Challenging economic conditions in both Australia and New Zealand have hurt the trading operations of listed food company Goodman Fielder in the year ended June 30.
The company yesterday reported operating earnings of $A356.7 million ($NZ445.87 million), down 7.4% on the $385.3 million reported in the previous corresponding period.
The dividend was slashed by nearly 28% to A7.75c per share.
All of the company's key indicators fell in the period with a non-cash impairment charge of $A300 million dragging the net profit after tax into a loss of $A166.7 million compared with a profit of $A161 million in the pcp.
Revenue was down nearly 4% at $A2.6 billion and operating cash flow fell 35.1% to $A207.6 million at balance date.
The company said in a statement to the ASX and NZX that following a solid first-half performance, it suffered a significant profit decline in the second half. Good performances in the Asia-Pacific and Integro businesses, and a flat performance by the home ingredients division in difficult conditions, were outweighed by falls in the baking and dairy businesses.
"Economic conditions in Australia and New Zealand were challenging in the second half and this resulted in weakened consumer confidence which impacted retail buying trends as consumers pursued cheaper alternatives."
The new chief executive, Chris Delaney, had moved quickly to reduce overhead costs, the company said.
A restructuring of the baking division started earlier this month to simplify business operations, reduce costs and increase efficiencies. That had resulted in an initial $A11 million overhead reduction in the baking division's sales, financing and supply chain functions.
Mr Delaney had also started a strategic review of the company's business portfolio designed to deliver a three-year phased plan to stabilise, restructure and grow the company while delivering a sustained business improvement.
Net debt at balance date was $A955 million, an increase of $A39 million on the pcp, primarily as a result of lower earnings in the banking division.
Goodman Fielder has a debt to debt plus equity ratio of 30.8% and debt to operating earnings of 2.66 times.
The company said that given current market conditions and that Mr Delaney was undertaking a review of Goodman Fielder's strategy, it would not provide guidance on the 2012 full-year performance.
An update would be given at the company's annual meeting on November 24.
