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Goodman Fielder posts drop in full-year profit

Thursday 19th August 2010

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Australasian food maker Goodman Fielder posted an 8.3% decline in full-year profit, reflecting a decline in revenue and one-time charges for tax changes and costs of an asset sale blocked by regulators.

Net profit fell to A$161.1 in the 12 months ended June 30, from A$175.7 million a year earlier, the Sydney-based company said in a statement. Revenue fell 6.6% to A$2.7 billion.

Goodman’s planned sale of its fats and oils business to Cargill was thwarted by Australia’s antitrust regulator in March and the company subsequently took some $7.8 million of one-time charges for depreciation and transaction costs.

Goodman is now restructuring and redeveloping the business to improve its profitability, it said today. Total one-time costs of $22.4 million including a charge for changes to tax depreciation rules in New Zealand.

“Overall the company experienced a highly competitive business environment throughout the year coupled with low pricing inflation,” the company said.

“The ongoing strength of the Australian dollar adversely affected returns from both our Asia and New Zealand businesses, which were impacted by weak currency when profits were translated into Australian dollars.”

Goodman's commercial division posted a 33% decline in earnings before interest, tax, depreciation and amortization to A$34.3 million, as input price volatility and a divestment of the business impacted first half results.

Home ingredients EBITDA fell 6.5% to A$9.4 million.

EBITDA for its Fresh Dairy business rose 37% to A$60.3 million on stronger sales, and while pretax earnings from the Fresh Baking business rose 16.4% to $156 million on the back of a cost cutting initiative.

The company’s Asia Pacific business posted a 9.1% growth in EBITDA at A$57.8 million.

Goodman said the outlook for the 2011 financial year is positive, with growth in net profit forecast to come in at the “mid to high single digit percentage” range.

However, the company cautioned that the operating environment was still sensitive to input cost volatility, currency translation and food price inflation.

A final dividend of 5.5 cents per share was declared, bringing the full-year dividend to 10.75, representing a payout ratio of 92%.

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