Poultry group Inghams has clipped its payout on a 69 per cent drop in first-half profit after last year’s processing setbacks blighted the firm’s balance sheet.
Net profit for the six months to December 28 fell by $58.2 million to $26.2 million as Inghams counted the cost of its failure to keep up with customer demand for chicken.
The company announced in August it expected costs to soar in 2020 after efforts to streamline its processing network faltered, sending its shares down 20 per cent.
The business also cycled through a $28.1 million in net gain in the prior corresponding period following the sale of its Mitavite business.
Managing director Jim Leighton said Friday’s result was in line with expectations, given the headwinds that hurt the company’s volumes, costs, mix and margin.
He also said the processing issues were now in the past.
“Pleasingly, operating momentum improved through the half and those issues are now behind us,” he said on Friday.
Inghams’ first-half revenue ticked up 3.1 per cent to $1.3 billion as the company boosted core poultry volumes 4.1 per cent to 216,000 tonnes.
Inghams will pay a fully franked interim dividend of 7.3 cents per share, down 1.7 cents from a year ago.
INGHAMS COUNTS COST OF PROCESSING WOE
* Revenue up 3.1pct to $1.3b
* Net profit down 69pct to $26.2m
* Interim dividend 7.3 cents per share fully franked, down 1.7 cents from a year ago.