US dairy giant Dean Foods has posted a slump of 52% in first quarter net income as a result of higher interest expense and rising dairy costs.
Net income from continuing operations for the quarter ended 31 March dropped to US$30.8m compared with $63.8m from the same period last year.
Dean Foods said the decline is related to the increase in interest expense as a result of the special cash dividend of $15 per share that was paid in April 2007.
Interest expense in the quarter totalled $83.8m, up from $52.2m in the first quarter of 2007, accounting for the majority of the year-over-year decline in adjusted net income.
“On the heels of the most challenging year in our history, I am pleased with the progress we’ve made in the first quarter of this new year across our business,” said CEO Gregg Engles. “While we expect continued challenges in the balance of 2008, we believe the difficulties of last year have strengthened our ability to navigate the continued volatility we anticipate in the commodity markets going forward.”
The group saw a rise in revenue of 17% to $3.08bn from $2.63bn a year ago, boosted by price increases and strong sales at its WhiteWave and Morningstar business.
The company said it expects its transformational efforts to increasingly drive it results in the longer term.