(Bloomberg) – Kraft Heinz Co. recorded a $ 15.4 billion non-cash asset write-off charge, including some of its most famous brands, as a striking admission that changing consumer tastes have destroyed the value of some of the Company's most emblematic products.
A merger set up in 2015 by Berkshire Hathaway Inc. Warren Buffett and the private investment company 3G Capital, Kraft Heinz's portfolio plays mainly in the center of the grocery store, an area affected by secular changes in nutrition
The company has tried to build a tired set of brands – from organic production of Capri Sun to Oscar Meyer's natural hot dogs. But the biggest question in investors' minds is the ability of managers to deal with the big, transforming deals that shareholders want. : reduce overheads. But Unilever rejected the $ 143 billion deal, and Kraft Heinz's shares have since lost about half their value while investors are waiting for the next big move. It also signaled to investors in their quarterly results to receive a summons received last year from the US Securities and Exchange Commission related to its procurement practices. Kraft Heinz said that as a result of an investigation with the help of an outside lawyer, he enrolled a $ 25 million "cost increase for sold products".
Berkshire Hathaway's investments have fallen from an estimated $ 15.7 billion to $ 12.9 billion. shares collapsed to $ 39.66 at 18:15 in New York. Thursday's announcement was the second time this year that the Berkshire holding revealed unfavorable news after the markets closed, worsening its stock. Apple Inc. cut its earnings forecast in January, which shook shareholders.
Kraft Heinz will cut its quarterly dividend to 40 cents per share of 62.5 cents, helping him to pay off his debts faster and adjust to his smaller size after selling some businesses. The company paid dividends at the highest revenue ratio of its counterparts in the United States.
(Adds the value of Buffett's investment in the 8th paragraph.)
– With the help of Catherine Chiglinski.
contact the reporter on this story: Craig Giammona in New York at email@example.com
To contact the responsible editors of this story: An Riley Moffat at firstname.lastname@example.org, Rob Gollum
] <p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = For more articles like this, please visit us at bloomberg.com
© 2019 Bloomberg LP