Canadian dairy giant Saputo has told analysts that six of its US facilities will be shuttered by “sometime in the early calendar year [2025]”.
COO Carl Colizza said in a post-Q4 results call that its Belmont, Wisconsin and Big Stone, South Dakota, facilities have already been closed while the previously announced closure of its Lancaster, Wisconsin, plant and its Bardsley facility in Tulare, California will shut before the end of its first quarter.
Also to be closed are facilities at Green Bay, Wisconsin and South Gate, California.
The total number of jobs impacted by these closures has not been revealed.
Colizza said said the closures will “contribute to reducing our duplicate costs in our network and continue to optimise the scenario in Franklin, [Wisconsin], which is the facility that is primarily at the centre of absorbing this consolidation”.
Saputo said it is engaged in several capital projects focused on supporting its US growth, including establishing new facilities and adding capacity to support key product categories.
It said these projects - including a new automated cut-and-wrap facility at Franklin - are either fully operational or “ramping up” and will be fully operational in the coming months.
In a statement accompanying its results, CEO Lino Saputo, who is stepping down from the role in August, said: “Fiscal 2024 was a year of continued resilience. Our financial performance reflected our ability to stay the course even amidst a dynamic macro-economic environment which included commodity price volatility, a challenged consumer, and ongoing inflationary pressures.
“It was also a year of continued progress where, after three years of investing in and optimising our global network, we have now completed the bulk of the major capital projects under our Global Strategic Plan and we are ramping up commercial production at several of our facilities.”
Asked by an analyst to quantify what the lift to EBITDA would be for this year from the initiatives it has taken or is planning to take, Colizza said: “The previously announced initiatives in the US amounted to close to C$200m ($145.2m) and based on what we've just shared that would translate into close to C$100m in savings is what we anticipate to see by the end of fiscal 2025.”
In the quarter to 31 March, the Cathedral City cheese brand owner recorded revenues of C$4.54bn, up C$77m or 1.7% year-on-year. Adjusted EBITDA was down from C$392m to C$379m while net earnings of C$92m were down from C$159m the previous year.
Over the 12-month period, Saputo’s revenues of C$17.34bn were down from C$17.84bn a year earlier. Adjusted EBITDA was down from C$1.55bn to C$1.50bn and net earnings dipped from C$622m to C$265m.
In February, it was revealed that Saputo had booked a loss in its third quarter on the back of a C$265m impairment charge related to its Australia dairy division.
