Australia-based Freedom Foods Group has reported higher first-half sales, a spike in its net profit on the back of an accounting gain but lower underlying earnings.

The breakfast cereal-to-UHT milk supplier booked an 8.3% increase in net sales revenues to A$55.5m (US$43.4m) for the six months to the end of December. Freedom Foods said sales increased "across all business units".

It posted a net profit of A$55.2m, up sharply from A$4m a year earlier, thanks to a fair value gain on a reclassification of its investment in New Zealand-based A2 Milk Co., in which it is the largest shareholder.

However, underlying net profit slid 24.9% to A$3.1m. Operating EBITDA dipped 1.4% to A$6.3m. Freedom Foods said its profitability was affected by the commissioning of new equipment for its "nutritional" snacks. The group's UHT and speciality seafood divisions "performed ahead of the prior year", the company noted.

Freedom Foods said: "The company considers the operating EBITDA result satisfactory considering the significant investment and commissioning of plant being undertaken and adjustments required to the operating structure of the business in this phase."

The group said its "focus into 2015 and beyond" is on increasing sales in Australia while looking to expand its fledgling businesses in North America and Asia.

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The company is investing in its R&D for cereals and cereal snacks to develop products for customers in Australia, China and south-east Asia,

It added "ongoing commissioning", including the installation of automated packaging capability in the second half, would give it a lower cost base and "significant" growth in capacity but "impact business unit profit performance".