Kerry Group has blamed unexpected decline in quarterly revenue on adverse currency movements in developing countries.

In a trading statement ahead of its AGM, the food ingredients company also said the first quarter was a more challenging period overall across its food and beverage markets due to industry competitive pressures in response to “constrained consumer demand”.

Nonetheless, it reported a pick-up in business after a “relatively sluggish” start to the year.

While consumer foods markets in Ireland and the UK remained subdued during the first quarter, the company said its flagship brands, like Walls and Homepride, performed well.

Reported revenues for the three-month period, however, fell by 1.7 per cent reflecting “the adverse translation impact of significant currency headwinds”.

Nonetheless, it said business volumes grew by 2.9 per cent and net pricing increased by 0.4 per cent.

Shares in Kerry Group were trading down 90 cents (1.5 per cent) at €56 earlier today on the back of the update.

The group’s ingredients and flavours division enjoyed sales growth of 4.4 per cent, outperforming market growth rates.

“Despite inflationary pressures resulting from significant negative currency movements, developing markets achieved strong underlying growth,” it said.

Its consumer foods arm recorded sales growth of 0.2 per cent.

It said primary consumer foods markets in Ireland and the UK remained highly competitive with increased market fragmentation in response to consumer trends.

“While conditions in the Irish market have stabilised, private label and discounter offerings continue to gain market share in the sausage, cooked meats and branded cheese categories.”

The company also noted that its Dairygold spreads continued to perform well.

At the end of March, the group’s net debt stood at €1.2 billion, which it said, was in line with expectations.

Kerry said the increase in debt reflected the impact of capital expenditure and investment in working capital in the quarter.