Seneca Foods has reported a profit increase for the first nine months of its financial year thanks in part to one-off gains – but the US group saw sales fall on lower volumes.
Net profit for the nine months ending 26 December increased to US$40.6m from $7.1m a year earlier.
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Operating profit increased to $65.6m from $13.2m and was lifted by a LIFO credit, which boosted operating income compared with the year-ago period when it decreased it.
Seneca’s operating income also benefited from a credit related to General Mills’ sale of its Green Giant business to B&G Foods.
Under a deal with General Mills, Seneca manufactured certain Green Giant products. The sale of Green Giant meant the end of Seneca’s agreement with General Mills and the start of a new contract with B&G. General Mills paid Seneca $24.3m to end their deal.
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Sales for the period, however, fell on lower volumes to $971.7m from $1bn a year earlier. A major portion of the lower sales was due to a reduction in Green Giant vegetable sales, the company said.
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By GlobalDataThe third quarter followed a similar pattern. Net income grew to $31.1m from $7.8m and operating income increased to $48.2m from $11.5m.
Sales fell to $432.2m from $456.2m. The decrease is due to lower volumes partially offset by a “favourable” sales mix and higher selling prices.
