Shares in Dutch food company CSM plunged following a profit warning and the announcement of company-wide restructuring.
Today (10 October) the company said that the “on-going challenging financial crisis”, low consumer confidence, competition and higher food costs have hit its bottom line.
As of 13.03 BST, shares in the firm dropped 18.50% to EUR11.41 (US$15.5).
In July CSM said that volumes would recover and selling prices would balance cost increases, but these two assumptions have been “overtaken by the current reality”.
A company statement said: “This further worsening in end consumer demand takes place at a time when all players in the food value chain are trying to manage their profitability as a result of the high volatility in raw material prices.
“This has led in a number of markets, for example in US and European retail, to an increase in price competitive actions. In this tough trading environment, CSM has been facing trade-offs between margins and volumes.”
The company also announced cuts of at least EUR50m as part of a “CSM-wide restructuring programme”, further details of which will be released in the third quarter results on 27 October. EUR30m of the cuts will likely take place in 2012.
“Investing and delivering growth remains at the core of our strategy, but in the light of the current reality, we have the responsibility of balancing this desire for growth with the necessity of protecting the profitability and financial health of the company”, the statement added.