• Net losses narrow to A$146.9m
  • EBITDA drops 16.6%
  • Sales slide 1.7%
Goodman Fielder said it managed to “stabilise” earnings through “significant overhead and cost reduction”

Goodman Fielder said it managed to “stabilise” earnings through “significant overhead and cost reduction”

Australian food manufacturer Goodman Fielder has narrowed its full-year losses, driven by cost cuts and earnings growth in Asia Pacific.

In the 12-month period, the company reported a net loss of A$146.9m (US$154.3m) compared to a loss of A$166.7m last year.

Goodman Fielder, which is looking to "reposition" the business after a challenging two years, said it managed to "stabilise" earnings through "significant overhead and cost reduction", particularly in its baking division. It also pointed to profit growth in Asia Pacific.

However, EBITDA amounted to A$299.8m, a 16.6% drop on the prior-year period, reflecting "challenging" retail markets, primarily baking in Australia and New Zealand. Sales declined by 1.7% to A$2.51bn.

CEO Chris Delaney said the trading result did "not yet reflect the considerable work being done by Goodman Fielder". He said he was "pleased with the progress" Goodman Fielder had made in the period.

He added he expected domestic market conditions in fiscal 2013 to remain similar to the prior year with a "challenging environment and competitive pressures continuing".

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• Earnings stability
o Normalised EBIT of $233.1m, within guidance provided at half year
o Slight improvement in second half earnings vs first half; normalised EBIT increased 9% in 2nd half vs prior corresponding period
• Balance sheet strengthened
o Financial position strengthened through focus on capital management
o Net debt 24% lower, credit metrics improved from first half
• Portfolio refocused
o Business divestments on track; offers received for Integro - entered into period of exclusivity with bidder to finalise transaction
• Major restructuring and business strategy proceeding to plan
o On track for $100m in cost savings by FY15- $23m savings achieved in FY12
o New group structure implemented to improve customer alignment and promote core category innovation

Goodman Fielder Limited today reported its financial results for the year ended 30 June 2012 ("FY12"). Normalised Earnings Before Interest and Tax - EBIT (pre significant items) were $233.1 million, within guidance provided at the half year result and 20 per cent lower than the prior year.

Normalised EBIT improved slightly in the second half of the year compared to the first half and increased by 8.8 per cent compared to the second half last year, reflecting the company's significant overhead cost reduction programme to stabilise earnings.

Restructuring costs related to overhead reduction and impairment charges and asset write-downs, which were advised previously to the market, resulted in total significant items (pre tax) of $267.2 million.

As a result of these significant items, Reported NPAT was a loss of $146.9 million compared to a loss of $166.7 million for the prior year.

Chief Executive Officer, Chris Delaney, said while the trading result did not yet reflect the considerable work being done by Goodman Fielder to profitably compete in a challenging trading environment, he was pleased with the progress the company had made in establishing a stable platform to enable Goodman Fielder to implement its strategy for medium term growth.

"In the past year, we set ourselves four key strategic goals which are critical to improving the company's earnings performance and restoring acceptable shareholder returns in the medium term. I am pleased to report that the company has delivered on each of these key priorities."

Original source: Goodman Fielder