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Maple Leaf profit misses estimates on weak pork prices, shares fall

Published 2019-02-28, 10:28 a/m
© Reuters.  Maple Leaf profit misses estimates on weak pork prices, shares fall
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Feb 28 (Reuters) - Canadian packaged meat producer Maple Leaf Foods Inc MFI.TO missed analysts' estimates for quarterly profit on Thursday, as weak pork prices offset growth in its prepared meats business, sending its shares down 4 percent.

Pork prices have taken a beating from the Sino-U.S. trade war, with China's retaliatory tariffs affecting demand from the South Asian country, which is the world's biggest pork importer.

The company said it expects continued uncertainty in the fresh pork markets, citing trade tensions, potential for increased supply and outbreaks of African swine fever in China.

Beijing has reported more than 100 outbreaks of the disease since August last year. African swine fever does not harm humans but is deadly to pigs and there is no vaccine or cure.

Maple Leaf, which owns the Greenfield Natural Meat, Prime and Schneiders brands, said sales rose about 2 percent to C$893.9 million in the fourth quarter, while gross margin fell 8 percent.

Excluding items, the company earned 29 Canadian cents per share, missing analysts' average estimate of 34 Canadian cents, according to IBES data from Refinitiv.

Maple Leaf's net earnings slumped 80 percent to C$11.9 million ($9 million), or 10 Canadian cents per share, in the quarter ended Dec. 31, as the company recorded a C$40.7 million charge related to its investment in a poultry facility in Ontario. November, Maple Leaf said it planned to set up a C$660 million poultry processing plant in Ontario, with investments from the Canadian and the provincial governments.

The company's shares were down 3.8 percent at C$27.50 in morning trade. ($1 = C$1.32)

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