Dairy giant Parmalat has closed the first half of 2018 with a net profit of €39.9 million, up 30.4% compared to a year ago.
Net revenue, however, fell by 7.3% to €3.03 billion, with the company's gross operating margin down 20.8% to €146.6 million.
The company said that a lower negative contribution from its Venezuela business and a reduction of income tax expense in Italy helped boost net profit, 'offsetting the effect of a deterioration in operating activities'.
In terms of geographic presence, net revenue in Europe amounted to €570.1 million and EBITDA amounted to €55.8 million. Italy, the main market in which Parmalat operates, showed a negative trend in consumption.
In North America, net revenues amounted to €1.12 billion and EBITDA was €86 million. The weakening of the US and Canadian dollar negatively impacted net sales and operating margin, equal to about €97.5 million and about €8.1 million, respectively.
In Latin America, excluding the hyperinflation of Venezuela, net turnover amounted to €578.4 million and gross operating margin stood at €14.9 million.
On a LFL basis, and with the exception of Chile and Venezuela's contribution, net sales in Latin America fell by 8.5% and EBITDA down by 7.4%, mainly due to the deterioration of the sales mix of products.
In Africa, net revenues amounted to €215.2 million and gross operating margin amounted to €9.5 million. Net sales in Oceania reached €502.6 million, and EBITDA amounted to €0.3 million.
Parmalat said that it was revising its full year guidance for 2018.
Due to increases in the cost of raw materials and 'the strong commercial tensions linked to the necessary adjustments of sale prices', it is forecasting a decline of -1% in net turnover and between -3% and 0% in terms of EBITDA.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine