Natra slows profit drop

Natra slows profit drop

A stronger performance from its Europe, Middle East and Asia business enabled Spanish chocolate maker Natra slow its losses in the third quarter, with higher sales helping to offset increased input costs.

The company, which had seen soft sales in the region in the first half of the year, said EMEA revenue rose 8.7% in the third quarter. That propelled group-wide sales growth of 5.2% in the three month period, offsetting a first half sales decline. Natra reported nine-month sales increased 1.2%, climbing to EUR265.4m (US$331.5m).

While the company revealed profitability was hit by "ongoing pressure" from raw materials costs, Natra stressed it has been able to slow its rate of decline here also.

Like other chocolate makers, Natra has witnessed a steep increase in the price of cocoa and hazelnuts, which represent 50% of the group's total procurements. As a consequence, EBITDA in the first nine months of the year was down almost 60%, dropping to EUR6.7m from EUR16.5m in the same period of last year. The drop in third quarter EBITDA was less marked, however, dropping 9.2%.

The group racked up a nine-month net loss of EUR11.8m.

"Despite the difficult start of the year reflected in the first half results... the company estimated a gradual recovery of the business in the second half of the year," Natra noted. "This recovery, which already started to become apparent between the months of July to September, should result from the positive effect of the seasonality of the business for Christmas, continuous production for new customers from the factory in Canada and financial strength to meet working capital requirements."

Show the press release

 

3rd quarter 2014: Results note

Monday, 03 November 2014.

 

Sales growth of 5% in each of the two divisions and 5.73 M€ EBITDA in the third quarter, compared to 0.96 M€ from January to June.

  • The turnover of Natra’s cocoa and chocolate activity grew by 5.2% from July to September following the positive performance of its two divisions. This helped offset the slight sales decline in the first half and the company closed the first nine months of the year with sales of 240.71 M€ in its cocoa and chocolate business, 1.2% higher than in the same period last year.
  • Natraceutical contributed a turnover of 17.74 M€ compared to 18.16 M€ in June 2013, while the company managed this decrease in sales not no affect its gross margin, which stood at 76%. EBITDA stood at 2.03 M€ M € compared to 2.60 M€ in the same period last year by the decrease in sales.
  • EBITDA for the cocoa and chocolate business progressed from 0.96 M€ at the end of June to 6.69 M€ at the end of September, despite the ongoing pressure in the costs of raw materials.
  • Natraceutical improved its turnover by 3.2% between July and September and partially offset the sales decline from the first half. Sales in the first nine months totaled 24.75 M€ compared to 25.30 M€ in September 2013. The company's EBITDA stood at the end of September at 2.84 M€ compared to 3.50 M€ in the same period last year, mainly due to the sales decline in the first half and increased advertising spending in the third quarter.
  • Natra closed the first nine month of 2014 with a consolidated turnover of 265.47 M (+0.8% over the same period last year), EBITDA of 9.53 M€ (-52.4%) and net loss of 11.80 M€ compared with losses of 1.61 M€ at the end of June 2013, of which 11.41 M€ were registered in the first half of the year.

Original source: Natra