Parmalat, the Italian dairy giant, today shrugged off a fall in its share price and insisted that the company's business performance will improve during the second half of the year.

Shares in the company fell to their lowest level since Parmalat's restructuring in 2005 after the company lowered its profit forecast for this year.

However, Parmalat believes its fortunes will improve in the rest of this year and insists its decision to cut its profit guidance was sparked by the general economic downturn and not problems specific to the company. 

A spokesperson for Parmalat told just-food today: "Parmalat is not doing any worse than most other companies, our problems are not structural but are due to a slowdown in consumer demand and inflationary problems affecting the general economy."

The spokesperson added that Parmalt is set to implement a series of measures designed to boost the business including its bid to buy Australian dairy group Dairy Farmers.

The spokesperson continued: "The stock has not gone very well today but Parmalat is not the only company to suffer from the economic slowdown.

"We are waiting for the third and fourth quarters, which will be better."

Parmalat yesterday blamed economic problems at home and abroad for a cut in its profit forecast for 2008.

The Italy-based dairy giant said "a major decline" in the Italian market and worsening economic trends in South Africa and Australia had led it to predict full-year EBITDA would be down 5% this year on 2007.

"Damages suffered in the above mentioned markets have been only partially compensated by the positive trend of other subsidiaries and by the operational actions already implemented and in course of implementation," Parmalat said in a statement yesterday afternoon (14 July).

The company, however, said it sees turnover rising 3% this year.