Saputo Inc (SAPIF) Q4 2025 Earnings Call Highlights: Strong Domestic Growth Amid International ...

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Revenue: $4.8 billion in the fourth quarter, a 5% increase year-over-year.
Adjusted EBITDA: $365 million for the fourth quarter.
Net Earnings: $74 million for the fourth quarter; adjusted net earnings of $128 million, down $28 million year-over-year.
Canada Sector Revenue: Nearly $1.3 billion, a 6% increase year-over-year.
Canada Sector Adjusted EBITDA: $157 million, up 14% year-over-year.
USA Sector Revenue: $2.1 billion, an 11% increase year-over-year.
USA Sector Adjusted EBITDA: $148 million, a 7% increase year-over-year.
International Sector Revenue: $1 billion, down 10% year-over-year.
International Sector Adjusted EBITDA: $47 million, down $41 million year-over-year.
Europe Sector Revenue: $335 million.
Europe Sector Adjusted EBITDA: $24 million.
Net Cash from Operating Activities: $362 million for the fourth quarter.
Capital Expenditures (CapEx): $113 million for the fourth quarter.
Net Debt to Adjusted EBITDA Ratio: 2.1x as of March 31, 2025.
Share Repurchases: Approximately $150 million in shares repurchased under the NCIB program in fiscal year 2025.
Warning! GuruFocus has detected 4 Warning Signs with SAPIF.
Release Date: June 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Saputo Inc (SAPIF) reported a 5% increase in consolidated revenues, reaching $4.8 billion, driven by higher domestic selling prices and international market prices.
The company achieved $150 million in share repurchases under its NCIB program, reflecting strong financial health and commitment to shareholder value.
Operational efficiencies and strategic initiatives led to a 14% increase in adjusted EBITDA in the Canadian sector.
The USA sector saw an 11% revenue increase and achieved $27 million in cost savings, contributing to an 18% year-over-year growth in adjusted EBITDA.
Saputo Inc (SAPIF) is advancing its digital technology adoption to enhance operational efficiency and customer value, positioning itself for future growth.
The international sector faced challenges due to currency devaluation and hyperinflation in Argentina, impacting overall performance.
Net earnings for the fourth quarter were down $28 million compared to the previous year, primarily due to higher depreciation and financial charges.
The European sector continues to face challenges with inflationary pressures and lower margins, despite some recovery in sales volume.
Softening consumer demand, particularly in the food service channel, was observed, affecting volumes in the USA sector.
The Argentina division experienced higher production costs and reduced milk availability, contributing to a decline in adjusted EBITDA.
Q: Carl, the outlook section seems more confident than in previous years. Can you comment on where you're feeling most confident and where you see potential challenges? A: Carl Colizza, President and CEO: The business is performing well, and we've made significant investments over the past few years. We feel strongly about our capabilities and the diversity of our portfolio. North America, particularly the US, presents the greatest upside due to our capital investments. We expect growth across all sectors.
Q: Can you expand on the acceleration of investment in priority regions? A: Carl Colizza, President and CEO: We've been exploring new markets, especially in Southeast Asia, Japan, and the Middle East, due to trade dynamics and dairy demand shifts. This expansion helps us maintain our baseline and establish ourselves as a credible supplier in new areas, which is a multiyear process.
Q: How are you addressing SG&A optimization, and what impact will it have in fiscal '26? A: Carl Colizza, President and CEO: We've reshaped business processes and adopted digital technologies to focus resources on high-value areas. This led to a reduction in workforce, resulting in structural changes that will benefit cost efficiency and operational effectiveness.
Q: Can you discuss the situation in Argentina and the potential impact of currency control relaxation and slowing inflation? A: Carl Colizza, President and CEO: Milk supply is improving, and currency stability is aiding pricing strategies. Maxime Therrien, CFO, added that Argentina's agreement with the IMF is expected to stabilize the economy, reducing inflation and currency volatility, which should positively impact our financial results.
Q: How do you plan to manage the increased milk prices in Australia, and can you pass these costs on domestically? A: Carl Colizza, President and CEO: Our competitive opening price aligns with consumer willingness to pay and international demand. We continue to support our farming community and recover costs through balanced pricing strategies, ensuring it doesn't detrimentally impact our bottom line.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.