Cadbury owner disappoints markets with lower-than-expected results
CADBURY owner Mondelez International Inc, a subsidiary of Kraft, has disappointed investors in the United States by reporting weaker-than-expected revenues for the second time in its two quarters as an independent company.
However, Cadbury Dairy Milk continued to be one of its star performers, seeing double-digit growth.
The group’s shares fell 3.7% in afterhours trading in the US.
Mondelez, which also makes Trident gum and Oreo cookies, reported a revenue rise of 3.7% excluding any impact from acquisitions, divestitures and other things.
This was weaker than forecast as the company had been hoping for growth of closer to 4%.
Nevertheless, the firm is standing by its forecast for 2013 of revenue growth of somewhere between 5 and 7%.
Mondelez was set up last year when Kraft separated its snacks business from the main foods group. It was intended to be a growth company, capitalising on opportunities within the emerging markets.
Mondelez cited a sales interruption in Canada related to the separation of its businesses and ongoing weakness in the gum sector for its weakened fourth quarter performance. In the third quarter, the company had blamed problems in Brazil and Russia for its disappointing showing.
Analysts in the US said the firm’s gum business had been struggling for some time due to market share losses and economic factors such as high youth unemployment.
Kraft chief executive Irene Rosenfeld said despite the gum weakness, the firm did not need the situation to turnaround in order to meet its revenue targets.
The company said revenue growth for the group was likely to be more modest in the first half of this year but would accelerate later.
Net revenues were down 2.2% to £22.4bn ($35bn). Net profit for the fourth quarter was £341m ($534m), down from £530m ($830m) a year earlier.
Ms Rosenfeld said: “This was a transformational year for our company. We successfully completed the spin-off of Kraft Foods Group, resulting in a significant increase in shareholder value, and delivered solid top-line growth and higher Adjusted Operating Income margins across all geographies. We remain relentlessly focused on driving our global snacking platforms and Power Brands while leveraging our strong routes-to-market to deliver on the exciting promise of our new growth company.”