Earnings call transcript: Rogers Sugar Q3 2025 sees revenue growth

Rogers Sugar Inc. reported its financial results for the third quarter of 2025, revealing an increase in revenue and adjusted EBITDA. The company achieved consolidated revenues of $314 million, surpassing last year’s $309 million. Adjusted net income rose to $17 million, translating to $0.13 per share, exceeding the EPS forecast of $0.1067. According to InvestingPro data, the company maintains strong financial health with a "GREAT" overall score and has maintained dividend payments for 28 consecutive years. Despite these positive results, the stock experienced a slight dip of 0.17% in the latest trading session, closing at $5.71.

Key Takeaways

• Rogers Sugar’s Q3 revenue rose to $314 million, marking an increase from the previous year.
• Adjusted EBITDA grew by 8%, indicating strong operational performance.
• The company exceeded EPS forecasts, achieving $0.13 per share.
• Stock price slightly declined by 0.17% despite positive earnings.
• The company continues to expand its sugar refining capacity through the LEAP project.

Company Performance

Rogers Sugar Inc. demonstrated robust performance in the third quarter of 2025, with revenues climbing to $314 million from $309 million in the same period last year. The company’s adjusted EBITDA saw an 8% increase, reaching $37 million. Year-to-date adjusted EBITDA also showed a healthy growth of 7%, amounting to $111 million. InvestingPro analysis reveals a solid current ratio of 1.87, indicating strong liquidity, while maintaining a sustainable debt-to-equity ratio of 0.05. This performance reflects the company’s strong market position and successful execution of its strategic initiatives.

Financial Highlights

• Revenue: $314 million, up from $309 million last year
• Earnings per share: $0.13, exceeding the forecast of $0.1067
• Adjusted EBITDA: $37 million, an 8% increase year-over-year
• Free cash flow: $88 million, an 18% growth over the trailing 12 months

Earnings vs. Forecast

Rogers Sugar’s earnings per share of $0.13 surpassed the forecasted $0.1067, marking a notable positive surprise. This represents a significant beat of approximately 21.8% over expectations, highlighting the company’s ability to exceed market predictions.

Market Reaction

Despite the earnings beat, Rogers Sugar’s stock experienced a minor decline of 0.17%, closing at $5.71. This movement contrasts with the broader market trends and may reflect investor caution or profit-taking following the earnings release. The stock remains within its 52-week range, with a high of $6.47 and a low of $5.22. InvestingPro subscribers have access to 10+ additional ProTips and comprehensive analysis, including detailed valuation metrics and growth projections. The stock currently shows low price volatility, making it an interesting consideration for value investors seeking stable returns.

Outlook & Guidance

Looking ahead, Rogers Sugar remains optimistic about its growth prospects. The company projects a 4% increase in sugar sales volume for 2025, targeting 785,000 metric tons. The maple segment is expected to grow by 6.5%. Capital expenditures, excluding the LEAP project, are forecasted at $25-30 million, with an additional $90 million allocated for LEAP in fiscal 2025. Analysts maintain a positive outlook, with an average consensus recommendation of 1.56 (where 1 is Strong Buy), suggesting confidence in the company’s growth strategy. Get deeper insights into Rogers Sugar’s growth potential and access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

Mike Walton, President and CEO, emphasized the company’s resilience, stating, "We are in a very resilient business." He also highlighted the strategic importance of the Rogers Refined initiative, noting, "Rogers Refined is not just a financial plan. It’s a new way of operating." Walton further remarked on the company’s strong EBITDA performance: "The $111 million in EBITDA we generated in 2025 is more than what we generated in any full year prior to 2023."

Risks and Challenges

• Potential volatility in export sales due to tariff uncertainties.
• Increased administrative expenses, partly due to non-recurring severance costs.
• Ongoing capital expenditures for the LEAP project may impact short-term cash flow.
• Global market conditions and competition in the sweeteners industry.

Q&A

During the earnings call, analysts inquired about the timing of sugar volume increases and the rationale behind the LEAP project spending. The interest in natural sweeteners from beverage manufacturers was also discussed, reflecting broader industry trends and consumer preferences.

Full transcript - Rogers Sugar Inc. (RSI) Q3 2025:

Conference Call Operator: Good morning, ladies and gentlemen. Welcome to the Rogers Sugar Inc. Analyst Call August 12 Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session.

Before we begin, please be reminded that today’s call may include forward looking statements regarding our future operations and expectations. Such statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied today. Please also note that we may refer to some non IFRS measures in our call. Please refer to the forward looking disclaimers and non IFRS measure definitions included in our public filings with the Securities Commission for more information on these items. A replay of this call will be available later today.

