Mexican conglomerate Alfa has booked a slump in second-quarter profits from food division Sigma due to higher raw-material costs and more spending on marketing and R&D.
Food business Sigma, which makes dairy products, processed meats and frozen food, posted operating income of MXN606m (US$47.6m) for the three months to the end of June, down 21% on the year.
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Alfa said commodity costs for refrigerated foods increased, while the company upped its marketing and R&D expenditure.
The fall in profits during the second quarter led to an 11% slide in half-year operating income to MXN1.21bn.
Sales from Sigma, which holds the licence in Mexico for Yoplait yoghurt, during the second quarter were up 3% at MXN7.59bn. In the first half of 2010, sales increased 2% to MXN14.93bn.
Sales volumes climbed 5% during the second quarter on the back of “targeted point-of-sale promotions”, Alfa said.
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