Kraft Heinz has reported better-than-expected profits for its fiscal fourth quarter, helped by lower costs.
For the three months to 31 December, net profit jumped up 46.4% to $944m, while operating profit was up 22%, although sales were down a less-than-expected 3.8% to $6.9bn (+1.6% organic basis).
At its US business, sales were up 1.7% to $4.8bn on an organic basis, helped by increased prices and volumes. Sales in Canada were up 1.2% on the same basis to $617m, but Europe recorded a 1.5% dip to $600m, hurt by weakness in the UK. Finally, the Rest of the World unit saw organic sales grow by 4.5% to $801m.
The group – the world’s fifth-largest food & beverage maker – said it is now aiming at reducing costs by $1.7bn annually by 2018, up from its earlier target of $1.5bn.
CEO Bernardo Hees noted: “Looking forward, our objectives and opportunities are clear. But we need to sharpen our focus on profitable sales, and further improve our capabilities and execution to deliver another year of strong, sustainable growth in 2017.”
Hees also said the group will deliver further innovation in several areas this year, without offering specific details. He added that the group has identified the Heinz, Kraft, and Planters brands as key for future growth, but also sees opportunities in segments such as condiments and sauces, cheese, meals, nuts and baby food.