Italian dairy group Parmalat has reduced its full-year EBITDA forecast on the back of weak domestic consumer spending.
Parmalat is forecasting EBITDA of EUR365m (US$523.7m) down from the previously targeted EUR385m.
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The company, which is now owned by French dairy giant Lactalis, said weak consumer spending in Italy and rising competition in Australia led to the cut to its forecast.
“The restrictive fiscal policies adopted in several developed countries, while necessary to ensure the sustainability of government debt, could also hinder economic growth, with a direct effect on consumer spending,” the company said yesterday (28 July).
However, Parmalat, which also reported its half-year results yesterday, expects its Canadian, South African and Venezuelan subsidiaries to reach their forecast results.
Parmalat reported a drop in first-half net income on lower EBOTDA and a fall in income from litigation settlements. Net profit almost halved to EUR76.4m from EUR148.6m in the same quarter of the previous year.
EBITDA fell 14.5% to EUR149.3m thanks to an increase in raw milk prices that Parmalat only partially covered with price increases. It also pointed to the impact of the floods in Queensland earlier this year and a fire at the production facilities of Centrale del Latte di Roma in Italy last August.
The company reported a decline in EBIT to EUR96.6m from EUR176.7m from the same half of the previous year, down on lower litigation settlements reached during the first-half of 2011.
However, net revenue increased 6% to EUR2.2bn, on the back of higher prices in Canada and Venezuela as well as the decline in the value of the euro against the main currencies where the group operates. Volumes rose 1% over the period.
The company also announced that it has appointed Pierluigi Bonavita as CFO, replacing Pier Luigi De Angelis, who has resigned.
