Hügli Group, the Switzerland-based private-label food maker, today (14 August) raised its earnings forecast for 2009 as lower commodity costs and a focus on rationalisation helped half-year profits.
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The company, which makes soups, sauces and desserts for discount retailers across Europe, revealed it now sees EBIT and net profit rising by 10% this year. The group confirmed its earlier forecast for annual sales growth – on an organic basis – of 3%.
In April, Hügli said it expected “slightly higher” EBIT and gave no forecast for net profit.
During the first six months of the year, Hügli saw net profit climb by 28.7% to CHF11m (US$10.3m), with EBIT up 16.8% to CHF16.8m.
The strength of the Swiss franc weighed on turnover, which fell 4.6% to CHF192.9m. Stripping out foreign exchange, sales rose 3.5%. Excluding the effect of acquisitions, sales were up 2.7%.
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By GlobalData“We are pleased that we have been able to increase profits over-proportionally, not only in local currencies but also in Swiss francs, notwithstanding the losses incurred through currency translation,” the company said.
“The raw materials prices, after having soared in the second half of 2007 and first half of 2008, have abated slightly in the second half of 2008 and the first half of 2009 and stabilised on an elevated level.”
Hügli said rationalisation measures had brought “considerable gains”, while it had also ended its production of less profitable lines.
“We have given profits our main attention in all our customer segments and discontinued the supply of less profitable domains,” it added.
