Ferrero Rocher has to swallow 39% profit fall

Pre-tax profits at Ferrero Rocher’s Cork plant last year declined by 38.7% to €2.4m despite revenues increasing.

Accounts recently filed by Ferrero Ireland Ltd show that revenues increased at the firm from €42.4m to €43.2m in the year to the end of Aug 2011.

The directors state that the company’s profits at the end of August last year “were ahead of target”.

“This was a combination of improved efficiencies and purchased material costs being lower than budgeted. In 2011/2012, the profit for the financial year exceeded expectation, confirming the stability and good performance of the company.”

The company’s pre-tax profits were hit by a €1.2m loss from the sale of a tangible fixed asset.

The company employs 228 at its Cork plant — an increase of nine on 2010. Staff costs last year reduced from €10.1m to €9.9m.

The main confectionery product the company produces at its Cork plant is the Tic Tac sweet.

The company paid a dividend of €5.6m last year.

The company’s operating profit decreased by 38% from €3.9m to €2.4m.

The cost of sales increased from €33.1m to €33.5m with administrative expenses increasing from €5.3m to €6m.

The company had accumulated profits of €20.2m. The firm’s cash reduced from €4.6m to €463,746 during the year. Net assets stood at €24.3m.

According to the directors’ report, “there are a number of challenges facing the company in the medium term, which include the introduction of new flavours, competition within the Ferrero Group along with higher energy, material and labour costs.”

“The company is very confident that it can meet all these challenges and overcome them by growing and developing existing and new innovative processes, though the company’s ongoing and extensive commitment to broad continuous improvement projects and research and development programmes.”