Del Monte Foods today (14 June) warned of ongoing "challenges" from its StarKist Seafood business after the unit played a role in the fall in company profits last year.

The US group saw underlying full-year income slump almost 18% to US$113m during the year to 29 April. Net sales for the year, however, rose 14% to $3.4bn

Profits fell, in part, due to declining sales at StarKist, as well as higher costs across the business. Earnings were hit by costs linked to Del Monte's "transformation" plan, designed to focus the company on value-added products, and by the acquisition of a pet snack business.

Nevertheless, Del Monte has forecast sales growth of up to 7% for the first quarter of its new fiscal year.

"We still, however, must deal with challenges, including inflationary cost pressures and our StarKist Seafood business," Richard Wolford, chairman and CEO of Del Monte, said. "Despite these ongoing headwinds, we believe we have the foundation in place to deliver strong fiscal 2008 performance."