CANADA: Clement Pappas takeover costs hit Lassonde Q3 profits

• Net profits climb by 3.9% to CAD$21.3m (US$20.8m)
• Operating profits reached C$35.4m, up by 8.7%
• Sales increase by 24% to CAD$395.6m
• Third-quarter net profits fall by 6.8% to CAD$8.2m

Lassonde Industries has recorded an increase in nine-month profits, despite costs from the takeover of juice maker Clement Pappas and Co hitting third quarter earnings.

Net profits for the period to 1 October climbed by 3.9% to CAD$21.3m (US$20.8m), while operating profits reached C$35.4m, up by 8.7% on the prior-year period, the company reported yesterday (15 November). Sales increased by 24% to CAD$395.6m.

Net profits however, fell by 6.8% to CAD$8.2m in the three months to 1 October. The company said after-tax costs from the Clement Pappas deal were CAD$2.9m in the third quarter.

However, the Clement Pappas business made an operating profit of CAD$1m in the quarter, which led Lassonde to report a 0.6% increase in company-wide operating profit to CAD$13.8m. Excluding its new acquisition, Lassonde's operating profit was down 7% on the year due to its failure to achieve price increases to cover "sharp" hikes in apple and orange concentrate costs.

Clement Pappas did benefit Lassonde's top line during the quarter. The company's sales climbed 54.2% to CAD$210.8m after Clement Pappas added CAD$63.6m to its turnover. Without Clement Pappas, Lassonde's revenue was up 7.7% due to the price increases it achieved and higher sales of private-label products.

Chairman and CEO Pierre-Paul Lassonde said Clement Pappas had so far met the company's expectations. "We are satisfied with the progress made regarding the integration of CPC. Although the results of our new subsidiary reflect only seven weeks of operations, they have met our expectations," he said.

Click here to view the earnings release.