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Australasian food firm Goodman Fielder Ltd said today it expected a flat full-year profit because of rising commodity prices, sending its shares lower.
It said it was experiencing sustained increases in the cost of all agricultural commodities with prices at absolute record high levels.
"Present indications are that commodity costs for this financial year will be up by around A$180 million ($214.3 million), an increase of just under 40 per cent on last financial year," the company said in a statement.
It said it was trying to cut costs and raise prices, but expected its net profit after tax for the 2008 financial year to be around the same level as the year before.
Goodman, whose brands include Helga's bread, Meadow Lea margarine and Pampas pastry, reported a net profit for the 12 months to June 30 of A$239.8 million.
That result had been driven by acquisitions, including the Copperpot dips, yoghurt and pate business, and River Mill Bakeries in New Zealand.
In August, Goodman had said it was well positioned for profit growth in the year ahead.
"It needs to be stressed, however, that the high commodity costs are primarily a result of adverse climatic conditions which of course may ease, providing future relief from these cost increases," the company said on Monday.
Shares in dual-listed Goodman Fielder traded down 2.8 per cent at $2.43 in New Zealand. They closed on Friday in Australia at A$2.10.
The company only listed in December 2005 after it was spun off by Burns, Philp & Co Ltd.
Burns Philp, controlled by New Zealand's richest man Graeme Hart, sold its remaining 20 per cent stake last month for about A$562 million.
- REUTERS
