Vidrala sees slightly higher 2024 net profit after Brazil's acquisition (updated)

Vidrala SA

24/07/2024 15:48

(Recasts lead with guidance, adds CEO quote and shares move)
    By Matteo Allievi and Jakub Olesiuk
       July 24(Reuters) - Spanish glass bottle maker Vidrala
 VID.MC  expects net profit this year to be slightly higher than
in 2023 as the purchase of Brazil's Vidroporto will likely
offset weakness in Europe, the company's head of investor
relations said on Wednesday.
    The company booked a net profit of 233.4 million euros in
2023 ($253.43 million).
    "We have little visibility but our central scenario is a
moderate demand. (...) We are expecting very slightly increasing
volumes for the year as a whole," Inigo Mendieta said in an
interview.
    European glassmakers have seen a softer-than-expected
rebound in the first half of the year as customers cut their
orders amid a fragile global economy. 
    Vidrala's net profit fell 6% in the first six months of 2024
from a year ago to 120.8 million euros.
    Sales from January to June amounted to 830.4 million euros,
showing organic growth of 0.7% from one year ago, as
diversification into new markets offset weakness in its more
mature markets.
    "Unlike in Europe, in Latin America population growth and
the developing middle class should drive consumption," Mendieta
said.
    The group said Brazil should account for 15-20% of its total
sales at the end of the year from a 12% in the first six months.
    Mendieta did not rule out further acquisitions in the
region, but said that the priority was to ensure the current
sales capacity following the Vidroporto acquisition.
    Vidrala also reiterated its 2024 core earnings guidance of
above 450 million euros, unlike its France-based peer Verallia
 VRLA.PA , which was forced to revise down its core profit
target earlier this month due to faltering demand. 
    Shares were up around 2% at 1422 GMT.
    
    ($1 = 0.9218 euros)

 (Reporting by Matteo Allievi and Jakub Olesiuk, editing by Inti
Landauro)
 ((matteo.allievi@thomsonreuters.com))