Boparan Holdings, the parent company of 2 Sisters Food Group, has reported a 37% decline in operating profits to £13.7m for the third quarter of its financial year. Boparan chief executive Ranjit Singh described the three-month trading period to the end of April as “tough”, with bird flu in Europe and the depreciation of sterling all negatively affecting performance.

Singh said the weakened UK currency had led to a sharp rise in input costs with imports more expensive. UK grain prices, which are traded in US dollars, have also become more expensive due to the fall in sterling.

Despite reporting a 5% increase in sales to £822m for the period, 2 Sisters saw pre-tax profits more than halve (-54%) to £9.4m. Profit margins in the business narrowed sharply by 110 basis points to a slender 1.7% for the UK’s third-largest food company.

The company’s net debt position increased by £84m during the quarter to just under £795m, meaning the group is highly leveraged with a net debt to earnings ratio of 4.7 times.

In his outlook for the rest of the year, Singh said that difficult challenges would continue in 2017 but added that recent actions taken on price recovery and cost efficiency savings would yield rewards in the final quarter of the year.

2 Sisters recently cut over 300 jobs after it announced the closure of its Smethwick site in the West Midlands of the UK.