French dairy group Bongrain has posted a significant drop in profits for the first half of the year as a result of “difficult” conditions in the dairy sector and the wider economy.
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Net profit from continuing operations dropped 69.3% to EUR22.8m (US$32.9m) for the period to 30 June, from EUR74.1m in the same period last year.
Current operating profit suffered from increases in raw materials and energy costs and dropped 54.5% to EUR37.4m from EUR82.1m in the comparable period for 2007.
Net sales, however, grew 8.5% on a like-for-like basis and in line with previous forecasts.
The company said that the economic environment has adversely affected food consumption in certain markets including France.
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By GlobalDataBongrain predicted the second half to be “less penalising” for the group as greater alignment is expected between the increased price for milk and the fall in world prices for by-products.
