Associated British Foods today (10 September) revealed it had taken an impairment charge of A$150m (US$155m) on its Australian meat business as it battles “difficult” trading conditions in the market.
The UK-listed group announced the charge as it confirmed its global grocery operations would report lower adjusted operating profit for the year to 15 September.
ABF said the company’s forecasts of the discounted cash flows of its Australian meat unit could “no longer support the carrying value of the assets” in that business.
The impairment charge will not be included in ABF’s adjusted earnings. However, problems in Australia and the UK will mean adjusted operating profit from its grocery business will fall.
It cited restructuring costs at Australian unit George Weston Foods and UK bakery arm Allied Bakeries. ABF also pointed to “the difficult retail and competitor environment” in Australia and “margin declines” at Allied Bakeries, which used promotions to try to attract UK consumers.
Revenue from its grocery business will be higher. The company said its group adjusted operating profit would be up year-on-year, reflecting in part higher earnings from its sugar business.
The company’s results will be issued in November. Shares in ABF were down 1.53% at 1286p at 11:03 BST this morning.