The replay numbers and passcodes have been provided in our press release, and an archived recording of this call will also be available on our website. I’ll now turn the call over to Mike Walton, President and CEO of Rogers Sugar. Please go ahead.

Mike Walton, President and CEO, Rogers Sugar Inc.: Thank you, operator, and good morning, everyone. Thank you all for joining us today. I’ll begin the call today with a discussion of market conditions in our sugar and maple markets and then go into some highlights of our third quarter. I will also update you on our LEAP project, which continues to move ahead as we prepare to meet the growing needs of our sugar customers over the long term. Then I will turn it over to JS, our Chief Financial Officer, for a detailed review of our financial results.

I will conclude with an outlook for the remainder of fiscal twenty twenty five. As usual, we have an investor’s presentation accompanying this call. This presentation is available on the Investors section of our website if you want to follow along. I’ll begin by stating that we are in a very resilient business. On our last quarterly call, I shared with you that the impact of changing expectations around trade and tariffs had very little impact on our business and that of our customers.

It is worth noting that much of what we and our customers export to The United States is administered under the KUSMA, which has not been impacted by the recent announcements on tariffs. Obviously, we cannot predict the future, but we anticipate that this will continue to be the case going forward. While the headlines may point to a lot of volatility and discussions around tariffs on goods exported to The US, the reality is that our business performance remains consistent with our stated expectations. We are closely monitoring this evolving situation and engaging regularly with the key stakeholders. We are committed to being timely and transparent in our disclosures to the market around this topic.

As of today, we see no reason to change our outlook for steady underlying demand for our sweeteners in the market, And we believe our Rogers refined strategy has put us on the right path to meet that demand in the years ahead. That conviction is well supported by the strong results of our most recent quarter. I am very pleased with our operating and financial performance. Sales volumes in our Sugar segment this quarter increased by about 3% over the same period last year and by more than 5% for the first nine months of the year. This is consistent with our assessment of stable demand growth in this segment.

Our Maple segment continues to deliver strong results underpinned by the growth in demand we’ve seen globally since the 2024. Maple sales volumes increased by 20% in the quarter and 15% for the year to date, mainly from incremental orders by our existing customers. As the largest exporter of maple products in the world, we are pleased that consumers are appreciating the unique flavor of this all natural sweetener, and we want to continue to innovate with new products to meet that demand. Speaking of our maple business, we really recently decided to align the name of our maple segment to the rest of our business. Going forward, our maple company will be known as Atlantic Maple Incorporated, replacing our former name of the Maple Treat Corporation.

Different names, but still the same amazing products delivered to our customers. It brings the maple business closer to our roots and creates a more unified presence here in Canada and beyond our borders. Our growth and success are products of our focus on executing on our strategy of delivering value to our customers and our shareholders. The elements of this strategy are set out in our Rogers refined framework. They are modernizing and growing in our sugar business, driving profitability in Maple, maintaining a strong balance sheet, and advancing our ESG program.

It is clear that the steps we have taken to deliver on each of these pillars have made us a stronger and more resilient organization. Rogers Refined is not just a financial plan. It’s a new way of operating where everyone knows what they need to do when they come to work. With our customers facing chain changing trade conditions, it’s not enough to be resilient. We have to pivot.

That means reacting quickly, capitalizing on opportunities, and mitigating risks. Times like these put that model to the test, and I’m happy to say that we came through. We are on the best footing in our history, in an excellent position to continue to meet the needs of our customers and deliver consistent, profitable, and sustainable growth for our shareholders. Now I’ll touch on some high level measure of our performance this quarter. J.

S. Will discuss it in more detail in his presentation. Our consolidated adjusted EBITDA for the quarter increased by 8% to almost $37,000,000 This represents an increase of more than $2,000,000 over a very strong third quarter last year. For the year to date, consolidated adjusted EBITDA was $111,000,000 an increase of 7% over the prior year. To put that in perspective, the $111,000,000 in EBITDA we generated in the 2025 is more than what we generated in any full year prior to 2023.

That’s how much this business has improved over the last few years, and we took advantage of favorable market dynamics and optimized our production facilities. Our strong performance this quarter was led by our Sugar segment, which showed improved profitability, especially in our domestic market. We continue to see favorable demand conditions in the market for refined sugar, Although the mix of that demand can shift from one quarter to another, our strategy is to anticipate those shifts and pivot as necessary to provide our customers with the sugar they need in the form they need it. Our Maple segment continues to show solid profitability, this quarter from strong demand. Although it did not match the record financial results of the previous quarter, it continues to reflect the recovery in global demand that began nearly two years ago and the productivity improvements we implemented over the same period.

