25 Jun 2013

Goodman Fielder earnings to fall

12:05 pm on 25 June 2013

Goodman Fielder, the biggest food company in Australia and New Zealand, expects full-year normalised earnings to fall after it sold less poultry and spent more on marketing.

Earnings from continuing and discontinued operations before significant items will be $A195 million to $A200 million in the year ending June 30. That's less than the $A233 million reported last year.

AAP reports Goodman is selling assets, cutting costs and streamlining its brands while repaying debt as it faces increasing competition from supermarket in-house baking and grocery brands.

"While retail trading conditions, particularly in the Australian supermarket channel, remain challenging, Goodman Fielder continues to make steady progress on the key initiatives under the company's three-year strategic plan to restore sustainable earnings growth," the company said.

Goodman said it expects second-half earnings before interest, tax and significant items from continuing operations to rise 15% - 20% from the first half, as it benefits from an improvement in its baking unit and has stable to positive earnings growth in its grocery and dairy divisions. Its Australian baking unit will start a new private label bread contract July 1.

Shares in Goodman Fielder were unchanged at 86 NZ cents, having gained 6.2% this year, on the NZX. They were at A71 cents at close of ASX trade on Monday.

Goodman said full-year earnings for the Asia Pacific unit will be lower than last year because a higher-than-expected livestock mortality rate at its Fiji poultry unit in the second half reduced the company's ability to supply poultry to the market and increased its remediation costs.

AAP reports the company narrowed its net loss to $A146.9 million in 2012 from a loss of $A166.7million in 2011.