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Parmalat reports ‘all-time high’ profits on back on emerging market success

By Mark Astley+

21-Mar-2013

Parmalat reports record profits on back on emerging market operations

Parmalat has reported all-time high revenue and profit for 2012 – a feat it has attributed to an “outstanding performance” from its emerging market operations and “greater geographical diversification” through its acquisition of Lactalis American Group (LAG).

The Parma-based dairy processor reported double digit growth in both revenue and profit for the year ended 31 December 2012. On the back of these results, Parmalat has branded 2012 as the “best year in its history.”

Net revenue increased by 14.6% to €5.2bn – a €735.9m increase on 2011. While EBITDA for the twelve month period hit €439.2m – a €65.1m (17.4%) increase on the €374.1m earned in 2011.

“All product categories provided a significant contribution to the revenue increase, as did the greater geographical diversification brought by the acquisition of Lactalis American Group (LAG) in the United States,” said the company in a statement accompanying the results.

“Despite the crisis that is affecting the world’s main economies, the Group has begun to grow again thanks to an outstanding performance in the emerging markets and a renewed focus on its industrial vocation as the drive of its business activities, which enabled it to improve its competitive capabilities in the mature countries,” it added.

Canada, Australia and Russian profits…

Parmalat reported revenue and profit growth across several of its businesses in 2012.

Canadian revenue and EBITDA increased to €1.718bn and €162.7m respectively. Revenue from its Australian business increased 14% to €982.2m, while EBITDA increased by 20.6% to €77m.

In Russia, net revenues grew 14.6% to €106.9m, while EBITDA jumped by 54.6% to €11.6m.

In Italy, the company reported decreased net revenue of €942m. EBITDA also fell by 2.6% to €93.6m. Parmalat has attributed the profits drop to the raw milk price increase in 2012.

Combined African revenue increased by 6.5% to €439.3m while EBITDA fell by 12.2% to €36.3m.

In South America – a sales region that includes businesses in Venezuela, Colombia, Ecuador, Paraguay, Mexico and Brazil EBITDA for the year fell 14.1% to €25.4m despite a revenue increase of 28.7%. Parmalat has attributed the fall in profits to the performance of its Venezuelan business.

LAG deal “laid the foundations” for US development

Parmalat’s US business reported net revenue of €387.1m and EBITDA of €46.7m for the second half of the year – an increase on H2 2011 results.

The company has praised the LAG deal for allowing it to gain access to the “world’s most important dairy market.”

“In the United States of America, the world’s most important dairy market, the Parmalat Group achieved an important competitive position, thanks to the acquisition of Lactalis American Group Inc. (and its subsidiaries),” said Parmalat.

“With the acquisition of LAG, Parmalat laid the foundations for achieving a more attractive development of its portfolio, having gained access to the world’s most important dairy market: that of the United States.”

The company revealed LAG’s better-than-expected full year results for 2012 earlier this month following a decision to disclose the information to “confirm the profitability” of LAG and “clarify some true and exploitable news.”

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