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In a press release dated March 9th Maple Leaf Foods Inc. (MFI-TO) announced results for the fourth quarter and FY 2022 ended December 31st.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS (conversion of CAN$1=US$0.78)

For FY 2022 Maple Leaf Foods posted a net loss of $(224,562) on revenue of $3,41 million with a diluted EPS of $(1.81). For FY 2021 Maple Leaf Foods posted net earnings of $74,032 on revenue of $3,25 million with a diluted EPS of $0.59. 

FY 2022 Meat Protein Segment:

Sales, $3,307 million, up 5.2% from FY 2021.

Adjusted operating earnings $137 million down 46.0% from FY 2021.

FY 2022 Plant Protein Segment:

Sales, $121.8 million, down 8.0% from FY 2021.

Adjusted operating loss $(89.6) million 17.1% improvement from FY 2021.

52-Week Range in Share Price:  $13.57  to  $22.06   50-day Moving average  $18.82

Market Close pre-release March 8th $20.13  

Market Open post-release March 9th  $18.16

Insider shareholding 40.1%. Institutional shareholding 28.0%

In commenting on FY 2022 results Michael H. McCain, president and CEO of Maple Leaf Foods stated, “This was clearly a year of unprecedented challenges for us on many fronts, including hyper-inflation, dislocation in the pork markets, supply chain dysfunction, job vacancies and a cyber-attack,” He added “Despite this tumultuous environment, we have maintained a steady hand on executing our plans including aggressively building our sustainability platform, starting up over CN$1 billion of new assets and converting our plant-based business model to profitable growth. Of course, our fourth quarter results are not where we like them to be, given these unprecedented market conditions and the impacts of the cyber-attack, but the underlying health of the business in normal markets is solid and in-line with where we expected to be at this point.”

McCain concluded “We continue to see an inflection point in our business” He noted, “The start-up of the London Poultry plant is going exceptionally well and on schedule, we are on-track to get to Adjusted EBITDA neutral or better in our plant-based business this year, our supply chains are normalizing now, the imbalance in our pricing for inflation is now coming into line and important Asian regions have opened up again for us. These unprecedented markets will normalize; they always do.”

The report included the following commentary:-

“During late 2021, the Company announced that it was re-evaluating its outlook for the Plant Protein Group and launching a comprehensive review of the overall plant protein category. This decision was driven by a pronounced slowdown in growth rates in the category, particularly in the second half of the year, which fueled the Company’s imperative to identify and thoroughly assess the causes, near and long-term trends, and overall implications. While the Company’s analysis is ongoing, the results to date confirm that the very high category growth rates previously predicted by many industry experts are unlikely to be achieved given current customer feedback, experience, buy rates and household penetration. Based on this new information, the Company believes that the category will continue to grow at more modest, but still attractive rates. Current estimates suggest that the category will grow at an average annual rate of 10% to 15%, making it a CN$6 billion to CN$10 billion market by 2030. Accordingly, the Company has pivoted its strategy and investment thesis for the Plant Protein Group and has set a new goal to deliver neutral or better Adjusted EBITDA in the latter half of 2023. Work is ongoing to implement this strategy. The Company expects at least a 50% improvement in Adjusted EBITDA losses in the first quarter of 2023 versus the same period last year, representing another sequential improvement versus the fourth quarter of 2022.

In late 2021, the Company announced that it was re-evaluating its outlook for the Plant Protein Group and launching a comprehensive review of the overall plant protein category. This decision was driven by a pronounced slowdown in growth rates in the category, particularly in the second half of the year, which fueled the Company’s imperative to identify and thoroughly assess the causes, near and long-term trends, and overall implications. While the Company’s analysis is ongoing, the results to date confirm that the very high category growth rates previously predicted by many industry experts are unlikely to be achieved given current customer feedback, experience, buy rates and household penetration. Based on this new information, the Company believes that the category will continue to grow at more modest, but still attractive rates. Current estimates suggest that the category will grow at an average annual rate of 10% to 15%, making it a $6 billion to $10 billion market by 2030.

 The Company announced in May 2022 that it is moving forward with a planned leadership transition plan for the Board and Management.  Michael McCain will serve as the Executive Chair of the Board and will continue as CEO for the next year as part of the management transition plan. Curtis Frank, currently the President and COO, will assume the role of CEO during Q2 of 2023.