Our results this quarter reflect the strong market conditions in both our business segments, combined with our efforts to deliver on the pillars of our Rogers refined framework. Now turning to our Eastern Sugar expansion project, the construction phase of our LEAP project is progressing as planned. During the second quarter, we made the decision to focus our efforts on the Montreal portion of the project. This is the location of the incremental 100,000 metric tons of sugar refining capacity that we plan to bring into service to serve the Eastern Market. This quarter, we scaled back our work on the logistics capacity increase in Toronto to align the completion date with the in service date of our production expansion in Montreal.

And we reassigned some of those resources from Toronto to the primary construction site in Montreal. At our Montreal location, we completed the construction of the new electrical room, advanced the refurbishment of the main expansion building, and began the installation of sugar refining equipment and logistics infrastructure. As we move ahead, activity will continue to be busy. In fact, by fall, we will have double the construction workforce on-site. It is great to see some of the new production equipment being delivered and installed in our refurbished facility in Montreal.

Our estimate for the total cost to complete LEAP project remains consistent with our year end update, ranging between $280,000,000 and $300,000,000 We continue to believe that the LEAP project is on track to produce refined sugar by the 2026. The incremental capacity from LEAP will be vital to meet industry demand in the years ahead. The last twelve months have seen food manufacturers announce various capacity expansions that have yet to come online. This last quarter, one more announcement was added to that pipeline. This supports our assessment of strong underlying long term demand growth for refined sugar.

This additional capacity gives food manufacturers the confidence that we will be there to support them in their own plans for growth. We are very excited by the many business opportunities and challenges that we see ahead of us in the near future. Now I’ll turn the call over to J. S. For a discussion of our financials.

J.S., Chief Financial Officer, Rogers Sugar Inc.: Thank you, Mike, and good morning, everyone. I will begin my financial remarks on Slide 10. To begin, I would like to remind our audience that we present our financial results on an adjusted basis as we believe this is more representative of our business. This is consistent with the presentation in our MD and A. The adjustments are non cash and consist mainly of transactions related to hedging activities.

All the adjustments are described and reconciled in our MD and A. Consolidated revenues in the quarter were $314,000,000 compared with $3.00 $9,000,000 in the third quarter last year. The increase was mainly related to higher volumes sold in our Maple segment. Revenues from the Sugar segment were down 2.5% in the quarter due to the lower average commodity price for raw sugar, which has marginal impact on overall profitability. Sales volume for the Sugar segment were up almost 3% for that period.

For the first nine months of twenty twenty five, our revenues grew by about 7% with strong contributions from both our Sugar and Maple segments. Consolidated adjusted EBITDA for the third quarter increased by over CAD2 million or 8% year over year to just under CAD37 million. This strong profitability continues to underpin our efforts to fortify our balance sheet. Our free cash flow for the trailing twelve months grew by 18% to CAD88 million. This strong free cash flow allows us to execute on our strategy, including funding our growth, investing in operational improvements and maintaining a strong balance sheet.

Now let’s have a look to the individual business segments beginning with Sugar. As mentioned earlier, revenues for the Sugar segment declined by about 2.5% to $246,000,000 largely driven by a lower price for raw number 11 sugar, which as you know, is a pass through for us. Volume growth of about 3% was driven by a rebound in export demand, partially offset by reduced demand for liquid sugar. Adjusted gross margin per ton of sugar was $243 an increase of $18 per ton compared to the third quarter last year. The main drivers of this increase were a favorable sales mix along with market based incremental pricing to customers.

Our maintenance costs were in line with expectations and with the prior period quarter as the increase we’ve seen in the 2025 was non recurring. We noted an increase of just over $2,000,000 in administrative and selling expenditures in the 2025 compared to the same period last year associated mainly with non recurring severance costs. Overall, the Sugar segment delivered strong results in the third quarter, showing an increase of 8% or almost $2,400,000 in adjusted EBITDA. On the Maple side, financial results remained strong, although lower than the record adjusted EBITDA in the second quarter. Our Maple segment accounted for about 22 of consolidated revenues in the quarter and 11% of consolidated adjusted EBITDA.

Revenues in our Maple segment increased by 19% to more than $67,000,000 in the third quarter. Growth in Maple revenues was driven by a 21% increase in volume driven by incremental orders from existing customers. Adjusted gross margin in Maple decreased to 8.2% or $5,500,000 compared with 10.4% or $5,800,000 in the same period last year. The current quarter’s margin was unusually low compared to our expectations. There were two main contributors to the year over year decrease.

