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SYDNEY - Food producer Goodman Fielder Ltd has forecast 2008 financial year net profit to be within five per cent of the prior corresponding period.
In a speech to the company's annual general meeting, which was disclosed to the Australian stock exchange, the company said commodity costs were likely to be up about A$180 million ($212 million), an increase of just under 40 per cent.
In August, Goodman Fielder delivered a 2007 financial year net profit after tax of A$239.8 million, which was reduced to A$222.1 million when one-off gains and costs were stripped from the result.
At the time, the company said it was well placed for earnings growth in the 2008 financial year.
But in his AGM speech, Goodman Fielder chairman Max Ould revealed the effect of sustained increases in the price of all agricultural commodities.
"Present indications are that commodity costs for this financial year will be up by around A$180 million, an increase of just under 40 per cent on last financial year," Mr Ould's speech said.
"While we continue to maximise our efforts to recover cost increases through operational efficiency and price recovery in the market place, we anticipate that, on current indications, NPAT (pre significant items) for the current financial year is likely to be around last year's level, with a sensitivity of plus or minus 5 per cent reflecting the extreme volatility of commodity costs."
Mr Ould added that high commodity costs could ease if climate conditions change.
- AAP
