No let up in input costs volatility reports CSM, citing profits dip
The company, which supplies ingredients to semi-finished and frozen artisan and industrial bakeries, reported an EBITA of €43.8m for the three months to the end of March, compared to €46.7m in the same period for 2010.
It said the drop in earnings was the result of lower volumes and the delay in securing price increases to absorb higher raw material and other input volatility.
However, CSM noted an 18 per cent hike in first-quarter revenues to €759.8m citing benefits accrued from its acquisition of US bakery Best Brands, a stronger US dollar and some price increases.
CEO Gerard Hoetmer said the supplier had raised prices on its bakery products by an average of 6.4 per cent and on products from its Purac packaging unit by 5.2 per cent.
He added that it expected to tackle ongoing challenges around input costs through additional “price increases in the coming quarters.”
He stressed, though, that the company, was "looking forward to 2011 with confidence despite the fact that we see a persisting volatile year ahead of us.”
February this year saw CSM claiming it was considering further acquisitions in order to drive market growth in 2011.
And leveraging its proficiency in nutrient fortification was one of the highlighted objectives of a joint venture with a Tunisian bakery ingredients supplier that CSM announced in January this year.
The global company said it was teaming up with GIAS in order to gain access to a distribution network serving key markets in the continent.
CSM also told this publication at the time that its complete ingredients portfolio along with its expertise in fortification would also be exploited to the full in this market to improve the nutrient intake of African consumers.