Despite the fact that the first half of the year was plagued by uncertainties, neither the price crisis nor the shortage of cereals affected the Andalusian multinational Ebro Foods. The listed company indicated on Tuesday that the net amount of turnover amounted to 1,459 million euros, which represents a growth of 26% on what was invoiced between January and June 2021.
Ebro Foos explains this good evolution of the company “mainly thanks to the basic character” that its products occupy in the basket, as well as the “consumer loyalty” towards its brands and the “good supply management”, which facilitated a moderate increase in our rates.
This positive business development was also reflected in the growth in profits. The company said Adjusted EBITDA increased by 14.3% to €169 million compared to the same period in 2021.
Like-for-like net income – excluding the contribution of the dry pasta activities sold – fell by 12.4%, to €63.5 million, influenced by exchange rate differences, estimated at €12 million, and the loss generated during the transfer of Roland Monterrat, for an amount of 20 million euros. By isolating the Roland Monterrat effect, the net result would increase by more than 8.4%, specifies the company.
Net debt also increased and stands at 718.8 million euros, which represents an increase of 214.1 million compared to the end of the 2021 financial year. The company clarified that this figure includes firstly the payment of dividends made in April and June, as well as the regularization of the payment to be made in October, in total 88 million euros; on the other hand, an increase of 160.4 million euros in the working capital requirement compared to the end of the previous financial year, due to the strong positions taken on raw materials; thirdly, the acquisition of Inharvest, for 45.2 million euros; fourthly, the payment of corporation tax, for 63.9 million euros, to which must be added, fourthly, 44.2 million euros of CAPEX investments and, sixthly, the proceeds of 22 million euros from the sale of Roland Monterrat.
Results by profession
In the paddy field and with regard to raw materials, Ebro explains that the unfavorable climatic situation has caused a significant reduction in the cultivated area of japonica rice, both in Spain (70% in Andalusia and 90% in Extremadura), and in California, which a were only able to plant 60% of the area, and Italy, which also reduced the planted area by 20%. On the price side, the increases in basmati rice and long grain rice in the United States were notable.
The main positive point of this division, the listed company highlighted the strength of its brands and the good performance of products with high added value: aromatics, instants and microwaves. With this, the rice turnover amounts to 1,136.1 million euros, with an Ebitda-A of 146.6 million euros.
Respect to glue areaOn the commodity side, durum wheat remains at prices above 560 euros per ton and, failing to see what the end of summer harvest will look like in Canada, everything points to a second half of higher costs.
In the field of business, Garofalo completed a six-month period of growth in the main countries where it operates, highlighting increases in Italy, France and Spain. In the fresh pasta business, profitability in France and Canada was affected by the temporary delay in the implementation of new prices and the lack of personnel in the factories. Bertagnifor its part, increased its sales, particularly in the United States, where they increased by more than 20%.
One of the division’s milestones was the sale for 22 million of the French sandwich and fresh ready-meal company Roland Monterrat, which during its time in the Group failed to achieve the expected profitability targets.
The pasta division’s turnover amounted to 329.6 million euros, with an Ebitda-A of 29.2 million euros.
Extremely uncertain and difficult scenario
Despite the exceptional development of the activity, Ebreo Foods recognizes that it “is facing a very difficult year, with inflation which continues to climb constantly, an unfavorable raw materials context due to extreme climatic events, a consumer who is beginning to bet due to cost control and the evolution of their buying habits, and a major problem in the North American, French and North European labor market to find factory personnel”.
With all this, the group emphasizes that it has achieved satisfactory results during the semester thanks in large part to the set of a series of distinctive characteristics of its own, such as a solid supply chain and well diversified, the implementation of cost-saving measures, the growing investment in advertising and innovation and solid brands, with a wide range of differentiated references, capable of building a relationship of loyalty with the consumer.