Ebro posted a net profit from continuing operations of €56.8 million in the first half of 2011, 1.1% more than in the same period of 2010. The net profit posted in 1H 2010 is not comparable with that of 1H 2011 because the former included the dairy business.
The net turnover was €839.6 million, more or less on a par with that recorded in the first six months of the previous year.
The EBITDA or gross operating profit totalled €117 million, down 9.8% year on year due to three basic factors:
- The hike in the durum wheat price, which rose to practically double the price prevailing in the same period of last year (from 180 €/t to 340 €/t).
- The negative impact of the exchange rate, which has dented our earnings by €4.2 million.
- The delay in starting up the Memphis rice plant, which made it impossible to achieve the planned savings, although we estimate that it will be fully operational by the end of the year.
Despite the foregoing, the consolidated results show that Ebro is a healthy company, since even though it has been affected by external factors such as the foreign exchange effect or the inflationary curve of commodity prices, the underlying evolution of our businesses is very satisfactory: we have maintained our market shares through heavy investment (over €41 million) in advertising, our European businesses continue their positive evolution and both the rice and the pasta divisions have put new products on the market, such as Minute Steamers and Brillante Sabroz. Since part, if not all, of the adverse external effects will foreseeably be eliminated in the second half of the year, we can expect to recover the total contribution by the businesses by year-end.
The rice business is developing adequately, bolstered by the excellent performance of the European subsidiary Herba, which has grown year on year and contributed €30 million to the total EBITDA of the division. The North American business has been hampered to a certain extent by the delay in starting up the Memphis plant and the enormous efforts made in promotions to ease acceptance of the price rises.
The division posted a turnover of €405.8 million and an EBITDA of €55.8 million.
This division was hit during the period by the hike in durum wheat prices, which have fluctuated throughout practically the entire six months at around 320/340 euro per tonne. Having already put our prices up twice in France and North America, we may have to raise them again in September/October unless durum wheat prices come down.
The delay in passing these prices on to consumers, the restructuring in Germany due to the loss of large volumes of private brand sales on that market and the adverse effect of the exchange rate dragged the division EBITDA down in the first half of the year to €67.6 million. We are convinced that once the volatility is eliminated, the intense work by the Commercial and Marketing Departments and the successful launching of new products in both vegetable and quick-cooking pastas will restore the division’s earnings to the high levels obtained up to now.
The division turnover was €453.4 million.