The cost of beef has led Canada’s Premium Brands Holdings to lower its annual adjusted EBITDA forecast.
The processed meat and deli food maker still expects adjusted EBITDA to increase this year, but today (Nov. 10) cut its guidance due to the “transitory impact of continued increases in the cost of beef raw materials.”
Premium Brands now forecasts its adjusted EBITDA to reach C$670-680 million ($478.1-$485.2 million) in 2025, compared to its previous guidance of C$680-700 million. In 2024, the group’s adjusted EBITDA reached C$593.7 million.
By contrast, Hempler’s meat owner raised its full-year sales forecast to C$7.4-7.5 billion from its previous projection of C$7.2-7.4 billion.
Premium Brands reported adjusted EBITDA and revenue hit “record” highs in the third quarter in the 13 weeks to September 27.
Adjusted EBITDA stood at C$179.1 million, an increase of 12.4% from the third quarter of 2024.
Third quarter revenue reached C$1.99 billion, an increase of 19.1% year-over-year. Volumes grew 10.1% organically.
“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,” said President and CEO George Paleologou.
“Looking forward, we are confident that this headwind is temporary and that the issues that caused this most recent increase in beef prices are being addressed. In the meantime, we are taking targeted pricing actions and developing new procurement initiatives to restore margins in affected product categories with the goal of getting back on track to achieve our medium-term annual adjusted EBITDA margin target of 10%.”
Paleologou, for his part, said Premium Brands’ “acquisition pipeline has never been stronger,” adding that the company is “active on several transactions that we expect to close in the next quarter or two.”
However, he said: “However, we remain committed to continuing to deleverage our balance sheet over the course of 2025 and fiscal 2026 and any transactions will be conducted within this context.”
In March, the company revealed its acquisition of Arizona-based premium sausage maker Denmark Sausage for $21 million.
The acquisitive retail and food service provider had announced three other acquisitions in December: US duo NSP Quality Meats and Casa Di Bertacchi, as well as Canada-based Italia Salami.
Premium Brands posted a loss of C$1.7 million in the third quarter, down from a profit of C$25.4 million in the corresponding period a year earlier.
Nine-month net profits amounted to C$28.8 million, up from C$84.2 million in the first nine months of 2024.