Danish food group Danisco posted 2% revenue growth in the first quarter to DKK5.28bn (US$898m). The company said progress in the first quarter had been driven by 6% organic growth in its ingredients business, but revenues from sugar had declined by 1%.
EBITDA before special items and share-based payments fell by 1% to DKK920m, while EBIT before special items and share-based payments rose by 6% to DKK648m, resulting in an EBIT margin of 12.3%.
Consolidated profit increased by 58% for the quarter to DKK423m. However, this was mainly attributed to positive developments in share-based payments and special items. Before share-based payments and after special items, consolidated profit rose by 25% to DKK383m, in line with expectations.
Danisco’s ingredients business recorded 4% revenue growth to DKK3.5bn. Rolling 12-month organic growth continued at the 5% level. At product level, sweeteners and speciality products were the main growth drivers, whereas geographically Europe was the key driver, the company reported.
EBITDA from ingredients also grew by 4% to DKK690m, representing an EBITDA margin of 19.7% against 19.9% in the same period last year.
Sugar revenues fell by 1% to DKK1.85bn. Most market segments performed as expected, but the warm summer meant increased demand for sugar from the soft drink industry, Danisco said.
EBITDA from sugar for the quarter was DKK265m, representing an EBITDA margin of 14.3%, compared to EBITDA of DKK298m and an EBITDA margin of 15.9% in the same period last year. The drop in margin performance was attributed to the adverse effects of the extraordinary quota reduction in 2006/07, price pressure on the European sugar markets and higher indirect production costs resulting from the reduced quota.
Danisco said its outlook for 2006/07 was unchanged from the forecasts it issued when it published its full-year results for 2005/06. Revenue is expected to reach around DKK21.0bn, with DKK 13.5bn from ingredients and DKK7.5bn from sugar.
The company is forecasting EBITDA before special items and share-based payments of around DKK3.25bn, with around DKK2.6bn from ingredients and DKK850m.