August 2, 2012

 

Parmalat's profit rise in first half of 2012 boosted by emerging markets

 

 

Italian dairy firm, Parmalat, has revealed a 7.8% rise in total profit for the January-June period of 2012, due to better emerging market sales and profit boosts from its main markets.

 

The firm, which is owned and controlled by French dairy firm, Lactalis, saw revenue increase by 6.1% to EUR2.2769 billion (US$2.803 billion) during the six month period - a EUR130 million (US$160 million) increase on the EUR2.1469billlion ($2.643 billion) recorded during H1 of 2011.

 

Parmalat has attributed the revenue increase to higher sales from its African, Russian and Australian divisions and improved margins from its Italian and Canadian dairy divisions.

 

The Parma-based company reported consolidated EBITDA of EUR163.3 million (US$201 million) - a 9.4% increase on the EUR149.3 million (US$183.7 million) for the same period of 2011.

 

Parmalat spokesperson, Fabio Caporizzi, said that in "this current environment, to have a result like this is a double win for us."

 

Caporizzi added that in future, the firm may have to rely on these emerging markets to prop up ailing West European dairy demand.

 

"There are some regions where we are really performing at the moment. For instance, we are seeing strong performances in Australia, Russia and Africa," said Caporizzi.

 

Parmalat's Australian division reported revenue of EUR460.1 million (US$566.2 million) for the first half of 2012 - a 15% increase on H1 of 2011. EBITDA rose to EUR22.3 million (US$27.4 million) compared with the EUR13.5 million (US$16.6 million) earned last year.

 

The firm has attributed the result to increasing demand for its flavoured milk and yogurt offerings.

 

The firm's rest of Europe division, which includes subsidiaries in Portugal and Romania, recorded US$8 million in EBITDA for the January to July period - driven by strong performance in Russia.

 

Parmalat also has a presence in several Africa countries, including Mozambique, Zambia, Botswana, Swaziland and South Africa - where it has established a leading position in the cheese and flavoured milks market.

 

"We are confident that this sales trend will continue in Russia, Africa and Australia and that dairy demand in these regions will help us meet the targets set by the board as in the first half of the year," added Caporizzi.

 

Elsewhere, South American EBITDA fell to US$13.5 million from US$20.9 million in H1 of 2011. Parmalat has attributed this to the "challenging conditions" faced by its Venezuelan subsidiary.

 

Parmalat strengthened its position in this South American market and made its first venture into the US earlier this year, through the acquisition of Lactalis American Group (LAG). Caporizzi expects that in time, these regions could provide the "strong results" needed to offset the European consumption crisis.

 

"Currently we are suffering in some South America countries due to difficult market conditions. But, it is an important area of focus for us. We expect to get strong results from this region in the near future," he said.