Half-year earnings at Canada-based bakery group Weston Foods have fallen despite higher revenue amid pressure on costs.

Weston Foods’ operating income dropped 5.3% to C$106m in the 24 weeks to 14 June, parent George Weston Ltd said today (29 July).

Adjusted operating income, which excludes items like restructuring charges and the value of commodity derivatives, was down 14.9% at C$103m.

Weston Foods did see sales increase, growing 5.1% to C$880m, although its top line was helped by foreign exchange. The company did not give an indication of the boost from currency over the first half. However, it said its second-quarter sales grew 4.4% but increased 1.2% excluding curreny fluctuations.

George Weston had forecast pressure on Weston Foods’ earnings in the second quarter from costs and lower sales volumes.

Reflecting on Weston Foods’ second-quarter results, which also included lower profits, Pavi Binning, president of George Weston, said: “Weston Foods’ operating performance was challenged by higher than anticipated commodity and other input costs, higher plant start-up costs, lower fresh sales volumes and the costs associated with continued investments in future growth.”

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Earlier this year, George Weston forecast a fall in Weston Foods’ annual operating income amid investment in the business.

Today, it said it expects a drop in adjusted operating income in the third quarter. However, the company said moves to try to grow Weston Foods’ sales volumes and “easing pressures” on input costs are expected to improve adjusted operating income in the second half, when compared to the first six months.