Goodman Fielder made a net loss of A$166.7m over the year

Goodman Fielder made a net loss of A$166.7m over the year

Goodman Fielder has reported a slump in annual profits after raw-material costs and lower sales hit earnings from the Australian food maker's bakery and dairy divisions.

The company yesterday (29 August) booked a 17.3% fall in underlying net profit to A$133.3m (US$142.1m) for the year to the end of June.

Earlier this month, Goodman Fielder recorded a A$300m impairment charge from its bakery operations due to "weak trading" during the second half of the year. Including the impairment cost, Goodman Fielder made a net loss of A$166.7m over the year. 

EBITDA was down 7.4% at A$356.7m, with revenue falling 3.9% to A$2.56bn.

Goodman Fielder recorded lower EBITDA from its bakery and dairy units. Earnings from its bakery division dropped 20.8% as sales slid 4% and the company battled higher commodity costs and a retail market with "deep discounting and a resurgence of private-label products".

The company upped prices on its bakery brands but saw its retail customers in Australia cut prices on private-label products. Goodman Fielder also lost an own-label bakery contract, which hit volumes.

EBITDA from Goodman Fielder's dairy division fell 15.3% on the back of a 4.2% decrease in sales. The company said raw milk prices increased by 50% during the year and, although it secured some price increases in the first half of the year, it said it became "more difficult" to recover increasing costs in the second half.

EBITDA from its home ingredients unit dipped 0.4%, although earnings from its operations in Asia Pacific were up 1.2%.

CEO Chris Delaney, who joined the business in June, has started a three-year "strategic review" to look at Goodman Fielder's operations. The company said Delaney's review, combined with current trading conditions, meant it would not provide forecasts for the next financial year. It plans to provide an update at its AGM on 24 November.

Click here for the full statement from Goodman Fielder.