Danone to sell Dumex in China, keeps goals

Yashili International Holdings

24/07/2015 06:30

PARIS, July 24 (Reuters) - French food group Danone 
 DANO.PA  posted lower-than-expected  first-half operating 
profit on Friday and said it was selling its flagship Dumex 
infant formula unit in China, which has been hit by food scares, 
taking a 398 million euros ($437 million)impairment charge. 
    The world's largest yoghurt maker, with brands including 
Actimel and Activia, said that despite an overall economic 
climate that remained difficult notably in Russia, it was 
keeping its full-year profit and sales outlook. 
    Danone is aiming to rebuild its position in China after an 
infant formula product recall in Asia in 2013. 
    Danone said earlier on Friday it had struck a "preliminary 
agreement" to sell its Dumex unit to Yashili International 
Holdings Ltd  1230.HK .  ID:nL3N1041DQ  
    In return, Danone will deepen ties with one of the country's 
biggest dairy firms, raising its 9.9 percent stake in China 
Mengniu Dairy Co Ltd  2319.HK , Yashili's indirect parent, by 
around 2 percent, Danone Finance Chief Cecile Cabanis told a 
conference call on Friday. 
    First-half operating profit rose to 1.381 billion euros,  
with second-quarter like-for-like sales rising 4.5 percent. 
    The first-half operating margin rose by 53 basis points to 
12.12 percent of sales. 
    The result was below a company compiled consensus of 
analysts for first-half operating profit of 1.393 billion euros 
and an operating margin of 12.27 percent. 
    For 2015, Danone said it was keeping its targets for 
like-for-like sales growth of between 4 and 5 percent, and a 
slight rise in its operating margin from 12.59 percent in 2014. 
 ($1 = 0.9112 euros) 
 
 (Reporting by Dominique Vidalon; Editing by James Regan) 
 ((dominique.vidalon@thomsonreuters.com; +33149495432; Reuters 
Messaging: dominique.vidalon.reuters.com@reuters.net)) 
 
Keywords: DANONE RESULTS