Restructuring pays off for Vivartia

By Neil Merrett

- Last updated on GMT

Related tags: Milk, Dairy

Vivartia posted a 15.6 per cent increase in revenues to €517m, as
it continues to restructure its operations in South East Europe,
the company reported in on a pro-forma basis.

The group, Greece's leading producer of milk products, said it now expected to exceed its projected full year guidance forecasting a 6.4 per cent increase in sales on the back of the results. Profits from its operations for the six-month period ending 30 June were up by 16.7 per cent to €65m in comparative terms over the previous year. Operating margins also increased by 0.1 percentage points to 12.5 per cent. Along with improved sales volumes and operating margins, Vivartia added that restructuring of its operations both domestically and in the Russian market were significant contributors to its growth over the period. The results come on the back of group's plan to expand its presence in the market to become a major player in dairy and food production. Vivartia announced just last month that it had sold its entire 24 per cent stake in ice cream producer and retailer Dodoni to the National Bank of Greece Group as it continues to restructure its operations. A spokesperson for the company told that the agreement, thought to be worth about €5m, would allow it to concentrate on production of its core brands to improve the efficiency of its operations. Greece's dairy industry, particularly in terms of milk production, has undergone difficulties in recent years with companies diversifying into new market places and product lines to remain profitable. As part of this drive, Vivartia twice sold stakes in it operations between July and August, totalling 65 per cent to investment firm Marfin. The first phase of the acquisition gave Marfin a 30 per cent interest in the group in July. Vivartia's executive chairman Dimitris Daskalopoulos praised the sale for putting the company in a better position to compete globally with its rivals. The move continued the group's recent attempts to expand its operations into new markets. In June, Vivartia announced a new joint venture designed to tap into Saudi Arabia's bakery market, as well as the €18.7m acquisition of UMC, Bulgaria's largest dairy company. Through the purchases, Vivartia will also have hoped to show its commitment to both food and dairy production, after some concerns recently over the possibility it might move to offload some segments. In January of this year, Vivartia denied speculation that it was considering the sale of its milk production assets, suggesting it would continue looking for investment in expanding its operations instead.

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