Oreo owner Mondelez lifted forecast on some underlying metrics

Oreo owner Mondelez lifted forecast on some underlying metrics

  • Operating profit and net profit fall v H1 2014
  • Higher acquisition related and restructure charges recorded
  • Organic net revenue outlook raised on "strong YTD performance"

Mondelez International has reported a fall in first-half sales and profits hit by charges and the impact of foreign exchange, but lifted its forecasts for annual organic sales and underlying margins.

For the period ended 30 June, net profit fell 6.7% to US$739m.

Operating income fell 8.2% to $1.65bn. The Cadbury owner had seen an increase in asset impairment and exit costs during the first half from $97m to US$391m. The charges includes costs related to its move earlier in the year to buy US free-from business Enjoy Life Foods. It also pointed to integration costs from its integration of confectionery assets acquired from Vietnamese food group Kinh Do.

Mondelez's adjusted operating income reached $2.23bn, up from $2.11bn in the first six months of 2014. Adjusted net income was $1.45bn, compared to $1.36bn a year earlier.

Sales fell 9.7% to $15.4bn, with the Oreo and Trident maker pointing to the impact of foreign currency. On an organic basis, Mondelez's half-year sales hit $17.77bn, up from $17.08bn in the first half of 2014.

For the second half and full year, Mondelez has updated its organic net revenue forecast to growth of 3% from 2%. The company said the move reflected its "strong year-to-date performance".

The company expects its adjusted operating income margin to be around 14%, excluding a negative 20 to 30 basis point impact from stranded overhead costs. The costs are linked to Mondelez's move to place its coffee business into a joint venture. The company anticipates offsetting all stranded overhead costs by the end of 2015. It previously targeted an adjusted operating income margin of approximately 14%, including the coffee business.