Rogers Sugar TSE: RSI reported third-quarter fiscal 2026 adjusted net earnings of C$16 million, or C$0.13 per share, compared with C$17 million, or C$0.13 per share, a year earlier, as strength in its sugar business helped offset softer maple syrup demand.
Consolidated adjusted EBITDA totaled C$36 million in the quarter, versus C$37 million in the prior-year period. For the first nine months of fiscal 2026, adjusted EBITDA rose to nearly C$121 million from C$111 million a year earlier, while adjusted net earnings increased to C$60 million, or C$0.47 per share, from C$53 million, or C$0.41 per share.
Revenue declined 8% year over year to C$294 million in the quarter, largely because of lower average raw No. 11 sugar prices. Chief Financial Officer Jean-Sébastien Couillard said the lower raw sugar prices had limited impact on profitability because of the company’s hedging program. Lower volumes in both the sugar and maple segments also contributed to the revenue decline.
Sugar segment remains the primary earnings driver
The sugar segment generated adjusted EBITDA of C$32 million, compared with C$33 million in the same quarter last year. Sugar sales volume was approximately 188,000 metric tons, down about 3,000 metric tons from a year earlier.
President and Chief Executive Officer Mike Walton said lower liquid sugar volume was the largest factor behind the decline, following the closure of a major customer facility in Western Canada. That weakness was partly offset by modestly higher industrial demand, particularly from confectionery customers, and a marginal improvement in export volumes.
Walton said the company has seen signs of recovery among existing confectionery customers, citing lower cocoa prices and lower No. 11 sugar values as potentially supportive of consumer demand for chocolate products.
Sugar segment adjusted gross margin was C$46 million, slightly lower than the prior year. The result included a C$3 million non-recurring, non-cash pension charge associated with the new collective agreement at the Montreal refinery. Higher production costs and lower sales volumes also weighed on margin, but those items were largely offset by improved refining-related contribution, favorable pricing and product mix, and lower raw sugar procurement costs.
Couillard said lower procurement costs reflected a small number of raw sugar shipments that arrived at prices below the prior year and should not be viewed as recurring. Adjusted gross margin per metric ton rose modestly to C$245 from C$243 a year earlier.
For the full year, Rogers Sugar modestly increased its sugar volume forecast to 745,000 metric tons, reflecting improved industrial and export demand in recent months. The forecast remains below fiscal 2025 volume, with the decline primarily tied to lower-margin export sales and reduced liquid sugar volumes.
Management expects gross margin per metric ton to remain broadly stable in the fourth quarter and through fiscal 2027, excluding one-time items. Walton characterized exports as opportunistic, low-margin business representing less than 5% to 10% of annual sugar operations, with demand subject to changing tariff conditions.
Maple results fall below expectations
The maple segment delivered results in line with the prior-year quarter but below management’s expectations, as global maple syrup demand softened amid food inflation and more cautious consumer spending. Maple segment adjusted EBITDA was approximately C$4 million in the quarter, slightly below the prior year, and was just under C$17 million for the first nine months, down about C$3 million from a year earlier.
Maple adjusted gross margin was essentially flat at C$5.5 million. Improved pricing and lower syrup costs offset lower sales volume and higher production costs, though the segment’s adjusted gross margin percentage was 8.6%, below management’s expectations.
Couillard said additional maintenance spending affected quarterly maple margins. He said the company continues to target approximately a 10% full-year margin while reviewing its customer portfolio and managing a more competitive market.
Walton said Rogers Sugar supplies maple products in more than 50 countries and sees periodic competitive pressure in different regional markets. The company said it will prioritize profitable returns rather than pursue volume at the expense of margins.
LEAP expansion advances as labor agreements extend
Rogers Sugar said its LEAP expansion project at the Montreal plant is entering its final phase. Most major equipment has been installed, and the company has completed a successful test of the raw sugar melting process. The focus now shifts to operational readiness and further commissioning work.
The company maintained its expected LEAP cost range of C$280 million to C$300 million and said incremental refining capacity is still expected to begin coming online in the first half of calendar 2027. Rogers Sugar had spent C$207 million on the project as of the end of the third quarter.
Walton said the new capacity will provide additional flexibility, particularly in Ontario, but cautioned that the ramp-up and full commercial contribution will occur gradually as domestic demand grows.
During the quarter, Rogers Sugar reached a five-year collective agreement with the principal union at its Montreal facility, extending through May 2031. It also extended the agreement at its Taber sugar beet factory through March 2032. Along with a Vancouver agreement reached in 2024, the company said the deals provide labor certainty across its production network.
Liquidity, dividends and trade outlook
Rogers Sugar reported trailing 12-month free cash flow of C$90 million, slightly higher than the prior year. The company said higher adjusted EBITDA and lower capital spending outside of LEAP supported the increase, partly offset by income-tax payment timing and higher interest costs.
At quarter-end, the company had drawn C$116 million on its revolving credit facility and had C$173 million in convertible debentures outstanding. It recently extended the revolving credit facility’s maturity from March 2030 to July 2031.
The board declared a quarterly common-share dividend of C$0.09 per share, payable on or before Oct. 21. The company said it has paid a quarterly dividend without interruption for more than 16 years.
Looking ahead, management said it expects solid overall fiscal 2026 results. Rogers Sugar said it assumes current trade dynamics will continue through the end of the fiscal year and that no significant adverse changes to the Canada-United States-Mexico Agreement will occur in the near term. The company said direct effects from trade conditions on its domestic sugar business have been limited so far.
About Rogers Sugar (TSE:RSI)
Rogers is a corporation established under the laws of Canada. The Corporation holds all of the common shares of Lantic and its administrative office is in Montréal, Québec. Lantic operates cane sugar refineries in Montréal, Québec, and Vancouver, British Columbia, as well as the only Canadian sugar beet processing facility in Taber, Alberta. Lantic also operates a distribution center in Toronto, Ontario. Lantic's sugar products are mainly marketed under the 'Lantic' trademark in Eastern Canada, and the 'Rogers' trademark in Western Canada and include granulated, icing, cube, yellow and brown sugars, liquid sugars, and specialty syrups.
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