The Nasdaq-listed Irish foods group Hibernia Foods has blamed a major promotional campaign by rival HJ Heinz and higher costs for losses of €4.4 million in the three months to the end of September.

Announcing its second-quarter results yesterday, Hibernia said sales of its frozen desserts had declined over the period suggesting this was largely due to the extensive advertising campaign that Heinz engaged in for promoting its rival products.

In the same period last year Hibernia recorded a loss of €0.94 million.

During the three months, Hibernia's revenues fell from €51.6 million to €48.8 million.

When combined with its performance in the first quarter, Hibernia posted a net loss of €7.7 million compared with a €7 million loss in the first half of the previous year.

The group's operating expenses during the second quarter were also marginally higher at €10.3 million, up from €10.1 million last year.

The operating loss for the quarter was €3 million compared with a profits of €0.5 million in the three months to the end of September last.

The net loss equates to a loss of 4 cents per share.

Commenting on the performance yesterday, Hibernia's chairman and chief executive, Mr Oliver Murphy, said the company had responded to the Heinz marketing campaign and he suggested its fortunes would improve.

"Despite the issues we experienced in the second quarter, I believe we are now in an upward trend, both with respect to revenues and profitability," Mr Murphy said.

"Assuming that present business conditions continue for the remainder of this fiscal year, we believe that revenues will increase in the current quarter and demonstrate double-digit growth in the fourth quarter."