SHARES in Goodman Fielder plunged yesterday after the group's net profit fell even deeper than a forecast slump by the group.
Goodman Fielder reported a 21.9 per cent fall in net profit from the prior year, worse than its forecast in January for a 15 per cent decline.
Shares of Goodman Fielder dived 16.43 per cent to $1.17 yesterday afternoon, as the benchmark S&P/ASX 200 index reversed far from early gains to be down 0.26 per cent.
Goodman experienced a $120 million increase in commodity costs, contributing to a net profit of $73.9 million in the period ended December 31, 2008, down from $94.6 million previously.
Goodman Fielder's revenue rose 12 per cent to $1.48 billion from $1.32 billion.
Management cited both “extreme volatility” in commodity costs and changing consumer patterns in explaining the earnings decline.
Analysts had expected earnings of $92.6 million, according to a poll of four brokers by Dow Jones Newswires.
Goodman Fielder said some cost-savings would come from cuts to its workforce of 5 per cent, mostly through attrition.
The group warned that demand would soften through the financial year as other companies reduced inventory to preserve cash. Goodman also warned that pricing could be competitive.
Goodman Fielder nevertheless said it expected improved trading conditions in the fiscal second half and further improvement going forward.
Full-year net profit was expected to register in the range of $170 million to $185 million.
The Australian and New Zealand food group declared a dividend of 4.5 cents a share, down from 6c a year ago. Goodman Fielder also offered a dividend reinvestment plan, within which shares would be allotted at a 2.5 per cent discount to the average price, in a 15-day period beginning in mid-March.
- Cynthia Koons, Dow Jones Newswires
