The chairman of Australian food manufacturer Goodman Fielder has warned that the company “continues to confront commodity cost pressures and significant price volatility”.
In a letter sent to shareholders yesterday (7 April), Max Ould said the breads-to-spreads manufacturer said its “challenge” will be to recover the increases in the marketplace.
However, he added that it will be “even more difficult” for Goodman Fielder to recover its cost increases “given the extreme level of competition and price discounting that is presently occurring in the retail sector”.
Ould said the strong Australian dollar will also continue to depress the company’s earnings from outside Australia.
Updating shareholders on the company’s search to find a successor to CEO Peter Margin, Ould said that Margin said he “wishes to depart at the end of April”. Ould hopes to be in a position to make announcement “soon”, but he added that if there is a gap between Margin’s departure and the arrival of his successor, Ould will manage the company as executive chairman in the interim.
Ould said the manufacturer’s first-half results have been “satisfactory in a very difficult trading environment”. For the half ended 31 December, net profit was up 3.1% to A$93.1m, despite revenue being down by 2.2% to A$1.3bn.
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“The result is less than it might have been as a result of the strong Australian dollar, which reduced our earnings from New Zealand and Asia Pacific when they were translated into Australian currency,” said Ould.
Shares in the manufacturer were down 1.6% to A$1.2 a share at the Australian Stock Market’s close today (8 April).