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Profits Drop at Cadbury

First-half revenue rises.

Food and drinks maker

Cadbury Schweppes

(CSG)

said Wednesday that its first-half revenue climbed year over year, while its adjusted operating profit declined, partly owing to the strength of the British pound.

Underlying profits from operations from Jan. 1 through June 30 fell 13% from the same period a year earlier to 168 million pounds. Last year, it earned 192 million pounds on the same basis.

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Excluding the effect of fluctuations in currency exchange rates, the underlying operating profit was down only 3%. Revenue for the first six months of the year rose 1% to 2.33 billion pounds, or 6% at constant exchange rates.

Once all items were factored in, Cadbury had a profit for the half year of 182 million pounds, down from 822 million pounds last year.

The most recent period includes a gain of 148 million pounds related to the planned disposal of the company's Americas beverage unit. Last year's results reflect a profit from discontinued operations totaling 744 million pounds.

Earnings dropped to 8.7 pence per share from 39.6 pence for the prior year. Cadbury's underlying profit from continuing operations declined to 3.7 pence for the first half from 4.1 pence in the 2006 period.

"First-half revenue growth was strong driven by investment in brands, innovation and market-place execution," CEO Todd Stitzert said in a statement. "We expect continued good revenue growth in the second half, while margins will be impacted by the combination of growth investment and higher input costs. Our team remains focused on delivering the unexploited potential of our portfolio."