Shares in Dutch organic food specialist Wessanen were down over 4% this afternoon (29 July) following its negative outlook for the second half of 2010.
Wessanen forecast that, for the second half of the year, its operating result will be around break-even.
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The company said its core European operations are expected to post lower earnings than last year due to increased spending on marketing, sales and ICT.
The outlook led the company’s shares to slide by 4.8% to EUR2.92 at 13:03 CEST.
The fall in Wessanen’s share price came despite the company posting a EUR6.6m net profit for the second quarter of 2010, compared to an EUR84.6m loss for the same period last year. EBITDA was up 56.2% to reach EUR12.9m.
Revenue was down 0.1% to reach EUR193.7m. Revenue from continuing operations was stable at EUR193.7m, with a positive currency effect of 1.5%.
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By GlobalDataCEO Piet Hein Merckens said that the first signs of Wessanen’s brand harmonisation and centralised sourcing strategies were “taking hold”. “We will need to re-establish focus and make progress in standardisation of processes and leveraging best practices,” he added.
For the first half, the company posted a EUR2.1m net profit against an EUR89.6m loss for the same period in the previous year. It reported EUR366.3m revenue, which was largely in line with the same period last year.
For the rest of the year, Wessanen plans to “strengthen the core” of its business in Western Europe through centralised sourcing strategic cooperation with suppliers, brand and product alignment and increased ICT spending.
Wessanen plans to revitalise its Beckers brand, focus on innovation and production costs in its frozen food division.
At its US-based drinks division ABC, Wessanen plans to complete a “business process redesign”, reduce costs, improve weighted distribution and innovation, while continuing with plans to sell the unit in 2011.
Wessanen said it expects ABC to realise a full-year operating profit in 2010.
