Ont., plant which processes over two million hogs annually. Also during the quarter, a double shift expansion was completed at the Brandon, Man., plant which will be Maple Leaf's only remaining pork processing site, handling more than four million animals a year.

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