Kraft and Heinz sales fall in fi­nal quar­ter be­fore merger

The Pak Banker - - COMPANIES/BOSS -

LON­DON: Kraft Heinz Co, the pack­aged food com­pany formed by the merger of ketchup maker H.J. Heinz Co and Kraft Foods Group Inc, said sales fell 4.9 per­cent at Kraft and 4.1 per­cent at ketchup maker Heinz in the last quar­ter be­fore the merger was com­pleted.

Kraft Heinz shares de­clined 2.3 per­cent to $77.00 in af­ter-hours trad­ing. Sales at Kraft fell due to weak de­mand for its bev­er­ages, a re­sult of fewer pro­mo­tions ver­sus the year-ear­lier pe­riod, while the strong dol­lar hurt sales at Heinz. Heinz, backed by War­ren Buf­fett's Berk­shire Hath­away Inc (BRKa.N) and Brazil­ian pri­vate eq­uity firm 3G Cap­i­tal, com­bined with Kraft Foods Group to cre­ate the third-largest North Amer­i­can food com­pany. The merger was com­pleted on July 2, just days af­ter the end of the two com­pa­nies' fis­cal sec­ond quar­ters.

Kraft's net in­come rose to $551 mil­lion, or 92 cents per share, in the sec­ond quar­ter ended June 27, from $482 mil­lion, or 80 cents per share, a year ear­lier. Net loss at­trib­ut­able to Heinz share­hold­ers widened to $344 mil­lion, or 91 cents per share, from $53 mil­lion or 14 cents per share, a year ear­lier. Kraft's net rev­enue fell to $4.52 bil­lion from $4.75 bil­lion, while Heinz's rev­enue fell to $2.62 bil­lion from $2.73 bil­lion. Kraft Heinz, whose brands in­clude Os­car Mayer, Philadelphia and Maxwell House, has said it ex­pects to save about $1.5 bil­lion in an­nual costs by the end of 2017. 3G has a rep­u­ta­tion for in­tro­duc­ing ag­gres­sive cost cuts and im­prov­ing ef­fi­cien­cies at other com­pa­nies it has in­vested in, in­clud­ing Heinz and An­heuser-Busch InBev NV.

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