Parmalat Shares Hit Record Low

By: trademagazin Date: 2008. 07. 17. 00:00

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Shares in Italy's Parmalat slumped to their lowest level since the dairy group's 2005 restructuring, after the company cut its 2008 outlook for sales and core profit due to a worsening economy.

Italy's biggest listed food group said
that it expects revenue to rise 3 percent this year and exepects
earnings before interest, tax, depreciation and amortisation (EBITDA)
of around 350 million euros, down 5 percent. Parmalat previously said
it expected EBITDA to grow 7 percent this year and sales growth of 3
to 5 percent.

While Parmalat is facing a very
challenging environment, the sudden and significant change of 2008
guidance is a negative news, which comes after poor Q1 when however
the management had maintained a much higher guidance. The worsening
of the economic and financial crisis has affected the economic trend
of Parmalat Australia and Parmalat South Africa. To this situation, a
major decline of the Italian market must be added," Parmalat
said on Monday.

Parmalat lowered its EBITDA forecast in
May from a 7-10 percent range when it gave first-quarter results,
which saw an 18 percent drop in net profit due to the higher cost of
raw materials, as well as higher production and marketing expenses.