Spain-based processed meats firm Campofrio has reported losses of over EUR54m (US$71.7m) for 2011 due to the cost of its plans for expansion.

Campofrio said an "exceptional net provision" of EUR88.3m mainly linked to its planned investment programme meant it recorded annual losses of EUR54.2m last year. In 2010, Campofrio booked net income of EUR40m.

The company said it would look to expand its business by channel and geographically and would spend more money on marketing, productivity and R&D over the next three years.

In line with the new strategy, Campofrio has decided to sell a "majority" stake in its French cooked meats business to its partner Foxlease. It reclassified the business as a discontinued operation from 1 January last year.

"In response to both our vision and the extremely challenging market context, the company has decided these important next steps," Campofrio CEO Robert Sharpe said yesterday (29 February).

Campofrio's 2011 results included normalised EBITDA of EUR169.4m. A year earlier, it reported EBITDA of EUR163m.

Sales increased 13.6% to EUR1.83bn due to its acquisition last year of Italian firm Cesare Fiorucci. Excluding that deal, turnover grew 1.7%.

"The group has had a positive performance in terms  of sales and EBITDA despite the difficult macroeconomic context of 2011, which has seen a highly inflationary raw materials landscape, especially fresh meat, which reached the highest level of the last decade. We also see rapidly changing consumer habits in terms of purchasing preferences and price sensitivity," Sharpe said. "Our strategy and efforts on value creation, through mix improvement, innovation and pricing, together with continued productivity, enabled the group to deliver a strong operational result in 2011."