January 25, 2018 / 7:33 AM / a year ago

UPDATE 1-Aryzta's issues profit warning on European and U.S. weakness

(Adds detail, pre-market share move)

Jan 25 (Reuters) - Swiss-Irish producer of baked goods Aryzta AG expects 2018 core profit to fall by 15 percent on a like-for-like basis, it warned on Thursday, saying that weakness in European and U.S. markets is unlikely to improve this year.

The profit warning comes two weeks after Aryzta announced the appointment of a new chief in North America, where issues with undocumented workers and a failed strategy led to Aryzta's record $1 billion net loss in 2017.

Shares in the company were seen falling 11 percent in pre-market indications.

In November Aryzta forecast 2018 earnings before interest, tax, depreciation and amortisation (EBITDA) to be broadly in line with 2017. The new forecast would mean Aryzta is set to report its lowest EBITDA since 2010.

European underperformance is likely to account for about 20 percent of the shortfall relative to previous expectations, Aryzta said..

That is in stark contrast with its view in November, when it trumpeted broadly based growth across the region.

In Europe it pointed to Brexit-related pressures hurting its UK business and higher distribution and labour costs denting U.S. profits. (Reporting by Thyagaraju Adinarayan in Gdynia; Editing by Amrutha Gayathri and David Goodman)

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