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July 27, 2011

NETHERLANDS: Wessanen shares rise despite profit fall

Shares in Netherlands-based food group Wessanen rose today (27 July) despite the company's profits falling in the second quarter of 2011.

Shares in Netherlands-based food group Wessanen rose today (27 July) despite the company’s profits falling in the second quarter of 2011.

CEO Piet Hein Merckens claimed Wessanen, which sells brands including So Good and Kallo, continued to make progress.

The company said its net income declined to EUR5.4m (US$7.8m) from EUR6.6m in the same period last year.

Wessanen’s second-quarter EBIT was EUR7.4m, compared to EUR9.4m a year earlier. It attributed the fall to exceptional items related to the sale of its wholesale divisions Tree of Life UK and Kalisterra in France.

The company said its underlying EBIT – measured on continuing operations – was up 8.3% to EUR11.8m.

Over the quarter, Wessanen’s revenue rose 1.1% to EUR195.7m. On an organic basis, sales grew 2.3%.

“Our second quarter reconfirmed the continuous progress we are making as a company. The strategy is clear, we are more focused and in better shape and we have stronger market positions, although we still have to improve our performance in multiple areas,” CEO Piet Hein Merckens said.

The Wessanen chief said the company’s grocery division “continued to grow” but admitted that its wholesale operations to health food stores had “another challenging quarter”. Wessanen’s brands in the health food stores channel, he said, had “performed satisfactorily”.

“Although our behaviour is focused and consistent, we expect results to improve gradually since reaching the consumer and building brands within the HFS channel requires patience,” he said.

Hein Merckens said that the sale of the Tree of Life UK and Kalisterra will mean the company is more focused on high value-added activities within wholesaling.

“Given the performance in the second quarter, our many initiatives underway and the growth markets we operate in, I am confident that we are well on track to further improve our performance,” he added.

For the first half, net income rose to EUR9.9m, up on the EUR1.8m posted in the same period of the previous year. In the first half of 2009, Wessanen made a net loss of EUR89.6m due to impairment charges and the write off of deferred tax assets.

The company’s first-half EBIT was EUR15.5m, compared to EUR15.8m after the first six months of 2010.

However, its underlying EBIT reached EUR18.8m in the first half of this year. Last year, it stood at EUR17.3m.

Revenue rose 2.2% to reach EUR374.5m, with organic growth at 1.3%.

Shares in Wessanen had climbed 4.58% to EUR3.01 at 14:27 CET.

Click here for the full statement from Wessanen.

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