Ebro Puleva profit inches up narrowly

by Eric Schroeder
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MADRID, SPAIN — The Ebro Puleva Group posted net profit of €29,331,000 ($45,278,000) in the first quarter, up narrowly from €29,285,000 in the same quarter a year ago. Net sales for the year rose 10% to €717,398,000 ($1,107,457,000).

"The raw materials scenario has undergone profound changes over the past 12 months," the company said. "We reacted and the situation is now more stable. We have kept our volumes up in a complex environment and, consequently, now have a stronger market position. We increased our brand commitments, investing 2.4% more in advertising. Our positions gained in strength as a result. We have also furthered our progress, raising the category of our sales mix through innovation and development.

Ebro Puleva’s pasta division recorded operating profit of €12,899,000, down 27% from €17,639,000 in the same period a year ago. Net sales, meanwhile, rose 30% to €230,569,000 from €176,964,000. Ebro Puleva attributed the strong pasta sales to the incorporation of Birkel Teigwaren Gmbh, Germany’s largest pasta maker. The company also said that by the end of May it will have Ronzoni microwave pastas on the U.S. market.

The company’s rice division saw its operating profit soar 27% to €19,607,000 from €15,487,000. Sales rose 4% to €206,262,000 from €198,184,000.

"We had been preparing ourselves for the price tension on the rice markets and our strategic vision has proved entirely correct," Ebro Puleva said. "The medium-term prospects are even more promising. The second harvests in the south east of Asia will provide greater volume to ease tension in the producing countries. On a more local level, we are now able to confirm that Seville will be sowing an area very similar to last year, which is excellent last-minute news."

Ebro Puleva also announced it is considering the possible sale or spin-off of its sugar business, which generated operating profit of €12,003,000 on sales of €156,618,000 in the first quarter of fiscal 2008.

"If this sale or spin-off is finally made, the board considers that it would contribute value to the Ebro Puleva shareholders, on the one hand, and on the other it would permit a more individual development of the sugar business in the medium and long term, free from the constraints of being integrated in a set of essentially brand-based businesses," the company said.

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