Image source: Shutterstock

Highlights

  • Driven by double-digit volume growth, SOY’s revenue in FY23 increased to USD 630.2 mn compared to USD 591.3 mn in FY22
  • EBITDA margin improved from 11.8% in FY22 to 13.1% in FY23
  • SOY is expecting higher revenues in FY 2024 driven by the beverages and snacks segment’s organic volume growth

SunOpta Inc. (TSX: SOY) is a multinational company focused on organic food, natural food, ingredient sourcing, and specialty foods.  The company develops and manufactures sustainable plant-based food and ingredients, offering non-GMO and organic food products. The product portfolio of SOY includes fruit-based snacks, plant-based beverages, plant-based ingredients, broth and stock, and packaged and bulk tea. It has a market cap of CAD 934.78mn.

As per the company, there was a double-digit growth in volume in the fourth quarter of 2023 along with a sharp acceleration from Q3 2023. Driven by volume growth, SOY’s revenue in FY23 increased to USD 630.2mn compared to USD 591.3mn in FY22.

Similarly, its EBITDA margin improved from 11.8% in FY22 to 13.1% in FY23.  Furthermore, SOY reported a stable growth in its gross margin as it increased from 16.3% in FY21 to 20.2% in FY23.

Image source: © 2024 Krish Capital Pty. Ltd., Source: Company Filing & EODHD/Others; Analysis: Kalkine Group

Recent business update

The company recently sold certain assets and liabilities of its frozen fruit business at a price amounting to approximately USD 141 million. The divestment is dependent on closing working capital adjustments. The divestment represents the company’s exit from the processing, packaging, and selling of individually quick frozen fruit for food service, retail and industrial applications.

Company outlook

The company is expecting higher revenues in FY 2024 driven by organic volume growth from the beverages and snacks categories. It also expects a better gross margin, driven by increased production, enhanced plant utilisation, reduced startup expenses, and improved operational efficiencies at its Midlothian, Texas, facility.

Top 10 Shareholders

Around 47.49% of the total shareholding in the company is held by the top ten shareholders. Oaktree Capital Management, L.P., and BlackRock Institutional Trust Company, N.A. hold maximum stake in the company at ~17.52% and ~4.55%, respectively.

Stock performance

The stock price of SOY has witnessed a downside of ~12.61% over the last 1 week and ~10.53% over the last 1 month. Moreover, the stock is trading higher than the average of its 52-week high price of CAD 10.97 and 52-week low price of CAD 3.82.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 7, 2024. The reference data in this report has been partly sourced from EODHD/Others.