Associated British Foods has reported a 4% increase in half-year profits from its grocery division despite pressure on its bakery businesses in the UK and Australia leading to lower sales from the division.
Sales for the grocery segment fell 4% to GBP1.5bn (US$2.3bn), which ABF said was "largely due to commodity price deflation".
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Competition in the UK bakery market saw the profitability of ABF's Allied Bakeries business fall during the 24 weeks to 28 February.
The company also said it was a "disappointing period" for its George Weston Foods arm in Australia, with competition on price and heavy promotional activity among retailers hitting profits.
Divisional operating profit increased to GBP128m, up from GBP123m a year earlier. ABF pointed to stronger sales and earnings from its Twinings Ovaltine unit. It said UK unit Jordans Ryvita is "on track", with sales of Jordans cereals up.
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In North America, the company saw "strong volume growth" from Mazola cooking oil.
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By GlobalDataAt a group level, a GBP3m loss from ABF's business-to-business AB Sugar unit hit company adjusted operating profit, which fell 5% to GBP474m. Sales increased 1% to GBP6.23bn.
