Deoleo, the Spanish company behind Bertolli and Carbonell olive oil, saw first-half EBITDA drop as it upped advertising and spent on promotions amid pressure on consumption.
In the six month period, Deoleo recorded a net profit of EUR4.2m (US$5.6m), compared to a net loss of EUR4.2m last year. The company’s bottom line benefited from lower one-off charges and finance expenses.
EBITDA, however, fell to EUR27.5m in the period, 27.7% below last year, driven in part by an increased investment in advertising, a fall in consumption and price pressure from private label.
Sales were also lower, sliding by 4.5% to EUR381.3m, hurt by a drop in olive oil consumption in Spain and Italy, two countries Deoleo says was “hit hard by the crisis economically”. Volatile raw material prices and lower bulk oil sales also contributed to the decline.
Southern Europe region remains the largest contributor to Deoleo’s total turnover (34.2%), followed by Spain (26.4%) and North America (21.1%).
The company said sales in its international markets are “normalising” after a “slight” decline in the first quarter due to the rising prices of olive oil. Deoleo also opened a commercial office in China during in March, which has added to the recent openings of offices in India and Malaysia.
Additional reporting by Dean Best.