Norwegian food group Rieber & Søn has reduced its full-year earnings forecast, pointing to "weak" sales in the first half of 2011.

The company today (11 August) said that it has lowered its underlying earnings per share forecast to NOK3.50, in line with the previous year's results, but down on the originally forecast NOK4.40.

First-half sales fell 8.7% to NOK2.1bn (US$381.6m). Operating profit over the half was down 60.8% to NOK184m. Rieber & Søn attributed the decline in operating profit for the half on lower volumes and higher commodity prices. Net profit fell 61.7% to NOK115m. 

Second-quarter net profit fell to NOK13m from NOK46m last year. The company said that operating profit, which dropped from NOK74m to NOK27m, was hit by higher commodity prices and a change in product mix.

"There are declining sales in categories where we have the highest margins. Also, we have not succeeded in applying price increases to our customers in line with the increased commodity costs," said CEO Patrik Andersson.

Second-quarter sales were down 2.8% to NOK1.1bn, although organic sales increased 2.4%. The company attributed the decline in sales to the sale of seafood maker King Oscar to private-equity firm Procuritas Capital Investors and its Scandinavian industrial spices business to Frutarom.

The company said that it has implemented price increases to compensate for higher commodity prices, with the increases to take effect from the third quarter.

Despite the lowered EPS forecast, shares in Rieber & Søn were up 2.6% to NOK39 per share at 10:25 CEST today.