IRELAND: Greencore profits fall on currency exchange
Irish food group Greencore today (25 November) posted a 4.5% drop in annual operating profits due to currency fluctuations, rising costs and the global consumer slowdown.
The company booked opertaing profit of EUR77.3m (US$99.3m) for the year to 26 September. However, with the negative impact of currency exchange stripped out, Greencore profits grew 5.5%.
Sales increased 3.2% to EUR1.21bn, the company said. Again, on a constant-currency basis Greencore sales gains were more substantial, rising 13.3%.
Greencore's ingredients division delivered a "very strong performance" the company said. Divisional sales were up 29.9% on a constant-currency basis, rising to EUR414.1m, or by 24% after the impact of currency translation. Operating profit grew by 25.9% on a constant-currency basis, to EUR31.1m, and by 16.9% after the impact of currency translation.
However, the company's consumer foods business saw profits decrease 1.3% on a constant-currency basis, dipping to EUR50.1m, or by 12.3% after the impact of currency translation. Sales totalled EUR863.9m, down from EUR894.5m last year. However, the company emphasised that sales increased by 8.3% when currency fluctuations were stripped from the results.
Margins at the consumer foods unit were hit by rising energy and raw materials costs, which were partially offset by pricing actions.
"These results represent a resilient response to a challenging year which saw double-digit food inflation, a dramatic weakening in sterling [and] declining confidence in all consumer markets," CEO Patrick Coveney said.
The company has also had to deal with the fallout of a cost concealment issue at its mineral water business.
Nevertheless, Coveney remained upbeat on Greencore's long-term outlook.
"Our portfolio continues to work well in each of our core markets, we have a well-financed balance sheet and we have made excellent early progress in our new North America convenience foods business - a strategy that will in time transform the scale, shape and returns of our group," he said.
At the end of April, Greencore entered the US chilled foods market with the acquisition of Home Made Brand Foods (HMBF).
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