Cadbury and Oreo owner Mondelez International has reported lower half-year profits as it ups investment in emerging markets.
The snacks giant booked a 35.7% fall in net earnings to US$1.19bn for the six months to the end of June.
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Operating income was 7.7% lower at $1.7bn, while adjusted operating income, which excludes one-off items, was down 6.8%.
Mondelez said it was investing in sales and distribution in emerging markets. Those markets will also see higher spending on advertising, which Mondelez also plans to up in Europe. The company said the expenditure would “support stronger growth in the second half and 2014”.
Net revenue inched up 0.8% to $17.3bn. On an organic basis, net revenue increased 3.8% thanks to higher volumes and pricing.
Mondelez, which today also announced plans to build a new production plant in India, said “capacity constraints in certain key markets” hit revenue by 0.3 percentage points.
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By GlobalDataNevertheless, revenue from its emerging markets was up 9.5%, with the BRIC markets reporting “double-digit gains”. Sales in North America were lower. Revenue in Europe fell, although Mondelez cited the impact of foreign exchange.
Second-quarter earnings per share fell 41.4% to $0.34. However, stripping out one-off items, earnings were $0.37 a share, higher than the $0.34 a share forecast in a Reuters poll.
Mondelez also upped its dividend and said it would buy back more shares.
Click here for the full statement and click here to read more insight into Mondelez’s thoughts on its emerging markets performance.
