Goodman Fielder says first-half profit dropped; stock falls

Monday 12th January 2009

Goodman Fielder, the biggest food maker on the ASX, reiterated that first-half profit fell about 15%, in line with its forecast, as raw material costs rose.

The company, whose stock also trades on the NZX, was responding to a query from the ASX after its stock jumped 18% last week. The shares fell 4.7% to A$1.43 today.

Goodman Fielder referred to chairman Max Ould's comments to the annual shareholders' meeting on Nov. 20 when he said first-half profit would be about 15% lower "due to time lags in the recovery of an additional A$100 million of increased commodity costs and the impact of increased private label volumes."

"We do not have any reason to believe that the company's first-half profit results will vary from the outlook statement," company secretary Jonathon West said
today.

Earnings tumbled 88% to A$27.7 million last year after the company took an impairment charge against its Dairy Fresh unit in New Zealand and contended with rising prices for ingredients such as wheat and canola. Ould told shareholders the company anticipates a decline in commodity price in the second half, lifting full-year profit to between A$191 million and A$204 million.

Goodman went public after a A$2.1 billion initial public offering in December 2005. It was formed after Burns Philp, controlled by billionaire Graeme Hart, spun off Burns Philp's baking and spreads business.

Its New Zealand shares were unchanged at $1.64.

By Jonathan Underhill

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