Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Nutricia NZ profit slides 97% following Fonterra scare

Nutricia NZ profit slides 97% in 2013 year disrupted by Fonterra recall

By Suze Metherell

June 12 (BusinessDesk) - Nutricia, the New Zealand infant formula unit of French food maker Danone, posted a 97 percent drop in profit in 2013, a year that saw sales disrupted by Fonterra Cooperative Group's false alarm botulism scare last August.

Profit fell to $1.99 million in the year ended Dec. 31, from $61.1 million a year earlier, according to the company's financial statements lodged with the Companies Office. Sales fell 15 percent to $318.2 million while cost of sales rose 8.1 percent to $265 million. Globally, Danone's early life nutrition unit reported annual revenue growth of 0.1 percent to 4.26 million euro, as a 13 percent drop in second-half sales offset a 14 percent gain in the first half.

Infant formula sales for Danone's Nutricia unit plunged last August as it recalled infant formula from New Zealand, China, Singapore, Malaysia, Hong Kong, Vietnam, Cambodia and Thailand after Fonterra quarantined several batches of whey protein concentrate on fear it was contaminated with a potentially dangerous strain of clostridium bacteria, capable of causing botulism. The strain was ultimately shown to be harmless.

"The botulism scare caused serious damage to Danone Nutricia's business," which was reflected in global sales, a spokeswoman for Danone said in an email to BusinessDesk, declining to make any specific comment on the New Zealand unit.

In January, Danone terminated its supply contract with Fonterra and started legal action against New Zealand's largest exporter, seeking compensation over the recall, and served arbitration papers to be heard in Singapore.

"The early life nutrition division continues to be significantly affected by fall-out from the false safety alert triggered by Fonterra in August 2013," Danone said at the time of its full-year results in February. "Recovery plans to get sales back on track are being deployed in the countries affected and are having some impact, with the pace of recovery varying from market to market. In China and in Australia-New Zealand in particular, the trend is very gradual, as anticipated when third-quarter sales were announced."

Nutricia's financial statements for the year ended Dec. 31, 2012, lodged with the Companies Office, say in a note on events post balance date that the company's total value of inventory affected by the recall was $25.7 million.

Despite the profit drop, the local unit still paid a dividend of $72.3 million in 2013, up from $34.1 million a year earlier.

Of the eight customers affected by the recall the dairy exporter has agreed to a commercial outcome with all of them except Danone. In Januaru, Fonterra said it would "vigorously defend" itself against the Danone claim.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news