Goodman Fielder today (25 February) revealed that its first-half net profit failed to meet expectations, prompting the Australian food group to cut its full-year outlook.
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The company posted a 21.9% fall in net profit for the six months to 31 December, failing to meet the 15% decline it forecast in January. First-half net profit dropped to A$73.9m (US$48.1m) from A$94.6m in the first half of last year, the company revealed.
Profits were down despite a 12% rise in revenue, which increased to A$1.48bn, as the group grappled with an A$120m increase in commodity costs.
Delivering the disappointing results, management cited the “extreme volatility” in commodity costs and changing patterns of consumer consumption as causes of the group’s decline.
Looking to the full year and beyond, Goodman said that it expected trading conditions to improve. However, the company warned that demand is likely to soften as retailers cut inventories to preserve cash reserves and that pricing would remain “competitive”.
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By GlobalDataThe group did indicate that cost-savings would be generated by a 5% cut in its workforce, to be achieved primarily by not replacing departing staff.
The company predicted full-year net profit to fall in the range of A$170-185m.
