Chinese food group Beingmate and Yurun Food this week issued profit warnings as the economic slowdown in the country takes its toll on food makers. In the UK, Hilton Food Group was hampered by the strength of sterling but, on a more upbeat note, UK cake maker Finsbury Food Group said it will "outperform" expectations. Here are this week's results in brief.
Beingmate sees H1 operating income "decreased greatly"
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Chinese infant formula group Beingmate warned its first-half operating income "decreased greatly" year-on-year. The company forecast the drop based on its initial unaudited results.
Beingmate attributed the decline to challenges facing traditional retailers, such as supermarkets and hypermarkets, as Chinese consumers buy online or via specialist baby stores. The company said the Chinese infant formula category is increasingly competitive and conceded the business's "transformation has not been completed".
Beingmate said it expects to make a loss of CNY95-105m (US$15.3-16.9m) versus net profit of CNY107.8m a year ago.
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Click here for the regulatory filing.
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By GlobalDataYurun Food issues profit warning
The economic slowdown in China prompted Chinese food maker Yurun Food to issue a profit warning following a preliminary review of the group's performance for the first five months of the year.
In a regulatory filing the company said it expects to record a loss in the first half of 2015. "The loss in the first half of 2015 is expected to be not less than HK$700m (US$90.3m)," Yurun said.
"The loss was mainly attributable to the slowdown in economic growth and transformation of economic structure in China, together with the sluggish high-end catering and pork consumption markets and the increasingly competitive economic environment." The pork maker added that it had been unable to pass on higher hog prices.
The company was also downbeat on its full year outlook: "Due to the uncertainties of the macro-economy, the group anticipates that it will continue to face various challenges in the second half of 2015."
Finsbury says it will "outperform" expectations
UK cake maker Finsbury Food Group said it will "outperform" its current full-year EBITDA and profit expectations.
The company said following a "positive" first half, "strong" trading has continued through the back half of the year. Total company sales grew to GBP256.2m (US$399m), an increase of 45.8% on prior year. This includes organic growth of 6.1%.
The top line was boosted by acquisitions, including Fletchers and Johnstone's Just Desserts. The company said the earlier-than-expected integration of Fletchers resulted in cost savings.
CEO John Duffy said: "As one of the largest speciality bakery groups in the UK, we believe we are well positioned to continue to deliver against our strategy and are confident that the business, with our latest acquisitions, will drive group growth and shareholder value."
FX hits Hilton Food Group
Hilton Food Group said its first-half trading performance had been "in line" with expectations but conceded it felt the negative impact of "challenging" consumer conditions and currency exchange the period.
The UK meat processor said: "As anticipated, challenging consumer conditions remain in some countries and the appreciation of sterling against the currencies in which Hilton trades has continued to have an effect on our results. We have continued to grow the business, through additional volumes and close cooperation with our retail partners."
Hilton said it grew sales volumes in the UK, the Netherlands and Ireland and additional capacity will come online in Australia in the coming quarter. However, sales were pressured in Sweden and Denmark.
Shore Capital analyst Darren Shirley said the trading update represented a "continuation" of trends seen at the start of the year. "We see Hilton Foods as a high quality company which is expected to benefit from investment in the UK and Australia in the short-medium term, and continues to explore growth opportunities in both domestic and overseas markets. Such ambitions are supported by well-invested facilities, an ungeared balance sheet and strong cash generation."
Click here for the trading update from Hilton.
Armanino hits 'highest ever' Q2 sales
Armanino Foods of Distinction reported a 17.5% increase in second-quarter sales, which rose to US$9m.
The US maker of Italian speciality foods said that this was the highest sales figure in the group's history. Income totaled $1.86m, up 17.4%, and EPS gained 20% to $0.036.
CEO Edmond Pera said: "The company’s sales and profits reached new records because of solid and growing domestic sales in the second quarter. We posted excellent profit numbers despite incurring higher than normal promotional expenses."
Armanino said it is "cautiously optimistic" on the outlook for the remainder of the year, with a "strong" sales pipeline in place.
Click here to view the release.
Juhayna sees net profit leap
Egyptian dairy group Juhayna Food Industries booked a 126% increase in second-quarter EBIT to EGP161m (US$20.5m). Net profit rose 64% to EGP65m, the group revealed.
The company attributed growth to lower raw material costs – which returned to "normal levels" – and sales expansion. Sales in the second quarter rose 16% year-on-year to EGP1.1bn. Higher dairy and yoghurt sales were the biggest contributors to growth.
Click here to view the release from Juhayna.
Amira sees FY earnings, sales growth
Rice group Amira Nature Foods booked higher full-year sales and earnings on the back of "increased demand" across "categories and geographies".
The company grew revenue in the 12 months by 27.8% to US$699.4m. Net profit rose to $51.3m, versus $38.1m, while adjusted EBITDA increased 31.9% to $99.5m.
Karan Chanana, president and CEO, said: "We are seeing revenue growth around the world – in India, our important home market, and across the emerging markets geographies of Middle East, Africa and Asia. We are also seeing signs of continued strength in our smaller, but rapidly expanding developed world business, where we entered into new relationships in the UK, continental Europe and the United States."
Click here for the results in full
Cloetta operating profit rises
Confectionery group Cloetta said operating profit rose 52.9% to SEK130m (US$15.1m) in the second quarter as the group lapped restructuring charges and reaped the gains of its transformation drive.
Cloetta said sales in the quarter rose 3.4% to SEK1.28bn, of which organic growth accounted for 0.8% of the increase. Sales increased in Sweden, Finland and Denmark but dropped in Italy, the Netherlands and Norway.
President and CEO Bengt Baron said the result is evidence that Cloetta's strategy is "paying off". "Cloetta’s strategy for profitable growth is generating continuous improvements. We have been able to demonstrate organic growth in the past few years while at the same time completing acquisitions to further accelerate growth."
In a separate announcement today (17 July), Cloetta said it is acquiring Dutch confectioner Locawo, which makes the Lonka brand.
