While Mississauga-based Canada Packers Inc. (CPKR-T) delivered stronger hog volumes in the first quarter, there was a reason that didn’t translate to better profit.

“The change in Q1 sales was driven by higher volumes offset by currency headwinds,” Deepak Bhandari, chief financial officer at Canada Packers, said on an earnings call held April 30.

“Total sales for the first quarter of 2026 were $428.3 million, a decrease... when compared to pro forma first quarter 2025 sales.”

EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter was $42.1 million, which was lower by “approximately $2 million or four per cent when compared to pro forma first quarter of 2025 adjusted EBITDA,” Bhandari added.

“The Q1 adjusted EBITDA margin of 9.8 per cent was a 50-basis point decline over our Q1 2025 pro forma margin of 10.3 per cent. Despite significant currency headwinds in the quarter, a slight decline in year-over-year profitability underscores the durability of our business as we benefited from increased hog volumes, and supply chain performance and targeted sales of our global customers,” he continued.

However, the strong cash flow allowed the firm to pay $10 million toward its bank loan.

Inaugural first-quarter results for new company

Because it is still less than one year that the company was formed after its spin off from Maple Leaf Foods, the company is relying on pro forma results as a comparator, Bhandari explained.

Canada Packers began trading on the Toronto Stock Exchange on Oct. 2, 2025. Maple Leaf Foods retains a 16 per cent ownership interest in Canada Packers and the two companies have an evergreen supply agreement.

The firm reported Q1 sales of $428.3 million, which was lower than prior year sales of $452 million. Its adjusted earnings-per-share was also lower: $0.54 versus $0.89 in 2025. The board of directors also approved a quarterly dividend of $0.23 per share, $0.92 per share on an annual basis, payable on June 30.

High fuel prices to be passed on to customers

But one issue was on the minds of one analyst during the call. Irene Nattel, managing director at RBC Capital Markets, asked the firm about the impact of higher fuel prices.

“There will be some short-term pressure on fuel when it comes to customer deliveries and the fuel we use on the farms. And the other place it can show up as an inflationary pressure is on packaging items,” Dennis Organ, president and chief executive officer of Canada Packers, said.

“We feel like this is some short-term positioning over the next this quarter, and maybe the next, as we figure some things out; pass on what we can, there’ll probably be some short-term impacts that we’ll overcome long term.”

The company’s geography can play a role in mitigating the effects of higher costs of corn, Organ said.

“One thing we say is a structural differentiator that we have is our location. We’re located in the Prairies, around feed and around the lot of supplies. Where that shows up is our ability to procure grains in close proximity to our production is an advantage.”

As well, its continued strong performance could help. “Productivity could potentially offset all cost impacts,” he said.

The company sees bright future for 2026, Organ said. “In the quarter, hog processing volume grew two per cent supported by continued improvement in on-farm performance and across the supply chain. While hog volume will move quarter to quarter with normal seasonality, we remain on track to deliver annual volume growth within our 2026 target range of two to three per cent”

It is continuing as a separate company and its goals and priorities are clear, according to Organ.

“Strengthen the balance sheet, build financial flexibility and return cash to shareholders in a sustainable way. Overall, this was a solid quarter and another step forward in our Chapter 1 plan: fill our plants, continue to improve operational execution and use free cash flow to strengthen the balance sheet and position the business for Chapter 2 opportunities over time.”

“We’re really comfortable that the two or three per cent growth is going to continue for the next three years or so.”