Ebro Puleva plans to sell its sugar division 06/05/2008 00:00

Leading Spanish food company plans to either sell or spin off and float its sugar division.

6 May 2008

MADRID - Leading Spanish food company Ebro Puleva said Monday it is planning to either sell or spin off and float its sugar division.

The proposal will be put to a vote by shareholders at their annual meeting slated for 9 June.

The move comes after a reform of the sugar industry in Europe under which Ebro's quota was halved. In a statement to the National Securities Commission (CNMV), Ebro said that the "viability of the sugar business has been guaranteed for forthcoming years" as a result of the restructuring of the sector.

The sugar division had sales of EUR 156.6 million in the first quarter, with gross operating profit in the form of EBITDA of EUR 17 million.

Ebro said that if the sale or spin-off were to go ahead it would reduce annual group turnover from EUR 2.685 billion to EUR 2.031 billion. Likewise, EBITDA would reduce annual group turnover from EUR 306 million to EUR 226 million.

It would also reduce group debt by an amount determined by the conditions of the sale.

Ebro also reported a slight increase in its net profit in the first quarter to EUR 29.3 million as sales rose 10 percent to EUR 717 million. EBITDA fell 2 percent to EUR 73 million due to the depreciation of the dollar and brand advertising spending of some EUR 22 million.

Trading in Ebro shares was briefly suspended by the CNMV yesterday prior to the announcement.

The stock closed down 5.67 percent at EUR 12.98.

[El Pais / Adrián Soto / Expatica]