UPDATE: Lindt & Spruengli 1st Half Net Falls 88%, Posts Slim Growth
25 August 2009 - 10:49AM
Dow Jones News
Swiss premium chocolate maker Chocoladefabriken Lindt &
Spruengli AG (LISN.EB) Tuesday said first-half net profit tumbled
88% due to charges for U.S. shop closures and high input costs, but
it said that an ongoing restructuring should result in better
profitability.
The Kilchberg, Switzerland-based maker of a variety of milk and
dark chocolate products under the Lindor, Excellence and
Ghirardelli brands posted a net profit of 2.7 million Swiss francs
($2.5 million) down from CHF22.9 million a year earlier. Some
market watchers had been looking for a net loss, because Lindt
posts only 40% of its annual sales in the first half while booking
half of the costs in that period.
Organic growth was at a slim 0.2%, below analyst expectations
ranging from 1%-4%.
"It's clearly worse than comparable figures of some rivals,"
Helvea analyst Andreas von Arx said, referring to a growth rate of
3.4% at Nestle S.A.'s (NESN.VX) food and beverages operations.
Part of Lindt's shortfall is likely due to the shuttering of
some U.S. selling points, he added. The analyst has a neutral
rating and CHF1,975 target price.
Lindt repeated its guidance for an organic growth rate of 2%-5%
and earnings before interest and taxes of CHF260 million to CHF280
million for the full year. It lowered those goals in March when
announcing the restructuring.
Zuercher Kantonalbank analyst Patrik Schwendimann, who recently
upgraded the stock to market outperform from market perform, said
he expects the company to return to an organic growth rate of 6%-8%
from 2011 at the latest.
In the first half, the company booked charges of CHF22.2 million
due to shop closures in the U.S. in a move to concentrate on
flagship stores, and an impairment of a warehouse building in
Italy.
Sales slipped to CHF979 million from CHF1.03 billion.
On the Swiss bourse at 0800 GMT, the Lindt certificate, its more
liquid security, fell CHF38, or 1.6%, to CHF2,275, in a lower
general market.
Company Web site: http://www.lindt.com
-By Martin Gelnar, Dow Jones Newswires; +41 43 443 8040;
martin.gelnar@dowjones.com