KEY POINTS:
Spreads maker and bakery goods company Goodman Fielder has posted a 21.9 per cent fall in first-half profit due to a difficult trading environment.
The transtasman operator said net profit for the December half-year was A$73.9 million ($93.4 million), down from A$94.6 million in the previous corresponding period.
Sales were strong and rose 12.2 per cent to A$1.48 billion.
However, commodities costs were volatile during the half-year and consumer buying patterns altered, weighing on the bottom line.
Goodman Fielder said it expected trading conditions to pick up in the second half of 2008/09 and be even more positive in 2009/10.
As a result, it has forecast a strong rise in annual profit for this financial year.
"Net profit after tax for the current year is expected to be in the range of A$170 million to A$185 million," it said.
Its 2007/08 net profit was A$27.7 million after an A$170 million goodwill writedown and restructuring costs.
During the first half, high commodity costs affected margins and added A$120 million to the company's cost base.
"Although international commodity costs are now retreating from an extended period at record high levels, little benefit was realised in the period due to time lags inherent in purchasing contracts and in clearing higher cost inventory of grains and oils," Goodman Fielder said.
It also noticed that negative economic conditions had hurt consumer confidence, resulting in a drift to cheaper alternatives such as house brand products.
Goodman Fielder declared an interim dividend of 4.5c, down from 6c in the first half of 2007/08.
- AAP
