* H1 net sales 1.53 bln euros, vs 1.52 bln eur in poll
* H1 adjusted EBITA 80.2 mln euros, vs 80.8 mln in poll
* Volumes starting to recover after price hikes
* Shares up 7.4 percent, second top mid-cap gainer
(Adds analyst comment, detail, shares)
By Aaron Gray-Block
AMSTERDAM, Aug 10 Dutch food group CSM
CSMNc.AS said recovering volumes will stabilise second-half
profit, after first-half operating profit was hit by lower
demand after it raised prices for its products.
Europe's food groups are grappling with soaring costs for
coffee, milk, grain, edible oils and packaging and are
attempting to offset the impact by passing the increase on to
consumers through higher prices and by internal cost cuts.
CSM, the world's largest bakery products supplier, said on
Wednesday that as the market leader it had pushed through price
rises first, which hit its volumes in the first half, especially
in the United States, but it has now completed the price hikes.
"We believe we will see the low point of volume growth in
the second-half after volumes contracted by 3.1 percent in the
second quarter. This should mean a recovery in 2012 is fully on
the cards," said ING analyst Marco Gulpers, upgrading the stock
to "buy" from "hold".
CSM reported on Wednesday first-half earnings before
interest, tax and amortisation (EBITA) and one-off costs of 80.2
million euros, down from the 102.5 million it reported last
year, on a 7.7 percent rise in net sales to 1.53 billion euros.
Although it expects the bakery supplies markets to remain
volatile, CSM said it is seeing encouraging signs of recovering
volumes as the market absorbs its higher prices and guided for
second-half EBITA to equal last year's 112.7 million euros.
Shares in CSM, which were down 27 percent since its profit
warning on July 5, jumped at the opening and were up 7.4 percent
at 17.17 euros at 0852 GMT, to be the second top gainer in the
Amsterdam midcap index , which was up 2.9 percent.
Switzerland's Nestle , the world's biggest food
group, raised its 2011 outlook after strong emerging market
demand and also said although conditions will stay challenging,
pricing should help more in the second half.
CSM, which makes muffins and pastries mainly for European
and U.S. retailers, had already guided for first-half EBITA of
about 80 million euros in a profit warning, blaming a spike in
raw material prices.
Analysts in a Reuters poll had expected EBITA before
one-offs of 80.8 million euros on sales of 1.52 billion euros.
Despite CSM's more upbeat tone, SNS Securities analysts said
CSM needs to restore confidence after its profit warning, while
analysts at Rabo Securities said they failed to see the reason
for CSM's confidence in achieiving a flat second-half EBITA.
"It depends on costs savings, price increases and the impact
on volumes (whether CSM will meet its second half target). If
volumes can be sustained, this will be sufficient, but they also
need cost savings," Rabo Securities analyst Patrick Roquas said.
CSM said it is cutting costs by minimising travel and
consultancy expenses and has enforced a hiring freeze. It did
not say by how much it planned to cut costs.
(Reporting by Aaron Gray-Block; Editing by David Cowell and