SINGAPORE: Consumer-focused Petra upbeat after Q3 results
Petra's core branded consumer business recorded “strong” profit growth
Petra Foods, the Singapore confectioner, has reported higher third-quarter profits as it starts life as a consumer-facing business after selling its cocoa ingredients arm.
The company booked a 3.5% increase in underlying net profit from its consumer business to US$14.8m for the three months to the end of September.
In June, Petra completed the sale of its cocoa ingredients business to Barry Callebaut and is now focusing on consumer products.
Its reported third-quarter net profit was up 42.4% as the company lapped the third quarter of 2012 when the cocoa ingredients arm made a loss of $3.9m.
Losses from the cocoa ingredients business made this year before the June sale meat Petra reported a drop in nine-month earnings.
While the divestment of its cocoa arm has been completed, Petra said it is still required to consolidate the half year ended 30 June into its nine-month results. During the first half, the cocoa business was impacted by "significant" headwinds affecting cocoa ingredients suppliers globally, Petra said.
Petra posted a net profit of US$4.7m in the nine months to the end of September, compared to earnings of $42.6m a year earlier.
Over the first nine months of 2013, Petra said its core branded consumer business recorded "strong" profit growth of 9.7% to $43.7m. This was achieved on the back of 71.% increase in revenueto $379.9m.
The performance was driven by "dynamic" regional consumption, as well as "strong" own brand sales, Petra said, which reflected the "success" of the group's investments in innovation, brand-building initiatives, new product launches and enhanced sales and distribution capabilities.
Last month, it emerged Petra and Barry Callebaut were disputing the final price the Swiss chocolate giant will pay for the cocoa ingredients business.
The world's largest B2B chocolate group has applied for a discount of US$98m on the deal, which was struck last year and closed this summer for $860m.
Petra has rejected the claim, arguing it does not have a "proper or valid basis and/or have not been properly substantiated or justified".
Barry Callebaut said the two sides would now "apply the dispute resolution mechanism" included in the takeover contract.
Click here to view the full earnings release.
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