ABF Takes AUD150mn Impairment Charge
News: UK-based food processing firm Associated British Foods (ABF) announced that it has taken a AUD150mn (US$155mn) impairment charge relating to its meat business in Australia amid tough trading conditions in the market. Although the impairment charge will not be included in the firm's adjusted earnings, challenges faced in Australia and the UK will lower ABF's adjusted operating profit from its grocery business. ABF also attributed the impairment charge to restructuring costs at its Australian subsidiary George Weston Foods and UK bakery division Allied Bakeries.
BMI View: Despite its diversity, Associated British Foods has over recent years focused its activities on market segments where it can establish a leading position and, as a consequence, has disposed of businesses that are not in line with the strategic focus while actively pursuing acquisitions suitable to deliver the kind of market presence the firm aims for. Recent acquisitions include 51% of Illovo, Africa's largest sugar producer, and the sugar operations of Ebro Puleva, Spain's largest food group.