Bakkavor has witnessed the downward trend in its earnings continue into the third quarter as restructuring costs, falling margins and a tough economic environment continued to impact the business.

EBITDA fell 24% during the first nine months of the year, to GBP87.9m (US$144m), despite a 10% rise in turnover to GBP1.2bn. The EBITDA decline accelerated slightly in the third quarter, falling 26% to GBP29.4m.

During the nine-month period, restructuring costs totalled GBP4.8m, GBP1.7m of which was booked in Q3. EBITDA margin totalled 7.3%, the company revealed in a statement released today (30 October).

Operating profit was also down, falling 37% to GBP54.7m in the nine-month period and 39% in Q3 to GBP18.2m.

Earnings per share totalled 0.3 pence in the nine-month period, excluding losses on other financial assets, compared with 1.7 pence in 9M 2007.

In October, the group was forced to sell its 10.9% economic interest in Greencore as a result of a withdrawal of the funding source after the Icelandic bank collapse, resulting in a loss of GBP58.5m in the nine-month period, of which GBP12.3m was recorded in Q3.

"The withdrawal of the funding source was in no way a reflection of the financial standing of Bakkavör Group," CEO Ágúst Gudmundsson emphasised.

Bakkavor said that it anticipates returning to profit growth in fiscal 2009.

"Looking ahead, we expect the trading environment to remain tough for the remainder of the year and into 2009. We will continue to focus on our key business priorities in order to drive sales and profit performance and remain confident of our commitment to the fresh prepared foods sector," Gudmundsson said.