SPAIN: Ebro sees FY profits surge

Spanish food group Ebro Puleva has posted a jump in full-year profits, as its operating segments benefited from a stabilisation of input costs.

Net profit increased by 44% year-on-year to EUR130.6m (US$165.5m), the company said yesterday (26 February).

Excluding gains from the sale of the sale of Ebro's sugar business, earnings before interest tax depreciation and amortisation (EBITDA) rose 19.8% to EUR272m and net operating profit (EBIT) stood at EUR202m, up 27%.

Including the sale, Ebro said EBITDA is projected to reach EUR320m and EBIT is expected to total EUR222m.

In December, Ebro reached an agreement to sell it sugar unit Azucarera Ebro to Associated British Foods in a EUR385m deal. The company said that its balance sheet would be "healthy" after competition of the sale.

Ebro also highlighted that it has been able to grow sales during a period of global economic constriction. Turnover increased 18.8% during the fiscal, rising to EUR2.36bn.

Ebro said that this points to the strength of its business model and brands, which maintained market share.

Ebro also brought a number of new products to market during the year and increased marketing spend by 6%, or EUR5m, during the 12 month period.

At its rice unit, Ebro said that it successfully managed the supply of raw materials and benefitted from growing rice consumption and the launch of new convenience products, growing EBITDA 31.5% to EUR126.5m while turnover was up 20% to EUR891m.

The stabilisation of raw materials costs, the completed integration of Birkel, the launch of new products and a marketing push drove results at Ebro's pasta business, where EBITDA grew 20% to EUR106m and sales rose 30% to EUR994m.

Likewise, Ebro's dairy business felt the benefit of lower input costs. The company also continued its move to shift emphasis to value-added branded products, rather than high volume items, increasing profitability. The division achieved EBITDA of EUR50m and turnover of EUR506m during the period.

Shares in Ebro closed at EUR8.94 yesterday, up from an opening price of EUR8.53.