Greencore Group, the world's biggest maker of prepared sandwiches, said first-half profit rose 37 per cent on compensation linked to its withdrawal from the sugar industry.
Net income increased to €41.8 million ($66 million), or 20.8 cents a share, in the six months ended March 28th from €30.6 million, or 15.4 cents, a year earlier, the Dublin-based company said today in a statement. Sales gained 2.5 per cent to €648.7 million. Pre-tax profits fell from €34.86 million to €30.035 million, a fall of 14 per cent.
Profit was swelled by an €18.1 million-euro payment following the exit from making sugar.
Greencore, formerly known as Irish Sugar, closed its last sugar factory in 2006 and is now focusing on making convenience foods for customers from convenience stores to airlines and its ingredients division.
Greencore fell 39 cents, or 11 per cent, to €3.23 in Dublin trading yesterday. The stock has declined 28 per cent this year, more than the 12 per cent slide by the Irish Overall Index, reducing the company's market value to €652 million.
Surging costs are adding to bills at companies from US chocolate maker Hershey Co. to Northern Foods, the largest UK maker of prepared meals.
Greencore's cost increases this year will be larger than last year's earnings, Chief Executive Officer Patrick Coveney said earlier this month.
Higher commodity prices also have increased the cost of plastic packaging.
The food producer said in February that the pound's drop against the euro may reduce operating profit by about €8 million should the single European currency continue to trade between 74 pence and 75 pence for the rest of the fiscal year.
The euro traded at 79.7 pence yesterday.
Greencore said last month it bought Home Made Brand Foods for as much as $54 million to enter the US market for chilled convenience foods.
Royal Ahold NV's Stop & Shop chain and Delhaize Group's Hannaford unit are among the customers for whom Newburyport, Massachusetts-based Home Made turns out prepared meals, salads, sandwiches and quiches.