Aryzta, the speciality bakery group, has reported a pre-tax loss of €232m for the six month period to the end of January 2018. The Swiss-Irish food company, known for its Cuisine de France brand, made an operating loss of €194m. This was primarily due to a €151m impairment charge on the disposal of its Cloverhill business in the US.

Aryzta’s profit margins remain under significant pressure due to labour cost inflation in the US and rising input prices in Europe, primarily related to high butter prices. The company reported a 30% decline in earnings (EBITDA) to just over €161m, as profit margins fell from 12% to 9% year on year.

Aryzta reported half year sales of just under €1.8bn, which represents a 6% decline compared to last year. The group’s business in North America continues to pose challenges, with sales in this unit declining more than 14% over the six month period to €786m.

This was due to unfavourable currency movements of nearly 7%, while sales volumes declined almost 8% in the period. In Europe, Aryzta reported sales growth of 0.7% to €868m. While sales volumes in Europe were back 1%, Aryzta said it benefitted from a 2.7% increase in pricing.

“We are actively implementing a range of measures to improve our EBITDA. We are in a multi-year turnaround programme,” said Kevin Toland, chief executive of Aryzta.

“Under our new leadership team, we are reshaping the Group’s focus on our core B2B frozen bakery customers, improving operational efficiencies and deleveraging the balance sheet,” added Toland.

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