Swedish confectioner Cloetta has booked a drop in first-quarter profits as “soft” markets hit sales and inhibited the group’s ability to pass cost increases on.
The company revealed today (16 May) that it racked up a net loss for the quarter of SEK119m (US$16.6m), down from a loss of SEK112m, despite lower income tax and interest charges.
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Operating profit amounted to SEK6m, down from SEK77m last year, while EBITA totalled SEK50m, down from SEK74m. Cloetta said the drop was mainly due to higher raw materials costs that are yet to be “fully compensated” by price increases.
Net sales for the first quarter rose 3.9% SEK1.0bn. However, “market softness” meant that underlying net sales – excluding the impact of divestment and acquisitions – fell 1.8%, the Swedish candy maker added.
The merger between Cloetta and Leaf was successfully completed last month and CEO Bengt Baron said management has now re-focused on driving growth and realising SEK210m in anticipated cost-savings.
“Our primary focus has been on completing the merger between Cloetta and Leaf,” Baron said. “Having completed the transaction, the organisation can once again focus entirely on driving the business and realising synergies made possible by the merger.”
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By GlobalDataClick here to see Cloetta’s first-quarter interim report.
