ConAgra Foods has today (20 December) posted rising half-year profits thanks to commodity trading, as a recent pot pie recall hit earnings from its consumer foods business.
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The US food giant booked a 21% jump in operating profit to US$928m for the six months to 25 November.
The rise in earnings as profits from its trading in agricultural and energy commodities more than tripled from $54.5m to $240.1m.
Group revenue rose 11.9% to $6.5bn, again driven by ConAgra’s trading and merchandising business.
Profits from ConAgra’s consumer foods business tumbled almost 11% to $410.4m as the company ran up a $27m bill from its pot pie recall earlier this year. The company was recalled Banquet brand and private-label pies after a salmonella scare.
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By GlobalDataConAgra also incurred $38m in costs linked to the restructuring of its consumer foods business during its second quarter.
Half-year consumer food sales rose 2.2% to $3.4bn.
Profits from ConAgra’s food and ingredients division climbed almost 14% to $251.5m.
“I am very pleased with the momentum in our food and ingredients segment and how well our trading and merchandising segment is capitalizing on market opportunities,” CEO Gary Rodkin said.
“Although sales and profits for our consumer foods segment are not as strong as they should be, I am encouraged by continuing progress for a number of consumer foods brands, as well as the results of innovation and marketing efforts underway. We expect profits and margins for this segment to improve toward the end of this fiscal year.”
