Wessanen today (25 July) confirmed a weak performance from its US drinks division ABC had hit second-quarter results, with the Dutch food group booking a EUR1.2m loss.

The owner of brands including Kallo and Beckers recorded a net loss of EUR1.2m (US$1.6m) in the three months to the end of June, compared to a profit of EUR3.2m in the prior-year period.

ABC, which manufactures Little Hug and Daily’s frozen juice drinks, was a key factor in the fall in second-quarter profits as the business affected Wessanen’s sales, which fell 6.8%. However, Wessanen’s bottom line also worsened due to a higher tax bill.

EBIT fell from EUR5.9m to EUR3.5m. Strong increases at both the firm’s grocery and HFS divisions versus last year was more than offset by the weak performance of ABC, the firm said. 

Wessanen said the results from ABC were “very disappointing”, driven by a reversal of growth at the frozen pouches market and Daily’s being unable to perform in line with the market.

The company said it is taking “short term corrective actions” to return ABC to profitability in 2014. The unit, however, is expected to show a full-year operational loss of US$5-10m.

First-half net profit dropped to EUR3.9m from EUR4.9m in the comparable period last year due to the higher tax bill.

However, first-half EBIT was up from EUR8.8m to EUR11.7m. Sales fell to EUR359.8m from EUR371.6m in 2012 due to the ABC unit.

Looking forward, the company said, as a consequence of a series of planned initiatives, revenue at its grocery, health food stores and its Netherlands-based snacks unit IZICO will be hit in both the second half of 2013 and first half of 2014.

The moves include the exit of a UK own-label contract, “downsizing” the company’s German and Italian operations and the impact of the closure of a plant in France.

Click here to view the full earnings release.