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Goodman Fielder first-half profit slumps 77%

Goodman Fielder, the food ingredients producer whose brands include Vogel’s bread and Edmonds banking products, has reported a 77% slump in first-half profits, and is looking to ditch its Integro and New Zealand milling units.

Net profit for the manufacturer sank to A$21.5 million, or 1.4 Australian cents per share, within the six months ended December 31, the Sydney-based company said in a statement.

These figures slumped down from A$93.1 million, or 6.3 Australian cents per share a year earlier.

Revenue fell 3.7% to a sum of A$1.29 billion with earnings before interest, tax, depreciation and amortisation sinking by 44% to A$117.9 million.

Chief executive of Goodman Fielder, Chris Delaney, said that although the company’s current financial situation is sub-par, it is working on rebuilding acceptable returns for shareholders.

“While the trading environment remains very tough we are working hard to turn our business around,” said Mr Delaney.

Goodman Fielder had posted an annual loss of A$166.7 million last year, taking a A$300 million charge to write-down its baking division, reflecting dwindling sales and rising cost of raw materials.

This prompted an overhaul of the business, which has seen it streamline its New Zealand retail unit as part of a plan to strip out A$100 million from its cost base.

The company’s baking division reported a 47% slump in normalised EBITDA to A$43.1 million after loosing a major private label contract and rising flour costs, with the home ingredients division’s EBITDA falling 20% to A$42.2 million on higher commodity prices with its dairy business’ underlying earnings which sank 24% to A$23.6 million.

More by Robert McCambridge