French dairy food giant Danone said today that net profits fell 15% during 2013.
The Fonterra false health scare, high milk prices and currency factors in different regions were cited as reasons for the worrying performance.
Net profit fell to €1.42 billion ($1.95 billion), although sales rose by 2.1% to €21.3 billion, and by 4.8% on a comparable basis.
However, the current operating margin fell to 13.19%. In October, Danone issued a profits warning.
The company behind Dannon yogurt and Evian bottled water says an infant formula recall triggered by a false contamination alert at dairy supplier Fonterra in August of last year caused a €200 million loss in sales in the fourth quarter.
The French group, which is seeking damages from Fonterra, says it now needs to focus on rebuilding its brands in China.
Danone said it expected to return to strong, lasting and profitable growth in the second half of this year, saying that 2014 sales would rise by 4.5-5.5% and that operating margins would be broadly stable.
© 2014 - European Supermarket Magazine by Enda Dowling
