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March 11, 2016

Parmalat books mixed 2015 results

Parmalat saw revenue and EBITDA rise in 2015 but reported a fall in net profit due in part to the volatility in Venezuela.

By Dean Best

Parmalat saw revenue and EBITDA rise in 2015 but reported a fall in net profit due in part to the volatility in Venezuela.

The Italy-based dairy group, in which Lactalis owns a majority stake, booked a 15.1% increase in net revenue to EUR6.42bn (US$7.14bn).

EBITDA was up 1.1% at EUR444.5m.

However, net profit was down 28.1% at EUR147.6m. Parmalat booked higher depreciation, amortisation and impairment losses, as well as financial expenses of over EUR27.6m.

Alongside the results, Parmalat also announced it would have to elect a new board after three of the directors nominated by Lactalis quit their positions.

Parmalat provided results that excluded the contribution from acquisitions, currency fluctuation and the impact of hyperinflation in Venezuela. It said net revenue rose 8.8%, EBITDA increased 22.1% and net profit jumped 30.9%.

The company said the increase in revenue came despite falling sales in North America and Europe, which were dampened by a fall in sales prices amid the lower cost of raw milk.

The jump in underlying EBITDA reflected “growth in all of the areas where the group operates, particularly in the US, Australia, Africa and Latin America”. Parmalat pointed to higher volumes, “a better sales mix” and an “optimisation” of promotions.

In 2016, Parmalat expects revenue – excluding its Venezuelan subsidiary and foreign exchange, as well as considering the pro forma 2015 comparative data from its recent acquisitions – to rise 5%. It forecast EBITDA would increase by “about 10%”.

However, Parmalat added: “Economic conditions in the countries where the group operates are not expected to be particularly favourable during the first six months of the year, as growth will be concentrated mainly in the second half, when the expected results from the efficiency enhancing plan and reorganisation processes that are being implemented for the new acquisitions will be achieved.”

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