The first was an unfavorable customer mix during the quarter due to timing as the incremental volume was sold to export customers at the lower margin contribution per unit. The second was the impact of higher cost for the purchase of syrup compared with last year as we benefited from lower cost purchases in 2024. We anticipate our adjusted gross margin in Maple to be in line with our expectations of approximately 10% going forward. Adjusted EBITDA in Maple amounted to $4,000,000 in the third quarter, a decrease of $300,000 from last year’s third quarter. We continue to invest in operating efficiencies in our Maple segment and expect this segment to be a strong contributor to our overall profitability in 2025.

Both of our business segments continue to support our strong financial performance in 2025. Adjusted net income for the quarter increased to $17,000,000 or $0.13 per share. For this year to date, adjusted net income was $53,000,000 or $0.41 per share, both in line with the same period last year. CapEx for the quarter was about $30,000,000 of which $25,000,000 was related to our LEAP project. We currently expect to spend approximately $90,000,000 on the LEAP project for fiscal twenty twenty five.

We established a funding plan for LEAP to ensure we had access to capital well in advance of our standing needs. This allows us the flexibility to adjust to conditions in the capital markets while preserving our balance sheet strength. The plan includes the equity issue completed in 2024, access to our revolving line of credit, loans from Investissement Quebec and our own growing level of internally generated capital. Following the end of the third quarter, the seven Series debentures matured and were repaid in cash as planned. We are monitoring conditions in the financial markets as we review our future funding needs.

Having a healthy balance sheet and strong cash flow from operations means we can take advantage of funding opportunities as they arise in accordance with our business objectives. It also means we are able to deliver a stable, well covered dividend to our shareholders. I’m pleased to announce that we are maintaining our common share dividend at $09 per share this quarter.

Mike Walton, President and CEO, Rogers Sugar Inc.: We are

J.S., Chief Financial Officer, Rogers Sugar Inc.: happy to be in a position to maintain a healthy dividend while still investing for growth and preserving our balance sheet strength. With that, I’ll turn the call back over to Mike to provide a summary and outlook for 2025.

Mike Walton, President and CEO, Rogers Sugar Inc.: Thank you, J. S. The results we are reporting in recent quarters represent a step change in our profitability and execution relative to where we were just a few years ago to a level that we believe is sustainable. We remain on track to deliver consistent financial performance for 2025. I’ll talk about our outlook for the year in more detail.

Starting with sugar, the strength in demand and pricing that drove our results for the first nine months is expected to continue for the rest of fiscal twenty twenty five. Our outlook for sales volume for 2025 is unchanged at 785,000 metric tons. That is an increase of about 4% year over year, recalling that last year’s volume was reduced by the labor disruption in Vancouver for the first two quarters. Our outlook reflects some pockets of volatility in export sales related to the lingering uncertainty around potential for U. S.

Tariffs. In addition, there may be some softness in demand from a couple of our industrial customers associated with price increases for other related ingredients such as cocoa. Our plan is to continue to prioritize domestic sales in fiscal twenty twenty five and to take advantage of strategic export sales opportunities with the objective of consistently meeting our commitments to our customers. At our Taber facility, last quarter, we reported that the harvest season delivered a lower than expected volume of 100,000 metric tons of beech sugar. The lower yield was due to unfavorable winter weather conditions affecting the quality of harvest at beech in storage.

Next year’s crop is in the ground with 22,500 acres seeded under the new five year agreement with the Alberta sugar beet growers signed in May. Overall production costs and maintenance costs will be moderately higher for the full year. This outlook takes into account the impact of market based increases in operating costs as well as the non reoccurring maintenance charges in the second quarter related to equipment issues in Montreal. We expect a strong year in our Maple segment, consistent with the recovery in this segment in 2024 and in the first nine months of 2025. We are looking at expected volume growth of approximately 3,000,000 pounds for the year.

This represents a year over year growth rate of about 6.5%. The expectations for both our Sugar and Maple segments reflect our best assessment of current market conditions and are subject to change with the evolving trade situation. Looking at our CapEx plans, we continue to expect our CapEx spend to fall between 25,000,000 and $30,000,000 for the year across our business segments, excluding the expenditures related to the LEAP project. This will be an active year for LEAP. We continue to plan and execute our reconstruction work while maintaining normal refinery operations, which is challenging and requires great coordination.

