Post Holdings reports 51.4% decline in Q2 net earnings

Post Holdings, the parent company of Post Foods and a manufacturer of ready-to-eat cereals, has reported that its net earnings decreased 51.4% to $5.1m for the second quarter of 2013, compared with $10.5m for the same period in 2012.

For the quarter ended 31 March, net sales decreased slightly to $248.2m, compared with $250.5m for the corresponding quarter a year ago due to a 4% decrease in average selling prices partially offset by 3% higher volumes.

Post stated that the fiscal 2013 volume improvements have been driven by growth in its Great Grains, Grape Nuts and Good Morenings brands.

In addition, the company witnessed growth in revenue from co-manufacturing agreements.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the quarter was $51m, compared with $54.1m for the same period a year ago.

For the six months ended 31 March 2013, net sales increased 3% to $485.1m, compared with $469.8m in the previous year driven by 5% higher volumes and a slight decrease in average net selling prices, while net earnings declined 45.4% to $12.7m, compared with $23.3m in 2012.

Adjusted EBITDA was $103.5m, compared with $99.7m for the same period in the previous year.

Earlier this week, Post entered into a definitive agreement to acquire the branded and private label cereal, granola and snacks business of Hearthside Food Solutions in an all-cash deal worth $158m.

Including the partial year expected results of the cereal, granola and snacks business of Hearthside and Attune Foods, Post expects fiscal 2013 adjusted EBITDA to be between $216m and $225m.

In April, the company decided to shut down its manufacturing facility in Modesto, California; transfer of production capabilities and closure of the plant is expected to be complete by September 2014.

On completing the transfer and start-up of production to other facilities, which is estimated to result in capital expenditures of approximately $29.8m, Post expects to achieve pretax annual cash manufacturing cost savings of about $14m.

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Image: Post stated that the fiscal 2013 volume improvements have been driven by growth in its Great Grains, Grape Nuts and Good Morenings brands. Photo courtesy of PRNewsFoto/Post Holdings, Inc.