Russian dairy and baby food group Wimm-Bill-Dann Foods today (3 June) reported a jump in first-quarter net profit – but said raw milk costs had soured margins.
Wimm-Bill-Dann booked net income of US$33.7m for the three months to the end of March – compared to $12.6m a year earlier, when the company rang up $33.7m in finance costs.
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Revenue rose 19.1% to $615.3m thanks to volume growth “across dairy, beverages and baby food” and a boost from foreign exchange.
However, “sharp increases” in raw milk costs weighed on margins. Gross margin fell from 32.5% a year ago to 28%.
“The disruption in the supply of raw milk we saw in the fourth quarter of last year continued into the first quarter, impacting our profitability in the dairy segment in the short-term but the fundamentals of this market are solid nonetheless,” insisted CEO Tony Maher.
He added that Wimm-Bill-Dann was gaining ground in its three main categories.
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By GlobalData“We are not just benefiting from demand recovery, we are gaining market share in all three segments outperforming the market.”
Click here for the full Q1 earnings statement and click here for CEO Tony Maher’s comments on dairy margins for the year ahead.
