SWEDEN: Weak Q2 hits candy firm Cloetta's H1
A second-quarter loss has led to falling first-half earnings at Sweden-based confectioner Cloetta.
The company said today (23 March) that it made an after-tax loss of SEK17m (US$2.7m) in the three months to 28 February amid falling sales and the impact of rising raw-material costs. A year earlier, Cloetta made a loss of SEK7m.
The firm's operating losses also widened, from SEK7m in last year's second quarter to SEK23m this year.
Cloetta saw its net sales fall 10% in the second quarter to SEK224m. The company cited Nielsen data that said the business had lost market share during December and January. While confectionery sales slipped 1.5%, Cloetta's fell by 3%.
The lower sales, a decrease in products made on contract and raw-material costs put pressure on margins, Cloetta said.
CEO Curt Petri said that Cloetta's "strong" brands had put in a "good performance" but said lower sales of pick-and-mix and seasonal products had hit the business.
He added: "We are now working with an increased focus on efficiency-enhancement programmes throughout the value chain. Sales and marketing activities are being optimised and we are analysing the entire company to ensure the conditions to sell and produce our products efficiently. There is also a need to raise our prices for certain products."
Over the first six months of Cloetta's financial year, the company's after-tax profit stood at SEK15m, compared to SEK25m a year earlier. Its operating profit reached SEK22m, down from SEK37m in the previous year. Sales fell 4.1% to SEK557m.
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