Spanish food group Ebro Foods has recorded an increase in profit in the first nine months of the year driven by the integration of businesses acquired last year and innovation.
Ebro posted a net profit of EUR110m (US$141.6m) in the nine month period, representing year-on-year growth of 19.1%. Profit before tax grew 24% to EUR178m.
The company said the "successful incorporation" of the businesses acquired in 2011 and the "success of the latest launchings", in both its traditional core businesses of rice and pasta helped drive results.
EBITDA amounted to EUR208m, a 12% increase on the prior year, while net sales grew 16% to EUR1.52bn.
In December last year, Ebro announced it would buy two brands from US sales and marketing firm Strom Products. In April, Ebro purchased the rice assets of the then SOS Corporacion Alimentaria.
Net profit up 19% to €110 million
Ebro posted a net profit of €110 million in the first nine months of 2012, representing a year-on-year growth of 19.1%. Profit before tax grew by 24% year on year to €178 million.
Net turnover, pushed up mainly by the incorporation of new businesses, totalled €1,518 million, 16% more than in the first nine months of 2011.
Significant results were also achieved in trading results. The EBITDA, or gross operating profit, grew by 12% to €208 million, while the EBIT, or net operating profit, totalled €165.6 million, up 10.5% on that recorded in the same period of 2011.
The company's final debt at the end of the third quarter was €297 million, €30 million less than in the same period of 2011, with a healthy balance sheet with which the company will maintain its comfortable financial position and be in a position to launch into new inorganic growth projects should the opportunity arise and meet the strategic objectives.
The company, within a general climate of sluggish consumption, has achieved a satisfactory evolution of consolidated results, thanks to our balanced geographical diversification, reduced exposure to the PIGGS nations, constant implementation of programmes to enhance our industrial operating efficiency, sound positioning of our brand portfolio, the successful incorporation of the businesses acquired in 2011 and the success of the latest launchings, in both our traditional core businesses of rice and pasta and related areas, such as potato and frozen foods.
Core businesses
RICE
The development of the rice business is very positive, underpinned by the excellent performance of the European and North American brands, stabilisation of commodity prices and incorporation of the SOS rice businesses, which have contributed €21 million to the total division EBITDA.
The latest launchings made in the United States, with Minute Steamers, and in Spain and France, with Brillante Sabroz and Riz à Poêler, continue providing outstanding results and increasing their market shares.
The division has posted a turnover of €839.9 million and an EBITDA of €117.7 million.
PASTA
As we mentioned when presenting the results for the first half of the year, this division has developed at an uneven pace on the different geographical markets in which it operates.
In Europe, the performance of our subsidiary Panzani has been very positive, making satisfactory progress in all areas of its business, especially its growth in the sauces sector and its successful branching into the potato business with Noisette à Poêler.
In the United States, with a more stable raw material situation and following a number of decisions, including a price adjustment and a management reshuffle, the ROE of our subsidiary New World Pasta (NWP) is starting to show signs of recovery.
In this context, the division turnover totalled €714.6 million, with an EBITDA of €97.8 million.
Projections for year-end 2012
Ebro expects to close 2012 with a turnover of €2,066 million, up 14.6% on 2011. Its EBITDA will grow by around 9% to €298 million.
Net profit is expected to reach €160 million, a year-on-year growth of 6%, with profit before tax up 14% to €253 million.
The debt at 31 December 2012 will be reduced to €278 million, almost €100 million less than the debt recorded at year-end 2011, with a ratio of 1x EBITDA. This is even more significant considering the negative impact of the dollar exchange rate and the higher dividend we have paid to our shareholders. In this regard, a sum of €69.2 million has been distributed over the year in ordinary dividend (three quarterly payments of €0.45 per share) and on 11 December an extraordinary dividend will be paid of 1 share for every 99, together with an associated dividend as advance tax for shareholders subject to withholding tax under the current tax laws, or the cash equivalent in other cases. This dividend in kind represents 1% of the company's capital.
