Deoleo, the world’s biggest olive oil bottler, saw the value of its sales fall to €809 million last year – down from nearly €829 million in 2012 and €961 million in 2011 – and expects to achieve in the realm of €800 million this year.

In a press release containing some details of its provisional end of year results, the Madrid-based concern also reported Its EBITDA (earnings before interest, tax, depreciation and amortization – a broad gauge of a company’s financial health) for 2013 was €80 million ($100m), compared to €88.3 million the previous year and nearly €73 million 2011.

A considerable improvement in performance in the last quarter of the year had partially offset a poor first half, where volatility in ex-mill prices took a toll, it said. It also highlighted a major reduction in its net debt, which stood at €472 million at year-end, down from €624 million in 2012 and €1.5 billion at the end of 2009.

High hopes for new products

Regarding its forecast sales of about €800 million this year and growth in EBITDA of more than 20 percent Deoleo said these assumed a stable situation in regard to raw material, full implementation of cost its containment measures, increased sales thanks to new products “based on innovation”, recovery of volumes in mature markets – especially Spain, and growth in international markets.

CEO Jaime Carbó had said in November that the new products – which will bear the Carbonell label and are rumored to include an olive oil mixed with an omega 3-DHA – would be launched in January. A Deoleo spokesman said last week that despite the products not yet being released there had been no change of plan. “The launch will take place in due course,” he said.

Fidelity buys into Deoleo

Ebro Foods Deoleo also said in a notice on December 31 to the CNMV, the agency overseeing the Spanish stock market, that it had received resignation letters from two members of its board, proprietary directors Antonio Hernández Callejas and José Barreiro Seoane, citing professional reasons. Hernández is the chairman and Barreiro a previous vice chairman of the board of rice giant Ebro Foods, which holds a 9.3 percent stake of Deoleo. About three years ago, the former Spanish food group SOS sold its rice division to Ebro Foods before renaming itself Deoleo.

There was some speculation by stock market commentators that the resignations were a forerunner to Ebro reducing its stake in Deoleo, which last year commissioned J.P. Morgan, to advise, among other things, on a financial restructure in order to improve its long-term financial stability. On January 29, United Kingdom-based Fidelity International Ltd bought in with a 1 percent stake and Ebro is said to have recently sold nearly the equivalent.

European Commission asked to intervene over Deoleo staff, plant cuts

Meanwhile, Italian Member of the European Parliament Pier Antonio Panzeri (Socialists and Democrats) has raised concerns about Deoleo’s ongoing restructure and debt reduction measures, which he said have already seen a major reduction to its workforce and number of plants in Italy and Spain despite Deoleo holding a dominant position in most olive oil markets around the globe.

Noting first that the olive oil sector is a cornerstone of the Italian and Spanish food industry, Panzeri said the company’s changes “could have a very adverse impact on the food industry in the Mediterranean area, in particular the Italian food industry.”

In an as yet unanswered written question to the European Commission, Panzeri called for the Commission to convene talks with the company and unions to address the situation.

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