France’s Groupe Danone says 1H profit rises 44 percent as dairy volumes rebound

Danone 1H profit up 44 percent

PARIS — Groupe Danone SA’s first half net profit rose 44 percent as the French yogurt and bottled water company said price cutting had helped spur a rebound in volume sales of its key fresh dairy division, Danone said Friday.

The Paris-based maker of Evian mineral water and Activia yogurt reported first half net profit of euro978 million ($1.39 billion), up from euro677 million a year earlier.

In a statement, Danone said volumes at its fresh dairy division had rebounded in the second quarter, rising 2.7 percent after five consecutive quarterly declines, thanks to price cuts and intensified ad campaigns.

Danone said that on a like-for-like basis its underlying net profit, the measure most closely watched by analysts, rose 7.6 percent to euro722 million ($1.02 billion) in the first half.

The world’s biggest yogurt maker also said it expects “no significant improvement or dramatic breakdown” in its markets over the rest of the year, and confirmed its full-year earnings targets.

Danone has set a full-year group target of like-for-like sales growth of a few points below its medium-term guidance of 8-10 percent and a like-for-like operating margin improvement. The company also targets more than 10 percent growth in its underlying earnings per share on a like-for-like basis and excluding the effect of its euro3 billion capital increase last month.

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