CSM (CSM) NV, the world's largest supplier of ingredients to bakeries, said profit more than doubled in 2005 after the company sold its sugar confectionery business.
Net income rose to 423.4 million euros ($505.1 million), or 5.72 euros per share, from 159.7 million euros, or 2.01 euros, in 2004, the Diemen, Netherlands-based company said today in an e-mailed statement. Sales from continuing operations fell 4.2 percent to 2.62 billion euros.
CSM is selling assets and cutting jobs to boost profitability at its bakery-supplies business. The company cut 696 full-time jobs last year, or 7 percent of its workforce, and aims to save 55 million euros this year as part of a plan to double those savings by 2008. CSM said today it's ``confident'' about improving results at continuing operations this year.
The company said earlier this month it may sell its sugar unit as the European Union prepares to lower protection of the industry and said today it will make a decision on that sale by this year's second half. Changes in the EU sugar regime are expected to lower the operating result at that business this year, CSM said. Sales at that business fell 14 percent last year while profit before one-time items was ``stable'' at 40.8 million euros.
The shares rose 45 cents, or 1.8 percent, to 25.51 euros at 9:49 a.m. in Amsterdam. They were almost unchanged in 2005 after climbing 32 percent in the prior year. The company has a market value of 2 billion euros.
CSM is ``committed'' to return up to 250 million euros to shareholders this year through dividends and share buy backs.
Annual operating earnings at CSM's European bakery-supplies business fell 44 percent to 43.2 million euros as the company paid to close factories and sales to independent bakeries slid in Germany. Profit rose 14 percent to 63.5 million euros on that basis at the North American bakery-supplies unit.
CSM said today it will start pursuing ``bolt-on'' acquisitions after restoring profitability at its bakery supplies business. The company expects sales growth at the unit of as much as 2 percent more than the market and aims to save an additional 70 million euros at that business by 2008.
The company plans to pay a dividend of 80 cents a share, unchanged from last year.
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