Following a tough tomato campaign in 2015, La Doria (MI:LDO) management has kept costs under control and delivered another quarter of results in line with expectations. The overarching strategy of shifting the production mix towards non-seasonal, value-added products with higher operating margins and lower volatility is paying off. La Doria continues to trade at a significant discount to its peers, and our DCF value of €15.84 (unchanged) suggests 26% upside to the share price.
Weak Q116 results, as anticipated
Consolidated sales of €168.3m were down 9% on Q115. As expected, there was significant deflation in tomato product sales prices following the tough negotiations during the 2015 tomato campaign. EBITDA of €14.7m was down 11% on last year, with margins down 20bps. The management has worked hard to mitigate the impact of the sales decline by improving efficiencies. We expect this trend to continue through Q2 and Q3. Q4 will depend on the 2016 tomato campaign and the associated customer negotiations.
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