Company Sales in the First Half of the Year Grow by 25% to 500 Million Euros
Deoleo, the oil group owning brands like Carbonell and Hojiblanca, reported a net profit of half a million euros at the end of the first half of the year, reversing the nearly 10 million euro loss recorded in the first half of 2023. This return to profitability comes after a 25% increase in sales, reaching 502 million euros, in a market environment of high olive oil prices.
The company attributes the improvement in profitability, which also translated into a 55% increase in EBITDA (earnings before interest, taxes, depreciation, and amortization), to the defense of the gross unit margin. This means the profit obtained per bottle sold increased by two percentage points during this period. “Thanks to the development of a commercial management strategy that, along with operational efficiency, financial discipline, and the strength of the group’s brands, has allowed us to maintain volumes and increase sales by 25%,” the packaging group explains.
Deoleo also highlighted that the first half of the year developed in a context of low product availability, which elevated raw material prices, and declining consumption in key markets. In Spain, the decline reached 18.1%, while in Italy, it was 10%.
Nevertheless, Deoleo identifies a slight easing in origin prices compared to the beginning of the year, though they remain at high levels. These prices are still 15% higher than a year ago and 130% higher than in the previous two campaigns. The company confirms positive outlooks for the next campaign, as expressed in recent months by its president, Ignacio Silva.
“The winter rains and the absence of extreme heat in the spring should translate into higher production,” the company explains. “As has occurred in recent months and as we approach this new harvest, prices should gradually decrease,” it adds, although Deoleo remains cautious due to the sector’s volatility.
“The first half of the current fiscal year has been challenging due to high raw material prices and falling consumption,” analyzes Ignacio Silva. “Despite the strong performance and positive expectations for the upcoming campaign, the second half of the year will also be challenging,” he adds.
Deoleo’s improved financial performance has enabled it to generate cash and increase its liquidity, while also reducing its financial debt by 1% compared to the end of 2023, settling at 118.6 million euros. The oil company believes that the positive outlook for the next campaign and the favorable business evolution will facilitate the refinancing of the main tranche of its liabilities, which matures in 2025. “We are currently evaluating the received offers with the aim of closing the operation before the end of 2024,” the company notes.
