Goodman Fielder reaffirms EBIT despite charges

by Eric Schroeder
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NORTH RYDE, AUSTRALIA — Goodman Fielder Ltd. has reaffirmed its 2012 EBIT of A$230 million to A$245 million ($235 million to $245 million), despite an expected A$275 million in non-cash impairment charges related to its Australian and New Zealand Baking business and Home Ingredients NZ businesses and businesses previously identified as being under review.

Goodman, which has implemented Project Renaissance to reduce the company’s overall cost base and optimize its manufacturing and supply chain, said its 2012 earnings would be hit by an A$110 million ($112 million) charge following a review of the carrying value of its Australian and New Zealand baking business and NZ home ingredients arm. The company expects to incur another non-cash impairment charge of A$80 million to A$90 million ($82 million to $92 million) linked to a review of its business portfolios, and another A$70 million to A$75 million ($72 million to $77 million) will come from costs associated with facility closings and redundancy costs affecting about 600 employees.

In late June, Goodman Fielder said it would cut 115 jobs from its Australian baking business as a result of the closing of three bakeries at Rockhampton, Whiteside and Cairns.

“Increased competitive pressure, including price reductions for supermarket private label bread and the resulting pricing pressure on proprietary branded bread, together with higher labor and logistics costs continue to impact earnings in the Australia/New Zealand baking division,” Goodman said.

Goodman will release its fiscal 2012 full year financial results on Aug. 14.

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