Turnover soars at expanded Pinguin, but borrowing puts crimp on profits.

Thanks mostly to the acquisition of Van Den Broeke Lutosa and Saivesen, sales of the Pinguin Group, Westrozebeke, Belgium, more than doubled for the six months ended Dec. 31, growing from 74,429,000 euros in 2006 to 171,506,000 in 2007, the company reported March 28. And that's not counting the Padley unit in the UK acquired last June.

Lutosa of Belgium accounted for 54.3 million euros and Saivesen of the UK for 19.9 million, for a total of 74.2 million from businesses acquired last year. Pinguin's core operations based in Belgium produced 51.5 million, and British operations other than Salvesen 44.2 million. Overall operating income from higher sales reached 188,537,000 euros, versus 89,924,000 a year earlier.

But financial results were off 5.5 million from the previous year, the company said. Apart from the general rise in interest rates, this is due to the larger drawdowns under credit lines to finance the Salvesen and Lutosa acquisitions. The positive effect of the capital increase, the invoice discounting and the real estate operation came into play only at the end of the financial year. Had it been possible to realize the positive impact right from the date of the takeover of Lutosa (Sept. 28 2007), the interest charges would have been 1.2 euros million lower.

EBITDA for the six-month period rose from 9,311,000 euros to 16,351,000, and EBIT from 6,119,000 to 10,270,000. "With the past restructuring and further operating improvements, Pinguin expects to be able to maintain its current profitability in 2008," the company said. "Pinguin will be continuing to focus on improving its cost structure and will, if necessary, proceed with additional restructuring."

A major investment program involving the automated packing facility and coldstore for the Belgian frozen vegetable division is now in its final stage, and is expected to be fully operational in the second half of the year. This should bring considerable efficiency improvements. Pinguin expects consolidated operating income in 2008 of 440 million euros. It is aiming for a REBITDA of nine percent, though this result will be determined in part by weather conditions and crop yields.