By Diana Mandia

(Reuters) -French plant-based food company Bonduelle reported lower annual profits on Monday, hit by the COVID-19 crisis, bad crops, supply chain disruption and rising inflation.

Shares of the group, which provides canned, frozen and fresh processed vegetables as well as ready-to-eat dishes, fell 9% to 10.30 euros in early trade, the lowest in more than 20 years, before paring losses to stand 4% lower by 0840 GMT.

The war between Russia and Ukraine has sent food and energy prices soaring, while drought in key agricultural regions such as France shrunk grain harvests and cut inventories.

The group’s operating profit fell 3.7% to 96.6 million euros ($94.8 million) in the 12 months to June 30, excluding IFRS accounting effects, while its net profit slumped 38% to 35.4 million euros.

Earnings from its Russian sales between Feb. 24 and June 30, which the group plans to dedicate to the future reconstruction of Ukraine, reached 1.2 million euros. The method of this reinvestment has not yet been identified, it said.

Bonduelle’s ready-to-eat fresh activities in North America declined in what it called a less dynamic market, after it raised prices to preserve margins and ceased sales of non-contributing ranges to some clients.

The owner of Bonduelle and Cassegrain brands forecast revenue growth of 8%-11% for the ongoing fiscal year, excluding its recently sold North American long life activities.

The group said in June it would sell 65% of the unit, which processes canned and frozen vegetables in the United States and Canada, to Canadian investors Fonds de Solidarite FTQ and CDPQ.

Adjusted for the sale, Bonduelle expects its current operating margin to be stable at 2.5% in the fiscal 2022-2023.

“The outlook is not really appealing but we do not exclude a new disappointment regarding the context,” said Midcap Partners analyst Florent Thy-Tine, referring to high inflation and bad crops.

($1 = 1.0191 euros)

(Reporting by Diana Mandiá in Gdansk; editing by Milla Nissi, Kirsten Donovan)