SPAIN: 2013 "positive" for Ebro despite lower profits
Factors in India, Morocco and the US hit Ebro's rice business
Spain-based food group Ebro Foods described 2013 as "very positive" for the business even as its profits came in lower year-on-year.
Ebro booked annual net profit from continuing operations of EUR141.5m (US$193.2m), down 12% on the year.
The company's 2012 profits were boosted by the proceeds from the sale of rice brand Nomen.
The absence of Nomen, foreign exchange and an 8.5% jump in advertising expenditure meant Ebro's EBITDA was down 5.6% at EUR282m.
Ebro said its net turnover fell 1.2% to EUR1.96bn with the sale of Nomen again a factor.
However, looking back on 2013, Ebro said: "Although the consolidated results have been dented by all the external factors that have hampered the rice division, the overall balance and evolution of Ebro during 2013 have been very positive, since in a sector increasingly dominated by private label, its brands have hung on to their leading positions through intense work in innovation, commercial and marketing aspects."
Sales and EBITDA from Ebro's rice division were lower. Ebro said there had been a "mass default of basmati supply contracts in India", while smuggling of rice into Morocco hit its margins there. The company also pointed to the impact of a drought in Texas.
Sales from Ebro's pasta business were down, although EBITDA was up.
Kepler Cheuvreux analyst Inigo Egusquiza lowered a forecast on Ebro's 2014 EBITDA, estimating there would be a "lower contribution" from rice and from pasta. Ebro is selling its German pasta business Birkel.
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