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Parmalat Posts Net Profit Growth In H1, Despite Revenue Declines

By Branislav Pekic
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Parmalat Posts Net Profit Growth In H1, Despite Revenue Declines

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'.

European Performance

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.

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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.

Revised Guidance

Parmalat said that it was revising its full year guidance for 2018.

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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

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