US cereal maker Post Holdings has booked a drop in first-half earnings as the company struggled with higher ingredient costs, lower cereal sales and expenses from its spin off from Ralcorp Holdings.

The St. Louis-based company, which spun off from Ralcorp this year, reported a drop in earnings of 56.6% to US$23.3m for the six months to the end of March.

Operating profit amounted to $64.5m, a 41% drop on the prior-year period. Net sales dipped 2.7% to $469.8m. Honey Bunches of Oats and Pebbles, Post’s largest brands, saw sales fall 2.4% and 6.7%, respectively, versus the same period a year ago.

However, its Great Grains brand, responded to a new national advertising campaign, and was up 25.2% over last year.

Volumes declined across the Post brand portfolio with the exception of Great Grains, which experienced a year-over-year volume increase of 13% in the six-month period.

In the second quarter, net earnings slumped 64% to $10.5m, while operating profit slid 43.2% to $33.2m. Sales dropped 3.3% to $250.5m.

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By GlobalData

For fiscal 2012, Post had estimated adjusted EBITDA to be between $200m to $210m. The company now expects this figure, following the separation from Ralcorp, to be in the range of $210m to $220m.

Click here to view the full earnings release.