Deoleo Records Loss on Nearly €1B Revenue

Summary

In 2024, high prices led to a 19 per­cent increase in sales rev­enue for the world’s largest olive oil bot­tler, but the com­pany reported a loss of €54.5 mil­lion due to ongo­ing legal issues, includ­ing a tax dis­pute in Italy. Deoleo is await­ing a deci­sion from Italy’s Supreme Court on whether to take up the case, as the com­pany con­sid­ers strate­gies to mit­i­gate poten­tial tar­iffs from the U.S.

High prices con­tributed to the world’s largest olive oil bot­tler report­ing €996 mil­lion in sales rev­enue in 2024, a 19 per­cent increase com­pared to the pre­vi­ous year.

However, its annual report shows that Deoleo lost €54.5 mil­lion last year, up from €34.3 mil­lion in 2023.

Officials cited the com­pa­ny’s ongo­ing legal issues, includ­ing the lit­i­ga­tion fac­ing Italian sub­sidiary Carapelli Firenze, as the main rea­son for the losses.

Based on two unfa­vor­able court rul­ings, the com­pany said it would allo­cate €64.7 mil­lion for back taxes and penal­ties if the rul­ings are upheld. Deoleo is wait­ing for Italy’s Supreme Court to decide whether to take up the case.

The dis­pute stems from a legal maneu­ver Carapelli used to import olive oil through a Swiss sub­sidiary. The oil was later bot­tled in Italy and re-exported out­side the EU.

Switzerland is not a mem­ber state but has a free trade agree­ment with the E.U.

Deoleo said it under­stood this prac­tice to fall within a European cus­toms law exemp­tion, allow­ing it to avoid pay­ing tar­iffs on olive oil imports. However, Italian cus­toms offi­cials dis­agreed and opened a case against Carapelli in 2014.

Deoleo finan­cial direc­tor Enrique Weickert said Italian cus­toms author­i­ties requested the first pay­ment in February.

“The result for the year is very neg­a­tive, but 90 per­cent of this result is related to the pro­vi­sion we have made for the lit­i­ga­tion in Italy,” he told reporters on a con­fer­ence call, adding that the com­pany has ​“very solid argu­ments” should the Supreme Court decide to hear the case.

Away from the legal issues, Weickert described 2024 as ​“dif­fi­cult and com­pli­cated.”

The com­pany strug­gled to source olive oil at the start of the year as olive oil stocks fell close to zero after the sec­ond-con­sec­u­tive poor har­vest across Spain and the Mediterranean.

In the year’s sec­ond half, the com­pany was impacted by steadily declin­ing prices as many coun­tries in the region pre­pared for har­vest rebounds.

Weickert said olive oil con­sump­tion fell by eight per­cent in Spain and the United States and two per­cent in Italy in 2024.

However, the com­pany indi­cated the busi­ness was still strong, point­ing to a ten per­cent increase in EBITDA, which reached €33.4 mil­lion. EBITDA is a per­for­mance met­ric that helps assess how much profit a busi­ness gen­er­ates from its core oper­a­tions.

Weickert added that the com­pany achieved its gross unit mar­gin objec­tive of €0.69 per liter due to the ​“effec­tive” trans­fer of raw mate­r­ial prices to sales prices.

The com­pany also cited sev­eral other pos­i­tive finan­cial indi­ca­tors, includ­ing a four per­cent decrease in net finan­cial debt, a 72 per­cent increase in its cash posi­tion and a bind­ing agree­ment to refi­nance €160 mil­lion of debt in June.

Against the back­drop of renewed tar­iff threats by United States President Donald J. Trump, Weickert high­lighted the U.S. mar­ket’s impor­tance to the com­pany.

He said about 38 per­cent of the company’s EBITDA is gen­er­ated in the U.S. He empha­sized that increased tar­iffs would ​“only make the American con­sumer pay more for a healthy prod­uct that comes from the Mediterranean basin.”

Deoleo has already con­sid­ered ways to min­i­mize the impact of poten­tial tar­iffs, such as ​“build­ing an addi­tional stock cush­ion” and pos­si­bly ​“bot­tling locally in the United States.”

• Deoleo
• EFE Agro