• First-half net profits slide 40.8%
  • Operating profits decline 9.3%
  • Net sales climb 16%
Ralcorp yesterday booked a drop in first-half profits

Ralcorp yesterday booked a drop in first-half profits

Ralcorp Holdings has booked a drop in first-half profits as charges related to plant closures, a legal settlement provision and merger costs weighed on the firm's bottom-line results.

For the six months to the end of March, net profits slid 40.8% to US$91.5m, the private-label group reported yesterday (22 May).

Ralcorp spun off its Post brand cereal business in February and in October last year acquired Sara Lee Corp.'s North American private-brand refrigerated-dough business. The firm has also twice delayed the release date for its first-half and second-quarter earnings.

Excluding costs, adjusted earnings slipped to 72 cents per share from 75 cents. Operating profits in the period amounted to $179.1m, a 9.3% decline on the prior-year period.

Net sales, however, climbed 16%, largely due to the acquisition of Refrigerated Dough. Base-business net sales increased 7% as a result of an increase in overall net pricing in response to "significantly" higher raw material and freight costs.

This increase was partially offset by an overall 4% volume decline driven by weakness in all but the cereal products segment.

In the second quarter, net profits plummeted 68.5% to $26.2m, while operating profits slid 26.5% to $76.1m. Net sales, however, climbed to $1.06bn from $917.3m last year.

Click here to view the full earnings release.