Canada Packers reports $28.4-million Q2 net loss on softer markets and standalone costs
Canada Packers Inc. reported a net loss of $28.4 million for the second quarter of 2026, down from net earnings of $23.4 million in the same period last year.
The Mississauga, Ont.-based pork processor posted sales of $431.7 million for the 13-week period ended June 27, 2026. That represents an 8.8 per cent decrease compared to sales of $473.2 million in Q2 2025.
The company cited several factors for the lower revenue and earnings:
- Lower pork cutout values that did not follow seasonal historical patterns
- A weaker Japanese yen
- The net impact of ham boning operations remaining with Maple Leaf Foods Inc. following the company's spinoff
- Higher selling, general, and administrative (SG&A) expenses related to operating as a standalone public company
Second-quarter financial summary
Canada Packers recorded a gross loss of $6.2 million for the quarter, down from a gross profit of $54.7 million in Q2 2025.
The Q2 loss includes a $48.3-million non-cash decrease in the fair value of biological assets, compared to an $8.1-million decrease in Q2 2025. The company notes that biological asset value changes are excluded from Adjusted EBITDA calculations and do not impact day-to-day operations.
Adjusted EBITDA fell to $34.9 million (or 8.1 per cent margin) from $51.4 million (10.9 per cent margin) in the second quarter of 2025. Adjusted Earnings Per Share (EPS) reached $0.34, down from $0.93 in 2025.
"Our second quarter results demonstrate the resilience of our business, delivering Adjusted EBITDA within our 8% - 12% target range and generating strong free cash flow despite challenging market conditions," said Dennis Organ, president and chief executive officer of Canada Packers.
Year-to-date performance and operations
For the 26-week period ended June 27, 2026, Canada Packers reported:
- Sales: $860.0 million, down 7.0 per cent from $925.2 million in 2025.
- Net Earnings: $15.4 million, down 73.3 per cent from $57.6 million in 2025.
- Gross Profit: $86.7 million, compared to $124.0 million in 2025.
- Adjusted EBITDA: $77.0 million, compared to $101.1 million in 2025.
Operational efficiency provided some offset to weak pork cutout markets. The processor handled 1,047,000 hogs in Q2 2026, up 0.5 per cent from 1,041,000 hogs in Q2 2025. During the quarter, 48.1 per cent of hogs were internally sourced and 51.9 per cent were externally sourced.
Interest expenses rose to $6.7 million in Q2 2026 from $1.1 million in Q2 2025, primarily driven by interest on the company's term loan. SG&A costs increased 26.7 per cent to $23.7 million due to long-term service and supply agreements associated with its public company structure.
Balance sheet, dividends, and key adjustments
As of June 27, 2026, Canada Packers held $432.8 million in net debt, consisting of $376.6 million in long-term debt and $101.9 million in lease obligations, offset by $45.7 million in cash. Its leverage ratio stood at 2.4x based on trailing 12-month pro forma adjusted EBITDA of $183.5 million.
Free cash flow for the quarter totaled $22.9 million, compared to $66.1 million in Q2 2025. Effective Q2 2026, Canada Packers discontinued reporting "adjusted free cash flow" as a performance metric, stating it no longer provides extra useful information beyond free cash flow.
The company paid a quarterly dividend of $0.23 per share ($6.8 million total) in Q2. On August 4, 2026, the Board of Directors declared an equivalent quarterly dividend of $0.23 per share ($0.92 per share annualized), payable on September 30, 2026, to shareholders of record as of September 9, 2026.
