Parmalat boasts doubled profits

Parmalat, the Italian food group at the centre of one of Europe's most painful corporate scandals, has reported a doubling in profit.

Its pre-tax earnings in the fourth quarter were 77m euros (£53m; $100m), up from 38m in the same period of 2003. Less welcome was the news that the firm had been fined 11m euros for having violated takeover rules five years ago. The firm sought bankruptcy protection in December 2003 after disclosing a 4bn-euro hole in its accounts. Overall, the company's debt is close to 12bn euros, and is falling only slowly. Its brands, well-known in Italy and overseas, have continued to perform strongly, however, and have barely lost revenue since the scandal broke.

But a crucial factor for the company's future is the legal unwinding of its intensely complex financial position. On Tuesday, the company's administrator, turnaround expert Enrico Bondi, sued Morgan Stanley, its former banker, to return 136m euros relating to a 2003 bond deal. That brought to 49 the number of banks that Mr Bondi has sued, a mass of legal action that could bring in as much as 3bn euros. The company has also sued former auditors and financial advisors for damages. And criminal cases against the company's former management are proceeding separately.
