The chief executive of Dean Foods, the largest dairy firm in the US, today (13 February) spoke of the “most challenging” year in the company’s history after seeing fourth-quarter profits tumble.
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Gregg Engles said rising dairy commodity prices and a glut of organic milk had hit the business in 2007.
Dean Foods booked underlying fourth-quarter operating profits of US$149.2m, a fall of over 19% on the year.
Costs were the main factor in the fall in profits. Net sales during the last three months of the year rose 24.6% to $3.2bn.
Engles insisted Dean Foods had a bright future. “These near-term challenges did not slow our progress toward transforming the company into a stronger long-term competitor,” he said.
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By GlobalData“In 2007, we laid much of the groundwork that we will build on as we transform the business to drive productivity and increase efficiency in the years to come.”
Fourth-quarter profits from both Dean Foods’ Dairy Group and WhiteWave Foods divisions slumped as costs continued to bite.
However, net sales from the WhiteWave Foods division rose 13% as Dean managed to pass on some of its higher commodity bill.
For the full year, Dean Foods saw underlying operating profit fall 12.7% to $589.7m. Revenue rose 17.1% to $11.8bn.
