Rogers Sugar Inc. (TSX:RSI) recently reported its fourth-quarter earnings numbers, which were highlighted by a rise in adjusted profitability despite a dip in overall revenue. The company continues to advance its massive LEAP expansion project in Montreal, though the timeline for full service has been adjusted.
In Q4, revenue fell to $322.7 million compared to $333.0 million a year ago, primarily due to a drop in sugar sales volumes to 195,952 tonnes (a drop of over 4%). This decline was linked to unexpected issues with a large industrial customer in Montreal and the loss of accounts in Western Canada. However, the company demonstrated operational resilience as adjusted EBITDA climbed by 3% to $39.5 million. The maple products segment proved vital, seeing sales volumes jump to nearly 13 million pounds due to stronger demand.
Management remains focused on the long-term LEAP project aimed at expanding refining capacity in Eastern Canada. The estimated cost for this initiative holds steady between $280 million and $300 million, though complex installation work has pushed the anticipated in-service date to the first half of 2027. Despite these heavy capital expenditures, the company maintained its quarterly dividend of 9 cents per share, which currently yields 5.6%.
The stock is up about 5% year to date and trades at a reasonable valuation of less than 13 times trailing earnings. It could make for a solid investment to buy and hold given its attractive valuation and high dividend. However, investors should closely watch future earnings numbers to ensure that the dividend remains well supported by its financials. It’s safe for now, but if sales continue to decline, the high payout may be a problem.
