George Weston Limited delivered “consistent financial and operating results with strong third quarter performance,” notes Galen G. Weston, chairman and CEO.
“Loblaw and Choice Properties demonstrated their ability to deliver consistent financial and operating results with strong third quarter performance," said Galen G. Weston, Chairman and CEO, George Weston Limited. "Our operating businesses are focused on serving the needs of customers and tenants on a day-to-day basis all while pursuing robust strategic agendas, positioning us well for continued success."
- Net earnings available to common shareholders of the company from continuing operations were $889 million, an increase of $651 million, or 273.5 per cent, primarily due to the favourable year-over-year net impact of adjusting items totalling $563 million.
- Adjusted net earnings available to common shareholders from continuing operations were $453 million, an increase of $88 million, or 24.1 per cent.
Richard Dufresne, Loblaw CFO, commented during a Loblaw third quarter earnings call on November 16, on Loblaw’s strong performance stating that “the pressure on cost is more significant than anything I've seen in my career. And it's translating to increased prices everywhere, particularly in food. This is a global issue facing all countries and all sectors, and policymakers around the world are doing what they can to bring it under control.
“When it comes to food prices, we know Canada is doing better than most with some of the lowest inflation in the G7. But that is no comfort for customers who are paying over 10 percent more for their essentials than they were just 12 months ago. At Loblaw, we're taking active measures to combat the pressure on behalf of our customers. And it's important to keep in mind that the levers available to us are limited. We are a food distributor. We buy goods from suppliers and then sell them to customers. So, we are largely dependent on what suppliers ask us to pay for their products. Suppliers determine the cost, and we determine the retail prices.”
George Weston says the favourable year-over-year net impact of adjusting items totalling $563 million ($3.87 per common share) was primarily due to:
- the favourable year-over-year impact of the fair value adjustment of the Trust Unit liability of $329 million ($2.27 per common share) as a result of the decrease in Choice Properties' unit price in the third quarter of 2022;
- the favourable year-over-year impact of the fair value adjustment on investment properties of $227 million ($1.58 per common share) primarily driven by Choice Properties, net of consolidation adjustments in Other and Intersegment; and
- the favourable year-over-year impact of the prior year fair value adjustment of the forward sale agreement of Loblaw common shares of $64 million ($0.43 per common share). The Company settled the net debt associated with the forward sale agreement in the fourth quarter of 2021;
partially offset by
- the unfavourable impact of the fair value adjustment on Choice Properties' investment in real estate securities of Allied Properties Real Estate Investment Trust ("Allied") of $64 million ($0.45 per common share) as a result of a decrease in Allied's Class B Unit price in the third quarter of 2022.
- The improvement in George Weston’s consolidated underlying operating performance of $88 million ($0.69 per common share) was primarily due to the favourable underlying operating performance of Loblaw.
- Diluted net earnings per common share from continuing operations also included the favourable impact of shares purchased for cancellation over the last 12 months ($0.12 per common share)
George Weston released its financial results following Loblaw’s negotiations with Calgary, Alta. distribution centre workers that broke off on November 21. Loblaw began to issue layoff notices after the negotiations broke off.