Rogers Sugar (TSE:RSI) reported higher earnings in its fiscal first quarter of 2026, with management pointing to strong execution, disciplined pricing, and favorable non-recurring and timing items that helped offset lower year-over-year revenue and sugar segment volume declines.
Quarterly results highlighted by higher EBITDA and earnings
President and CEO Mike Walton said the company delivered “strong earnings” despite an uncertain external backdrop that includes shifting global trade policy, tariff developments, and upcoming CUSMA negotiations. For the first quarter, Rogers Sugar posted consolidated Adjusted EBITDA of CAD 47 million, up 18% year-over-year, while Adjusted Net Earnings reached CAD 25 million, up 27%.
On cash generation, the company reported CAD 89 million of free cash flow over the trailing 12 months. Management said that figure was consistent with the prior year, but excluding timing differences in tax installment payments, free cash flow improved by more than CAD 11 million due to stronger operating performance and working capital control.
Revenue declined as raw sugar prices and sugar volumes fell
While profitability improved, Rogers Sugar’s revenue fell. JS said quarterly revenue was “just short of CAD 300 million,” down from CAD 331 million a year earlier. The reduction was attributed mainly to a lower average Raw No. 11 sugar price and lower sales volume in the sugar segment, partially offset by higher volumes in the maple segment.
Management emphasized that revenue and volume are not the primary drivers of the company’s strategy, with a stated focus on consistent profitability (Adjusted EBITDA) and free cash flow.
Sugar segment: lower volumes, but margins improved on pricing and one-time items
The sugar business remained the key earnings contributor, with JS noting it drives about 85% of the company’s profitability. Sugar sales volume totaled 175,000 metric tons, down by about 21,000 tons year-over-year. The company attributed much of the decline to lower export volumes, explaining that current market conditions do not favor refined sugar of Brazilian origin sold into the U.S. market.
Rogers Sugar also cited reduced industrial sales tied to a non-recurring production issue at a key customer that impacted the last few weeks of fiscal Q4 2025 and continued into Q1 2026. On the call, management said the issue did not extend into Q2 and has been resolved, though the company does not expect the lost volume to be fully recaptured because the customer’s plants run at capacity.
Despite the revenue and volume headwinds, profitability improved. Sugar segment revenue declined about 15% to CAD 226 million, but the company reported higher margins, with Adjusted Gross Margin per ton rising to CAD 304, up CAD 79 from the prior year.
JS said the margin improvement was driven by a combination of factors, including:
- Favorable timing variances and non-recurring items linked to procurement activities, raw sugar freight, and major maintenance programs.
- Higher sales margin tied to the company’s disciplined pricing strategy.
- A mix impact from reduced export volumes (management described export as generally lower contribution margin).
In the Q&A, management provided additional detail on the non-recurring and timing benefits. JS indicated that an CAD 8 million impact included both timing and one-time elements, with roughly half expected to shift into Q2 (including an annual shutdown that occurred in the first week of Q2 rather than late Q1) and roughly half considered non-recurring. Separately, management discussed CAD 4.5 million of non-recurring gains, including compensation related to prior-year issues such as sand contamination on vessels and freight pricing adjustments; JS characterized those gains as one-time.
For the quarter, sugar segment Adjusted EBITDA was CAD 41 million, up CAD 7 million year-over-year. Distribution costs increased slightly due to an “unexpected adjustment” to the supply chain, and administration expenses were also slightly higher, reflecting compensation and benefit increases. Management also cited a specific issue involving technical problems with rail cars that required some customers to pick up product in Montreal instead of Toronto, with the company compensating customers; the rail cars were fixed and the issue resolved.
Maple segment: higher volumes and steady margin recovery
Rogers Sugar’s maple segment posted stronger sales on rising demand for maple syrup and related products. Maple revenue increased 8% to CAD 72 million, driven by higher sales volume. Adjusted EBITDA for maple was CAD 5.8 million, slightly higher than the prior year.
Sales volume increased 8%, supported by incremental demand from established customers. The segment’s Adjusted Gross Margin percentage was 10.6%, which management said was consistent with expectations and reflected a more consistent product mix. Executives noted that margins dipped below 10% in the second half of 2025 due to product mix challenges, but said sourcing and procurement activity has strengthened, including holding syrup inventory (including purchases through the PPAQ reserve) to better support sales needs.
LEAP project update, financing actions, and 2026 outlook
Walton said the company continued to make progress on the LEAP expansion project in Montreal, including facility upgrades, electrical connections, and integration of new refining technology. Rogers Sugar continues to target a startup in the first half of 2027. Management said the cost to complete is unchanged and reiterated a project cost range of CAD 280 million to CAD 300 million. The company spent CAD 25 million on capital expenditures in the quarter, primarily related to LEAP.
JS said Rogers Sugar enhanced financial flexibility in January through the issuance of Series 9 convertible debentures, following the Series 8 issuance last year. He said this completed the refinancing of Series 6 and Series 7 debentures that matured in 2024 and 2025, and that the company’s balance sheet remains strong with available credit and free cash flow. Management said the company maintained its quarterly dividend.
For the remainder of fiscal 2026, management offered segment-specific expectations:
- Sugar: Forecast full-year sales volume of around 750,000 metric tons, at the lower end of prior guidance and about 4% below 2025, primarily due to lower-margin export sales affected by trade conditions for Brazilian-origin refined sugar. Domestic demand is expected to be stable.
- Beet sugar: The Taber beet harvest was completed in November, with processing expected to finish by the end of the month; the company expects about 100,000 metric tons of beet sugar from the 2025 crop, consistent with earlier expectations.
- Costs: Production and maintenance costs, distribution costs, and administration and selling expenses are expected to edge slightly higher in 2026, with administration and selling also reflecting incremental costs associated with a planned Canadian International Trade Tribunal review in the second half of 2026. Interest costs are expected to rise as the company accesses funding for LEAP.
- Maple: Expected 2026 sales volume of 56 million pounds, up 5% from last year, supported by global demand and a favorable 2025 crop, with the 2026 crop expected to meet any excess needs.
In discussing trade and tariffs, Walton said the direct impact has been minimal so far, though the company remains prepared to adjust. He also characterized the CUSMA negotiation environment as uncertain, while noting that the U.S. sugar market is structurally deficit and arguing that meaningful manufacturing shifts would take time. Management said it would continue advocating for the industry and maintaining operational flexibility.
About Rogers Sugar (TSE:RSI)
Rogers Sugar Inc is a Canada based sugar producing company. The company along with its subsidiaries is principally engaged in refining, packaging, and marketing sugar products. The products offered by the company include iced tea mix, stevia, yellow sugar, Cubes, Coconut sugar, and other related sugar products. It operates in the following reportable segments: Sugar and Maple products, of which the majority of the revenue comes from sugar products. Its geographical segments include Canada, which is the key revenue generator; the United States; Europe; and others.
