ITALY: Reduced litigation proceeds hurts Parmalat profits
Parmalat's profits were down on reduced settlement costs
Italian dairy giant Parmalat saw its net profit fall during the first nine months of 2010, chiefly due to a reduction in settlement costs linked to its 2003 bankruptcy.
Net profit for the nine months fell to EUR198.5m compared with EUR283.5m in the same period of 2009.
Parmalat said that it received settlements worth around EUR57.3m of net profit in the first nine months of this year, compared with EUR183.7m in the same period of last year.
Net revenue grew 9.5% to EUR3.1bn driven by strong performances in its Australian and Canadian subsidiaries and positive currency translation effects.
However, it said the growth was partially offset due to a decrease in sales volumes, mainly in Venezuela, compbined with the decision to streamline the portfolio of lower-margin products in South Africa and lower unit sales Italy.
EBIT fell to EUR253.3m from EUR365m for the nine month period, which the company attributed to the smaller proceeds generated by settlements with credit institutions and other creditors.
EBITDA was roughly flat against the previous year, reaching EUR265m against EUR265.3m achieved in the same period of last year.
The company said it has taken into consideration the "volatility of external factors" including foreign exchange rates, the economic situation in Venezuela and the global economic outlook, and has confirmed its guidance of EUR365m EBITDA for the full year.
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