Currency rates worry Nestle

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NESTLE, the Swiss company that owns Rowntree, Carnation and Buitoni, warned of slower second- half growth after announcing a 16 per cent rise in first-half after- tax profits to Sfr1.18bn ( pounds 478m).

Second-half prospects depended on currency movements, the company said. 'If the influence of the currency evolution should continue to be as negative as it has been since the end of June and during the months of July and August, this . . . might slow the profit growth rate reported for the first semester for the whole of the year.'

The company, which has agreed to acquire Perrier, has only 3 per cent of its sales in Switzerland. The rest of Europe accounts for 48 per cent and the United States for 25 per cent. The dollar has fallen from Sfr1.53 to Sfr 1.43 in the 12 months to June, reducing the value of Nestle's US profits.

Sales rose from Sfr23.2bn to Sfr26.3bn in the first half. The company said sales growth might be faster in the second half.

Nestle's shares, traded in London on Seaq international, rose from Sfr939 to Sfr948 yesterday.

Net debts rose from Sfr6.4bn to Sfr7.1bn, pushing up interest charges from Sfr244m to Sfr307. Spending on plant rose from Sfr1.14bn to Sfr1.32bn.

Spending on acquisitions, excluding Perrier, was up by Sfr61m to Sfr478m. The acquisition of Perrier was delayed by the discovery that Perrier did not own one of eight springs it intends to sell.

The disposal was promised to meet EC requirements on competition.