IFF sales dip, but profits rise
higher profits for Q4, but sales dipped slightly as a result of a
poor performance from its European fruit preparations business.
The New York-based manufacturer of artificial flavors and aromas said fourth-quarter net income rose 7.3 percent to $40.9 million, or 43 cents a share, from $38.1 million, or 40 cents a share, in the same period in the last year.
Net income would have declined to $43.6 million, or 46 cents a share, against $45.3 million, or 48 cents, a year ago, if restructuring and other charges were excluded.
Sales were down less than 1 percent to $468.2 million from $471.8 million in 2003. This fall would have been around 4 percent had it not been for the effects of the weak dollar.
IFF blamed the revue decline on the sale of the company's European fruit preparation business and the poor sales the business had notched up before it was off-loaded.
"Our results were mainly driven by new customer wins and strong demand for our core flavor and fragrance formulations," chairman Richard Goldstein said in a statement. "I believe our expected performance in 2005 will build on the solid results achieved for 2004."
The company said fiscal 2005 earnings are forecast at $2.34 to $2.41 a share, compared with $2.05 in fiscal 2004.
The ambitious Israeli flavors firm Frutarom bought IFF's European natural fruit preparations business back in August last year, just months after completing on the Swiss botanical extracts firm Emil Flachsmann.
The Tel Aviv-based maker of flavors for food and functional food industries paid €30 million for the business, giving it a firm foothold in the growing natural ingredients market.
Others changes at the company also include the closure of its Dijon manufacturing facility, expected in the first quarter of this year following the transfer of production to other IFF locations.
This closure is part of the company's ongoing plan to consolidate its flavor and fragrance operations into its larger, more specialized sites; a move IFF hopes will increase capacity utilization and further improve productivity and customer service.
