French cheese firm Groupe Bel has booked an increase in first-half earnings but warned high raw material prices will have a “strong” impact on profits in the second half.
In the six-month period, net profit jumped 46.4% to EUR91m, the company reported today (2 September). Operating profit was up 29.4% to EUR134m.
Bel said it benefited in the period from the strengthening of its trademarks, reducing costs and the “management and optimised allocation” of advertising expenses and promotions.
Sales climbed 1.9% to EUR1.32bn.
However, Bel said the group is still facing “a tough economic environment”, particularly in Europe and a “very uncertain geopolitical context” in markets in the Middle East.
“In addition, dairy prices in Europe and dairy raw material prices in international markets rose sharply in the second quarter of the year,” the company said. “The full impact of these price increases will be felt in the cost price in the second half of the year.”
As a result, Bel said it expects its operating margin to decline in the second half.
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