Operating earnings for the second quarter increased by 15% to $34.1 million, from $29.7 million last year.
Year-to-date operating earnings increased 16% to $51.2 million, from $44.0 million last year. The Meat Products Group and the Bakery Products Group both reported solid increases in operating earnings in the second quarter and year-to-date. The Meat Products Group increase was achieved in spite of continuing margin pressure due to high hog prices, which we do not see easing this year.
The Agribusiness Group operating earnings for the second quarter, and year-to-date, are lower than last year as a result of the sale of the Caribbean flour and feed operations in August 1996, and losses incurred in Seafood Products Company Limited, our west coast seafood business. Losses in the seafood business were a result of significant reductions in the pricing of herring roe. Operating results from the balance of the Agribusiness Group increased in the second quarter, and year-to-date, over last year.
Net earnings for the second quarter increased 26% to $13.9 million ($0.15 per share), up from $11.0 million ($0.12 per share) in the second quarter last year. Year-to-date net earnings increased 34% to $17.8 million ($0.19 per share), up from $13.3 million ($0.14 per share) last year.
Sales for the quarter of $926 million increased from $814 million last year. Year-to-date sales of $1.77 billion increased from $1.51 billion last year. A significant part of the increase in sales relates to Burns/Gainers Meats, which was acquired in October 1996. The remainder of the increase is due to sales growth in the Bakery Products Group.
During the second quarter, the Company purchased the processed meats business of Principal Marques Inc. Principal Marques is a Canadian processor of quality meats, sold primarily in the deli market across Canada and in some parts of the United States under the Coorsh, Bittners and Parma brand names. The acquisition significantly strengthens Maple Leaf Meats' position in the deli market and adds high value specialty meats to the Company's product portfolio.
In July 1997, the Company finalized changes to its banking facilities the effects of which are reflected in the second quarter financial statements. The new unsecured facilities represent an increase of $105 million to available facilities and increase the average term of the Company's debt. No principal payments are required until July 2000. These changes provide the Company a great deal more flexibility in considering other sources of financing in the future, and better allows the Company to pursue future growth plans.
The Company declared a dividend of $0.04 per share, payable on September 30, 1997 to shareholders of record on September 12, 1997.
Archie McLean, Vice-Chairman and Chief Executive Officer, said "We remain fully committed to our vision and plan for the Company and expect to see continued improvement in earnings through the remainder of the year."
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