Ebro Foods reports 2.1% rise in Q1 2013 net earnings

Spanish rice and pasta manufacturer Ebro Foods has reported a 2.1% increase in its net earnings to €32.9m for the first quarter of 2013, compared with €32.2m for the same period in 2012.

The company posted a 5.4% decrease in net sales to €502m, compared with €530.9m in the previous year, primarily due to lower prices in the pasta division.

Ebro Foods posted earnings before interest, taxes, depreciation, and amortization (EBITDA) or gross operating profit of €64m, sliding 0.8% year on year due to the exclusion from consolidation of the Nomen brand.

The decline in gross operating profit was also due to an increase in investment in brand advertising to €24.2m, €1.7m more than in Q1 2012.

Ebro Foods said that the consolidated earnings for the quarter confirm that the company opted for the correct strategy to achieve long-term sustainability with a business model based on differentiation and the search for profitability.

The profitability was achieved through the generation of synergies and transfer of know-how among the different companies within the group, geographical diversification, a commitment to brands, and development of a quality and R+D policy, the company said.

Segment-wise, Ebro Foods’ rice division posted net revenues of €279m and EBITDA of €36m, driven by the positive performance of its European and North American brands, a stable commodity market in Europe, and strong progress of its newly launched products

The company’s pasta segment posted revenues of €263.2m and EBITDA of €30m, slightly offset by lower prices in the US, the increase in advertising, and a loss of consumers’ purchasing power in France

At the end of the quarter the company’s final debt stood at €258m, €73m less than in the same period of 2012.

During the quarter the company was able to introduce new inorganic growth projects, such as the recent acquisitions of 25% of the Italian rice company Riso Scotti and the rice mill in the state of Haryana, in India.