Brazilian dairy firm LAEP Investments posted a third-quarter net loss of BLR$93m (US$40.1m), the company said today (17 November).

The net loss compared to a profit of BLR$12.9m the year before.

LAEP, the controller of Parmalat Brazil, posted an 11% increase in net operating revenue to BLR$339m, while gross profit fell 35% to BLR$56.7m.

In the quarter, the EBITDA margin was negative by BLR$94.4m versus a positive BLR$29.7m a year earlier. This was mainly due to the high raw milk prices and low retail prices caused by competition in the UHT segment, as well the sale of inventories, which the company reduced to "adapt to the new sales level".

LAEP said it is abandoning its initial business strategy of expanding and consolidating through its brand portfolio, given the negative margins of the regional brands in the UHT segment.

Consequently, it has cut back on production and sales volume, leading to a hefty reduction in costs and expenses.