US: Profits from Post cereal unit down 30%, says Ralcorp
Profits from US cereal maker Post fell 30% in last three months of 2011, Ralcorp Holdings, the private-label group that has spun off the business, has revealed.
In its results for the first quarter of its new financial year, Ralcorp said operating profit from Post, which was still part of the company during the three months to the end of December, reached US$34.9m, down from $49.7m a year earlier.
Net sales from Post fell 3% to $214.4m and Ralcorp said profits from the division were also affected by higher spending on marketing, increased raw material costs and "unfavourable" manufacturing expenses as lower volumes meant its plants were under-used.
Ralcorp said volumes were down across most of the Post portfolio, with the exception of Great Grains, which saw volumes increase 13%.
The lower sales and profits from Post followed 12 months in which revenue and earnings from the business were lower.
In the year to 30 September, profits from Post dropped 7% to $206m on the back of a 3% fall in net sales to $953.8m. Ralcorp as a whole reported annual losses of $187m for that financial year after it recorded impairment charges on Post.
Ralcorp announced on Monday that the spin-off of Post had been completed at the end of last week, with shares in the branded cereal firm now trading on the New York Stock Exchange.
From the second quarter onwards, Ralcorp will report Post as a discontinued operation, it said yesterday (7 February).
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