Canadian dairy giant Saputo has reported a fall in annual profits after recording a C$125m (US$121.5m) impairment charge on its small grocery products business.

The charge, which Saputo blamed on “stagnating growth in market-wide snack cake sales”, led its net earnings to tumble 15.4% to C$380.8m for the 12 months to the end of March.

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Adjusted net earnings increased 9.6% to C$505.8m over the year, despite a fall in the fourth quarter after lower EBITDA from its US business.

Annual revenue from Saputo’s grocery products unit fell 5.2% to C$134m. The sales accounted for under 2% of Saputo’s turnover, which stood at C$6.93bn and was up 15.4% on a year before. Sales from the company’s US dairy business increased by more than a third.

However, the grocery products division did see EBITDA increase 0.8% to C$12.7m. Full-year company-wide EBITDA increased 5.4% to C$830.9m with earnings from Saputo’s Canadian and US dairy businesses higher year-on-year.

In the year ahead, Saputo said the “main focus” for its grocery products business would be to build sales in the US.

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Saputo said it expected the “competitive dairy market of recent years to continue to be challenging”.

In Canada, Saputo expects to see growth in “value-added milk”. It also will look to invest in categories including speciality cheese across the country.

In the US, the company expects to make further inroads into the country’s speciality cheese sector in the wake of last year’s acquisition of local firm DCI Cheese Co.

Click here for the full statement from Saputo.