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Wimm-Bill-Dann Foods Q2 Profit Falls On Raw Milk Procurement Challenges - Update

(RTTNews) - Russian dairy producer Wimm-Bill-Dann Foods OJSC (WED) late Wednesday reported a fall in profit for the second quarter, as challenges in raw milk procurement hurt gross margins, while sales increased over 15% from last year.

The company's second-quarter net income declined 31.5% to US$35.9 million from US$52.3 million in the prior year quarter.

Quarterly sales improved to US$639.8 million from US$554.6 million in the year ago quarter. Dairy and beverages sales improved over 13% each from last year, while Baby food sales increased 32.6% from the prior-year period.

Operating income for the quarter fell 4.8% to US$58.5 million from US$61.4 million in the previous year.

Gross profit rose 4.3% to US$203.7 million from US$195.3 million a year earlier. However, gross margin declined to 31.8% from last year's 35.2% due to challenges in raw milk procurement.

For the first half of the year, net income attributable to shareholders grew to US$69.53 million or US$1.68 per share from US$64.94 million or $1.50 per share in the same period last year. Sales increased to US$1.255 billion from US$1.072 billion in the previous year.

Commenting on the results, Tony Maher, Wimm-Bill-Dann's Chief Executive Officer, said, "Our performance continues to be strong, with significant improvements in market share across our dairy, beverages, and baby food segments, as demand restores back to levels we have not seen since before the global economic crisis." However, Maher said raw milk procurement continues to be challenging.

WBD closed Wednesday's regular trade on the NYSE at $18.80, up $0.47 or 2.56%, on 419,130 shares.