The rising cost of beef has prompted Canada’s Premium Brands Holdings to adjust its annual adjusted EBITDA forecast.
Despite this adjustment, the processed-meats and deli-foods manufacturer remains optimistic, anticipating a rise in adjusted EBITDA for the year. However, on 10 November, the company revised its guidance due to the “transitory impact of continued increases in the cost of beef raw materials.”
Premium Brands is now expecting its adjusted EBITDA to be between C$670-680m ($478.1-485.2m) in 2025, a slight decrease from the previous guidance of C$680-700m. In 2024, the adjusted EBITDA reached C$593.7m.
In contrast, the owner of Hempler’s meats has raised its forecast for full-year sales to C$7.4-$7.5bn, up from C$7.2-7.4bn.
Premium Brands recorded “record” highs in both adjusted EBITDA and revenue for the third quarter ending 27 September.
Specifically, adjusted EBITDA reached C$179.1m, an increase of 12.4% compared to the third quarter of 2024.
Third-quarter revenue climbed to C$1.99bn, reflecting a 19.1% year-on-year growth, with volumes up by 10.1% on an organic basis.
Despite this growth, president and CEO George Paleologou noted, “While we generated another quarter of record adjusted EBITDA, our margins for the quarter were below our expectations due to double-digit cost inflation for certain key beef raw materials.”
“Looking forward, we are confident that this headwind is transitory and that the issues causing this most recent rise in beef prices are being addressed. In the meantime, we are taking targeted pricing actions and developing new procurement initiatives to restore margins in the impacted product categories with the objective of putting us back on track to achieve our mid-term targeted annual adjusted EBITDA margin of 10%,” he added.
Paleologou also emphasized that Premium Brands’ “acquisitions pipeline has never been more robust,” stating the company is “active on several transactions which we hope to close in the next quarter or two.”
He further remarked, “We remain committed to continuing to deleverage our balance sheet over the course of 2025 and fiscal 2026, and any transactions will be done within this context.”
Earlier, in March, the company announced the acquisition of Arizona-based premium sausage manufacturer Denmark Sausage for US$21m.
In December, the company disclosed three other acquisitions, including the US entities NSP Quality Meats and Casa Di Bertacchi, alongside Canada-based Italia Salami.
However, Premium Brands reported a third-quarter loss of C$1.7m, compared to a profit of C$25.4m in the same period a year prior.
For the first nine months, net earnings were C$28.8m, down from C$84.2m during the corresponding period in 2024.
Revenues for the first three quarters of this year reached C$5.58bn, an increase from C$4.83bn a year earlier.
