Swedish confectioner Cloetta posted a drop in full-year profits today (16 October) as the company’s demerger hit figures.
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Profit after tax slumped to SEK6m (US$857,410) from SEK63m in the previous year. Earnings, the company said, were also affected by escalating raw material costs that have risen due to weakening of the Swedish krona during the year.
As a result, alongside measures to improve efficiency, Cloetta announced additional price increases in the fourth quarter.
Net sales for the full year to 31 August amounted to SEK1.18bn, a drop of 40% on the year. The figures include the sale of Fazer’s products on the Swedish, Norwegian and Danish markets until 31 December 2008. Sales of Cloetta’s own products rose by close to 6%.
Operating profit for Cloetta’s first year of operations was somewhat higher than predicted in the previously issued forecast, the company said, reaching SEK8m.
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By GlobalData“The items affecting comparability are attributable to the demerger of Cloetta Fazer,” said Cloetta’s managing director and CEO Curt Petri.
“As previously announced, Cloetta’s net sales have decreased by 40% as a result of the demerger of Cloetta Fazer. This has had a negative impact on profit, since it has not been possible in the short term to cut costs in an amount equal to the decrease in sales,” he added.
“After a first year that was largely marked by the demerger and in view of our new focus on Cloetta and Cloetta’s brands, we are now gathering our operations in Ljungsbro. Bolstered by our unique history and portfolio of strong product brands, our goal now is establish a position among the Nordic region’s leading confectionery companies.”
