Italian dairy group Parmalat has seen first-quarter net profit slump 18% as higher production costs and marketing expenses eat into margins.
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Net profit totalled EUR90.2m (US$139.26m) in the quarter, down from EUR110.3m posted last year.
Revenue in the quarter increased by 6.7% to EUR926.9m. Sales were bolstered by Parmalat’s aggressive pricing policy to offset the higher cost of raw materials, the group said.
In March, Parmalat said that it is targeting full-year revenue growth of 3-5% and EBITDA growth of 7-10%.
EBITDA for the quarter totalled EUR63.9m, down 15% from the first quarter of last year.
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By GlobalData“This negative performance is chiefly the result of sharply higher production costs, lower unit sales and an increase in non-recurring costs, offset in part by a favourable sales mix effect and more lucrative sales prices,” Parmalat said.
Nonetheless, the dairy giant stuck to its targets, stating: “The group has identified and is implementing actions in order to maintain the EBITDA targets foreseen for 2008 within the low range of approximately 7%.”
