Madrid / ES. (epg) Spain’s Ebro Foods S.A. announced that it has closed a very satisfactory first quarter, in which one of the main achievements was to have improved on the extraordinary profit posted in the first three months of 2022, the best first quarter in recent years thanks to hoarding triggered by the Ukraine war and the transport strike in Spain.
Cost inflation will continue to be the overall trend in 2023, for which we anticipate an increase of EUR 225 million over 2022, including price hikes in agricultural raw materials and auxiliary materials, energy, logistics and wages, which have risen by 6.05 percent in Spain. Nevertheless, we continue to invest heavily in our microwave product plants to increase their production capacity, which we expect to complete during the last quarter of this year in Europe and by the end of 2024 in North America.
Q1-2023 financial metrics
Against this backdrop, all our financial metrics improved during the period. Net turnover was up 11.6 percent year on year to EUR 810.15 million, boosted largely by the excellent performance of our Rice Division. Our adjusted Ebitda was 10.7 percent higher than in the same period of 2022, rising to EUR 96.3 million. Net Profit grew by 5.5 percent to EUR 43.8 million, after investing EUR 23.3 million in advertising, 24.4 percent more than in the first quarter of 2022, a clear indication of our commitment to bolstering and positioning our brands. We should point out the adverse effect of exchange rates and increased financial costs (by EUR 2.3 million) on this profit. Our net debt stands at EUR 743.9 million, EUR 18.5 million less than at year-end 2022. This figure includes CAPEX investments of EUR 31 million and an increase of EUR 51 million in working capital over year-end 2022, owing to the higher prices of stocks.
Core businesses performance
Rice Division: Commodity prices continued to hike, especially in the Basmati (+80 percent) and Japonica (+60 percent) varieties. On the other hand, the lower costs of maritime logistics from Asia partly made up for the inflation in raw materials. As regards the evolution of our business, our brands remain strong, maintaining their market shares despite the growing shares of private label brands, and our investment in InHarvest is giving us the results we expected. The division posted a turnover of EUR 642.7 million and an adjusted Ebitda of EUR 81.2 million.
Pasta Division: Although the price of durum wheat came down during the quarter, those of other raw materials, such as eggs, potatoes and milk, remained high. As for our business, in the dry pasta category Garofalo is still achieving double-digit growth in its principal markets, while in fresh pasta our French business has started to recover the volumes it lost in the last quarter of 2022, growing 16 percent year on year thanks to the good performance of gnocchi. The division posted a turnover of EUR 168.6 million and an adjusted Ebitda of EUR 18.4 million.