Continued raw material price hikes, warns CSM

By Helen Glaberson

- Last updated on GMT

Related tags Raw material costs Price

A continued rise in raw material costs will hit lower first half earnings, says bakery ingredients giant CSM in a trading update, with price hikes not enough to offset the surge.

“In Q2 raw material costs increased even further than expected and are now trending towards an increase of €240m for the full year,”​ said the firm.

Q1 sales and EBITA before one-off costs were broadly as expected, said the firm, showing only a limited lagging effect as a result of its prices being increased by six per cent year on year.

CSM also reported some volume loss as the market adjusted to higher prices, adding that the EBITA trend was worsened by the weaker US dollar.

The ingredients supplier said it expects sales for the first half to be higher.

EBITA before one-off costs is projected to be below last year, around €80m.

Future projections

Looking forward, with most price increases implemented, CSM said it expected the pricing to gradually balance out the raw material increase.

The firm said it expects a gradual recovery of volumes during the second half year.

CSM said there was no indication that its competitive position had been weakened in either its bakery supplies or Purac divisions.

Despite a disappointing performance in the first half of the year due to environmental factors, CSM said it would continue with its focus of growing its bakery supplies activities, exploiting growth opportunities in its Purac business and “unlocking the considerable potential in bioplastics”.

Related topics Ingredients

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