Lower margins eat into Burns Philp
Australian yeast supplier Burns Philp sees low margins cutting into
profit for the quarter.
Pricing pressure has hit another ingredients company with leading Australian yeast supplier Burns Philp reporting that low margins had cut into profits for the quarter.
Net profit for the quarter ended 30 September fell to A$3.6 million (€2.17m) from A$56.8 million a year earlier, although the figures were in line with expectations.
A rise in trading in Latin America helped offset poorer figures for North America. "With the closure of the Petropolis yeast plant in Brazil, the integration of the Fleischmann South America business is now substantially complete. The anticipated benefits of this acquisition, both in a strategic and economic sense, are being realised," said the company in a statement on Thursday.
An improvement in the market in Turkey helped boost European earnings for the yeast and bakery ingredients company with revenue in Europe rising to A$40.8 million, up 3.4 per cent from A$39.5 million on the previous year, although these figures were hit slightly by lower volumes in the yeast extracts business in the region.
Herbs and spices fared less well for the quarter, with Burns Philp reporting a drop of 27.7 per cent in revenue to A$64.9 million, down from A$89.8 million for the same period a year earlier. A drop in sales and the strenghtening of the Australian dollar against the US dollar - which shaved over A$15 million off revenues - were largely held responsible for the figures.
The company, which earlier this year acquired Australasian food company Goodman Fielder, said the new operation "performed to plan".
"We are satisfied with the continuing progress at Goodman Fielder and intend to comment more fully on this following the end of the calendar year when the current set of initiatives are fully complete," said the management at Burns Philp.
