Spanish food group Ebro Foods has recorded an increase in profits for the first quarter of the year as higher earnings from rice offset lower a decline in its pasta division.

Net profit for the three months to the end of March edged up 0.3% to EUR32.3m (US$42.7m), the company reported today (26 April).

EBITDA stood at EUR64.9m, an increase of 2.4% over 2011, boosted by a “good” performance from the firm’s international rice business.

Net sales, driven by the addition of the SOS, ARI and No Yolks brands to Ebro’s portfolio, grew by 25% to EUR530.9m.

In the firm’s rice division, sales climbed 41% to EUR284m, with EBITDA up 30% to EUR35.7m.

Pasta sales increased 11.5% to EUR263.4m, while EBITDA slid 17.2% to EUR32m as a result of high durum wheat prices in North America.

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Ebro said a stability in prices will begin to be reflected in the following months.

“In a scenario of lower consumption in the US retail channel and considering that the lower prices of durum wheat have not yet been reflected in the accounts, the consolidated results of Ebro show the strength of a business model based on the pursuit of profitability and geographic diversification,” the company said.

Kepler Markets analysts said the results were “poor” and below its expectations and market consensus.

“Pasta performed very poorly at the operational level as Ebro had to cope with high raw material costs in North America. Rice came also slightly below our expectations due to the integration of SOS, incorporating production for private labels in Spain.”

Click here to view the full earnings release.