Sales gains boost Ralcorp's third quarter05 August 2012
Stronger sales and a gain from hedging contracts helped Ralcorp to an increase in third quarter profits.
The US private-label snacks, frozen bakery, sauces and pasta manufacturer posted net earnings of €29.8 million, up from $28.3 million a year earlier. The firm successfully grew operating profit from $56.7 million in 2011 to $77.1 million in the last quarter.
Net sales were up 11.3% to $1.03 billion and the firm was boosted by an adjusted $3.1 million gain from hedging contracts. Last year, Ralcorp incurred a $15.7 million charge from hedging contracts.
Ralcorp’s frozen bakery division recorded a 35% boost in net sales in the quarter ending 30 June – growth which was primarily attributable to the acquisition of Refrigerated Dough. The purchase also triggered a 29% increase in frozen bakery volumes.
However, excluding the acquisition of Refrigerated Dough, the division’s operating profit dipped 19% on higher raw materials (primarily flour and oil), lower volumes and unfavourable foreign exchange rates. Ralcorp said higher costs were partially offset by improved net selling prices.
The firm’s snacks division delivered an 11% increase in net sales during the quarter as improved net pricing and product mix along with the impact of the Petri acquisition offset a 4% decline in volume. Cookies and crackers recorded high single digit growth and operating profit in the segment was up 27%.
However, over the first nine months of the year, Ralcorp has recorded a 36% drop in net sales to $117.6 million. The figure includes a lower contribution from Ralcorp's Post cereal business which was spun-off last year.
Last week, Ralcorp announced plans to save $26-31 million in the fiscal 2013 by consolidating its subsidiaries.
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