US private-label food group Ralcorp Holdings has reported an increase in third-quarter profits, helped by higher sales and a gain from hedging contracts.
Ralcorp, which makes cereals, sauces and pasta for US retailers, booked net earnings of US$29.8m for the three months to the end of June, compared to $28.3m a year earlier. Operating profit was $77.1m, against $56.7m a year ago.
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A series of acquisitions in the last year boosted sales, which in turn helped profits. Net sales increased 11% to $1.03bn. Ralcorp was also lapping a $15.7m charge it incurred last year from hedging contracts. In this year’s third quarter, it recorded a gain of $3.1m from adjustments to hedging contracts.
Over the first nine months of Ralcorp’s financial year, net earnings were down 36% at $117.6m. This year’s results include a lower contribution from branded cereals company Post Holdings, which Ralcorp spun off.
Last week, Ralcorp announced plans to bring its subsidiaries together to save money and drive “sustainable” growth. Ralcorp will consolidate its snacks, sauces and spreads, as well as its cereal and pasta, units into a single company. Analysts will expect to hear more about those plans today (8 August).
Click here to read more insight into Ralcorp’s third-quarter results.
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