Food group Kerry has reported a drop in pre-tax profits for last year, having warned in May last year that profits would be hit by rising energy costs and a weak dollar.
Total sales were up nearly 5% to €4.65 billion, but pre-tax profits dropped 25% from €297.9m in 2005 to €221m. This included exceptional losses of €73.4m, mainly due to losses on the sale of businesses and restructuring costs. When these were stripped out, pre-tax profits were €294.7m.
Underlying earnings per share were up 1.7% to 133.9 cent and a 13.6% higher final dividend of 12.5 cent has been declared.
Chief executive Hugh Friel said that 2006 was a challenging year for the group, but cost-cutting and restructuring had led to an improved second-half performance. He said the group had made a good start to 2007 and was confident that results would be in line with market expectations.
Margins in its ingredients division held up, but there was a drop from 7.1% to 6.5% in the consumer foods business, due to problems in the poultry and frozen ready meals markets.
Food ingredients sales rose by 3.7% to €3.1 billion, while profits also rose 3.3% to €293m.
Consumer foods sales rose by 5.4% to €1.8 billion but profits fell 4.5% to €118m. Kerry sold its poultry processing operations during the year, including its Smithboro operation in Ireland.
A geographical breakdown showed that Kerry's European sales were €3 billion, while the Americas accounted for €1.3 billion. The Asia Pacific region showed the fastest growth of 9% to €363m.
Shares in the company were down 41 cent, or 2%, at €20.05 in Dublin this evening.
