AMSTERDAM: Unilever, the world's third largest food company, made a profit in the fourth quarter and plans to sell European frozen food brands Birds Eye and Iglo because they are not growing.
The maker of Hellmann's mayonnaise and Comfort fabric softener had net income of 684 million euros (US$820mil) compared with a year-earlier loss of 144 million euros, the company said in a statement yesterday. Sales were little changed at 10.1 billion euros.
Patrick Cescau, who became the company's first sole chief executive officer a year ago, aims to accelerate measures to cut costs and increase profitability in 2006.
Unilever has lagged behind competitors such as Nestle SA and Groupe Danone because it failed to respond to consumer demand as quickly, according to analysts.
“The divestment will definitely improve sales growth,'' said Richard Withagen, an analyst with SNS Securities in Amsterdam. “We should see some positive impact on the sales growth line.''
The brands may fetch as much as 1.4 billion euros, he said.
Iglo and Birds Eye had combined sales of about 1.4 billion euros, Cescau said on a conference call. Growth at the units had been “elusive'', he said.
Unilever expects to complete the disposal this year. The company will retain its Italian business. The company's decision to divest the brands follows a review that started last year.
Birds Eye Foods Inc, a closely held company based in Rochester, New York, sells frozen food under that brand name in the United States. – Bloomberg
Did you find this article insightful?