Swiss food manufacturer Huegli has predicted an increase in profits this year after raw material costs led to a fall in earnings in 2011.

The company said today (12 April) its EBIT was likely to rise this year at a rate in line with its forecast 4-5% increase in revenue.

Huegli, which makes organic consumer brands and supplies other food manufacturers, as well as supplying to retailers and foodservice operators, said raw material prices had “stablised at a high level”, which would “depress gross margin” in 2012.

However, in 2011, Huegli saw margins fall due to rising input costs. Its EBIT margin was 8.6% compared to 10.2% in 2010. EBIT fell 24.7% to CHF28.5m (US$31.2m). Net profit tumbled 28.8% due to the lower EBIT and the absence of a one-off gain it reported in its 2010 results.

Hugeli reported a 10.8% fall in revenue to CHF332m thanks mainly to the strength of the Swiss franc and its impact on sales made outside Switzerland. On an organic basis, revenue increased 1.4%. Private-label sales increased 5.5% and made the “largest contribution to growth”, Huegli said.

Shares in Huegli were up 9.77% at CHF618 at 14:30 CET.

Click here for the full statement from Huegli.