From the very beginning, we plan this project to proceed alongside our existing operations to ensure that our customers continue to get the sugar they need when they need it. That adds time and costs, but it was the right way to go. As you heard from JS, the capital spend is manageable within the financing financing plans we put in place in 2024. In summary, this was another solid quarter on our way to a solid year. While our business has not seen a material impact for potential tariff action, we are mindful that the situation is continually evolving.

Any future tariffs could have a significant financial impact to our business depending on the magnitude and duration of the tariffs as well as on any potential countermeasures. Our strategy has been twofold. We will monitor these developments and engage with stakeholders to inform our actions. Meanwhile, we are fortifying our company to meet any challenges from a position of strength. That means a strong focus on meeting the needs of our customers today and in in the future as we move ahead with our LEAP project.

It means a strong commitment to safety in our workplace and continuous improvement in our operations. It means being driven to manage costs and to ensure we remain competitive in the markets we serve. We have an executive management team of six with over one hundred and twenty five years of combined experience in the global sugar and maple businesses. This experienced team is focused on serving our customers and delivering on the pillars of our Rogers refined plan. And as you heard from JS, it includes the financial strength that comes from a prudent balance sheet and robust financial performance that will support us as we grow.

Before we take your questions, I’d like to draw your attention to our 2024 ESG report we published in June. It contains a lot of information on our actions to support of environmental stewardship, sustainable business practices, and community impact. ESG is the pillar of our Rogers refined framework. We have made a lot of progress in these initiatives in the last few years, and I think you will find the report to be a worthwhile read. Speaking for our management team, I am grateful to our employees across all sites for their unwavering effort and to our customers for their ongoing support and partnership.

And, J. S, and I thank you for joining us on the call today and for your interest in Rogers Sugar. I’ll now ask the operator to poll for questions.

Conference Call Operator: Thank you. And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press the star followed by the number one on your telephone keypad. If you’re using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press the star followed by the number two.

One moment, please, for your first question. And your first question comes from the line of Bea Fabrero with Scotiabank. Please go ahead.

Bea Fabrero, Analyst, Scotiabank: Hi. Good morning. Thanks for taking my question. So sugar volumes were better than expected this quarter, but the full year guide has not been revised. Is this quarter a seasonally stronger quarter, or is there anything that we need to be aware of as to the fourth quarter?

J.S., Chief Financial Officer, Rogers Sugar Inc.: Hi. It’s JSPR here. No. I think it’s more a question of timing. This is not our from a volume standpoint, the third quarter is is not in the top two quarter, which are usually our first and fourth quarter.

But it was mainly a question of timing. There’s no specific trends here.

Bea Fabrero, Analyst, Scotiabank: Okay. And another question on the LEAP spending. The outlook for this year has been increased from 79,000,000 to 90. I remember this was a decrease last quarter due to the refocus on Montreal. Can you provide more details or walk us through this increase?

J.S., Chief Financial Officer, Rogers Sugar Inc.: Yeah. And and the main reason for the increase is arrival of equipment. And we have equipment coming from Europe, so sometime it’s not as easy to predict that when the equipment will arrive. And so, it’s mainly just a a timing difference in our spending. So, the overall estimate for cost of LEAP has not changed.

Bea Fabrero, Analyst, Scotiabank: Okay. Thank you. And one last for me. There’s been increased media reports on major beverage brands using cane sugar instead of high fructose corn syrup. Is this affecting any conversations you’re having with your customers?

Mike Walton, President and CEO, Rogers Sugar Inc.: That’s a great question. We were anticipating that. It’s Mike speaking. Yeah. It’s great when, when consumers and and and manufacturers are talking about more uses of natural, sweeteners like soup sugar.

And then, of course, it creates some discussion, but we haven’t seen anything meaningful at this point to come towards us as in commercializing anything. But the conversation is certainly interesting to have.

Bea Fabrero, Analyst, Scotiabank: Okay. Thank you.

J.S., Chief Financial Officer, Rogers Sugar Inc.: Thank you. Thank you.

Conference Call Operator: And once again, if you would like to ask a question, simply press star one on your telephone keypad.

J.S., Chief Financial Officer, Rogers Sugar Inc.: And

Conference Call Operator: I am showing no further questions at this time. I would like to turn it back to Mike Wilson for further remarks.

Mike Walton, President and CEO, Rogers Sugar Inc.: Everyone for joining us today. It’s certainly an exciting time. And as you can see in the track record of the last, 15 quarters, this is a new company with a new energy and a new purpose, and it couldn’t have come at a better time. And we look forward to updating you at the next quarter. Thank you.

Conference Call Operator: Thank you, presenters. And ladies and gentlemen, this concludes today’s conference call. Thank you for attending. You may now disconnect.

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