Carbonell sales slide as olive oil prices soar

DEOLEO announced losses of €9.7 million during the first six months of 2023 owing to soaring olive oil prices.

In contrast, the company was able to report net profits of €5.5 million between January and the end of June in 2022.

Spain produces more than half of the world’s entire olive oil supply and Deoleo, which is the world’s largest branded olive oil company, attributed the dip to their products’ higher prices. Supermarket chains’ own-label oil had eaten into their own market share, sources said.

The company, which owns household names Carbonell and Hojiblanca as well as the Koipe sunflower oil label, saw a 21.9 per cent fall in the sales, compared with the same period last year, Deoleo announced on September 25.

Shares in Deoleo, which has been 57 per cent owned by private equity firm CVC for the last 10 years, fell five per cent to 23 cents the same day.

Turnover for the company, which has production plants in Italy as well as Spain, grew by 0.6 per cent to €400.95 million thanks to passing on part of the price increase to clients, but margins were still reduced. Earnings before interest, taxes, depreciation and amortisation (EBITDA) plummeted by 43 per cent between this January and the end of June to €12.7 million.

“On the other hand, higher interest rates and the cost of renegotiating the company’s debt have had an impact of €8 million on financial services overheads during this period,” Deoleo said in its first half report.

Olive oil prices have doubled over the last two years owing to a reduction in crops caused by drought combined with a series of heatwaves.

The fall in production, Deoleo explained, was accompanied by a drop in the quality of the olives, which has resulted in a steep rise in the price of the best-quality oil.  Higher prices in turn discouraged consumption in the company’s traditional markets in countries like Spain and Italy, where households use large quantities of oil.

The fall in year-on-year sales has “reached double digits,” the company said.