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Parmalat eyeing double digit growth for 2012

By Mark Astley , 12-Nov-2012

Parmalat has reported double-digit revenue and profit growth for the first nine months of 2012, driven by strong performances by its US, Canadian, Australian and Russian segments.

In the nine months ending 30 September 2012, Parmalat recorded net revenue of €3.69bn – a €430.7m (13.2%) increase on the €3.259bn achieved in the first three quarters of 2011. EBITDA totalled €279.2m – a 14.6% increase on the €243.6m achieved in the same period of 2011.

The Parma-based firm expects EBITDA for the year to hit between €430m and €440m – an increase of around 15% on the €374.1m achieved for 2011.

“Despite persisting negative economic conditions in some geographic regions and heightened price competition in all markets, the Parmalat Group reported positive results both in terms of revenues and profitability,” said the firm’s third interim report.

“Increases in sales prices implemented in virtually all markets starting at the end of 2011, higher sales volumes in Australia, Russia and Africa and the appreciation of some currencies versus the euro account for most of this improvement.”

Consumption decrease

The firm achieved a 5% sales revenue increase in Canada, and African revenue – including sales from South Africa, Mozambique, Zambia, Botswana and Swaziland – grew by 5.2%.

Meanwhile, sales revenue fell by 3% in Italy. The firm has attributed this decrease to a fall in dairy consumption in the region.

US sales revenue increased by nearly 14% in the nine month period, while EBITDA increased by more than 30%.

“In the United States of America, an area where, as a result of the LAG acquisition, the Group re-established a direct industrial presence, with data stated in euros, subsidiary reported, in the last quarter, net revenues’ increase (€185m), up from €162.7m (13.7%) of the 2011 pro-forma results, thanks mainly to a strong performance in the food service, deli and an increase in retail sales,” the interim report added.

“EBITDA totalled €19.8m, up from €14.9m (32.9%) of the 2011 pro-forma results, benefitted from the price increases implemented during the year compared with the same period last year.”

US market presence

Parmalat only recently re-established a presence in the US market through its May 2012 $904m intra-group acquisition of Lactalis American Group (LAG). The deal is currently the subject of an investigation in Italy over concerns that it was completed in the interests of Parmalat’s parent company, BSA International.

LAG is also owned by BSA – a fact that has previously led to suggestions that the deal was merely a way for BSA to move money between its subsidiaries.

Two Parmalat minority shareholders, Italy’s industry minister Corrado Passera, and the Italian stock exchange regulator COSNOB raised concerns about the deal, with the latter questioning the use of Parmalat’s €1.5bn cash pile to finance the acquisition.

Parmalat spokesperson Fabio Caporizzi told DairyReporter.com earlier this year that the firm is confident that the investigation will find no fault with the acquisition.

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