Bongrain bullish despite sharp drop in profits

Despite a 12.5 per cent drop in operating profits to €52.4 million for the first half of the year, French cheesemaker Bongrain said it was confident of a return to growth in the second half of the year.

The company said its results for the six months to 30 June 2002 were in line with expectations, given the economic crisis in Argentina, the sharp fall in world milk powder prices and the general economic downturn, all of which affected the marketing in the second half of 2001.

Weak consumption in France and Germany was to blame for a 5.3 per cent drop in sales to €1.9 billion during the half, but Bongrain said that its business had grown substantially in a number of regions outside western Europe.

Net profits of €22.7 million, down 2.1 per cent, were impacted by the rise in milk and milk powder costs, which effectively wiped out the gains Bongrain had made from the reorganisation of its business in 2001.

But with the markets in western Europe showing signs of improvement in the early months of the second half, Bongrain was able to predict a better performance in the second half.

The company's Argentine unit has returned to stability despite the continuing economic chaos in that country, and an increase in Bongrain's stake in Turek to 100 per cent, plus the acquisition of a smaller stake in hard cheese maker ICC Paslek (both in Poland), would help improve its performance in 2002, the company said.