Kerry profits hit by 25m euro in charges

KERRY'S interim results for 2002 show a sharp dip in pre-tax profits which were hit by exceptional charges of 25m euro related to the Golden Vale acquisition late last year.

Other costs also dragged the pre-tax figure down for the period but the group says it is in line to produce results in line with market expectations for the year.

Despite that the share price fell 41 cents over the day and was standing at 14.95 by late afternoon.

When Golden Vale is included for the first time a full six-month period is taken out of the equation like-for-like sales grew by 5% over the period while sales overall rose by 34.3% to 1.8bn euro.

Managing director Hugh Friel said that the group would meet market expectations of sales close to the 3.7bn euro mark for the year as a whole.

He said: "The first half of 2002 has again highlighted the strength and broad geographic spread base of the group."

Highlighting the various market segments Ireland saw sales grow to 627m euro, boosted by the GV deal while operating profit rose from 18.9m euro to 26.9m euro. European operations excluding Ireland saw sales increase by 10.5% to 628.3m euro while operating profits increased by 8.7% to 43.9m.

Sales in the Americas rose 22% to 473.5m euro boosted by the acquisition programme of 2002 when the group spent close to $600m expanding its reach in the ingredients and flavourings sectors.

Satisfactory growth was achieved also in its core business while operating profits rose 18.1% to 52.8m euro. In Asia Pacific growth and development was satisfactory according to the group with sales up by 9.9% to 70.9m and operating profits ahead by 13.4% to 4.4m euro.

Australia performed well after a bad year and the group continues to build a presence across that part of the world where it has followed the big food companies.

Kerry currently is involved in Australia, New Zealand, the Philippines, China, Vietnam and Thailand where it continues to pursue development opportunities.

Progress is contingent on the performance of the big food companies and Kerry is expecting a slow build up of business in that very broad geographic region which in the years ahead offers massive potential.

Looking ahead Mr Friel said the group is confident of a good outturn for the full year with overall performance expected to live up to market forecasts.

Kerry will continue to focus on opportunities in prepared foods, snack and convenience products, culinary systems, food and beverage flavours and nutritional products.

The board has declared an interim dividend of 3.65 cents per share, an increase of 12.3% on the 2001 interim of 3.25 cents.

The markets are forecasting operating profits of around 300m for the full year.