Argentina: Exchange Rate Boosts Mastellone's Profits Amid Declining Sales
Source: dairynews.today
Mastellone, a leading dairy company in Argentina, saw its net profit soar to $54.565 billion thanks to exchange rate gains, despite a significant drop in sales.
Mastellone Hnos., one of Argentina's foremost dairy companies, closed 2024 with mixed financial results amid an economy plagued by declining consumption.
The company recorded a net profit of $54.565 billion, a sharp turnaround from a previous $28.721 billion loss.
This profit boost was largely attributed to the appreciation of the Argentine peso, which created accounting gains from foreign currency differences. However, the core business struggled with decreased consumption and profit margin pressures.
Over the past year, mass consumption in Argentina contracted by 17%, while the food sector experienced a 5.9% decline.
Despite the company's revenue reaching $1.449.631 billion, marking a mere 1.7% increase over 2023, Mastellone reported an operational loss of $7.393 billion, equivalent to 0.5% of sales.
This figure reflects a slight improvement from a 1% operational loss in the prior year. Mastellone's exports grew in volume, reaching 373 million liters of milk equivalents, a 15.1% increase from the previous year. However, the strong peso impacted their international competitiveness.
"Following a strong first quarter in volume and profitability, the situation gradually worsened due to increasing costs in pesos measured in dollars," noted their annual report. The company anticipates a challenging year ahead, while remaining hopeful that easing inflation might support a consumption recovery. Yet, the peso's continued appreciation could hinder export competitiveness.
"We aim to maintain our leadership in a market facing tightening profit margins and price-sensitive consumers," stated the company.
The company recorded a net profit of $54.565 billion, a sharp turnaround from a previous $28.721 billion loss.
This profit boost was largely attributed to the appreciation of the Argentine peso, which created accounting gains from foreign currency differences. However, the core business struggled with decreased consumption and profit margin pressures.
Over the past year, mass consumption in Argentina contracted by 17%, while the food sector experienced a 5.9% decline.
Despite the company's revenue reaching $1.449.631 billion, marking a mere 1.7% increase over 2023, Mastellone reported an operational loss of $7.393 billion, equivalent to 0.5% of sales.
This figure reflects a slight improvement from a 1% operational loss in the prior year. Mastellone's exports grew in volume, reaching 373 million liters of milk equivalents, a 15.1% increase from the previous year. However, the strong peso impacted their international competitiveness.
"Following a strong first quarter in volume and profitability, the situation gradually worsened due to increasing costs in pesos measured in dollars," noted their annual report. The company anticipates a challenging year ahead, while remaining hopeful that easing inflation might support a consumption recovery. Yet, the peso's continued appreciation could hinder export competitiveness.
"We aim to maintain our leadership in a market facing tightening profit margins and price-sensitive consumers," stated the company.
