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Frutarom Posts H1, Q2 2011 Financials

Posted: August 18, 2011

Frutarom Industries Ltd. (Haifa, Israel) reported 14.3% revenue growth over Q2 2011, reaching $130.6 million in sales, compared to $114.3 million in the same quarter last year. The growth derives from acquisitions that were completed during the first half of the year, and the strengthening of European currencies and the Israeli shekel against the US dollar also contributed to the growth in sales. In local currency terms, 3.3% sales growth was achieved in comparison to the same quarter last year.

Also, incomes in H1 2011 increased by 10.5%, reaching $251.6 million compared to $227.7 million in H1 2010. The company maintained its gross, operational and EBITDA profitability margins that characterized its activity in the last five years. Gross profit in Q2 2011 increased by 3.4% to $48.5 million and gross margin reached 37.1%. Operating profit in Q2 2011 totaled approximately $17 million, compared to $19.4 million in the same quarter last year. Operating margin in Q2 2011 totaled approximately 13%, and EBITDA in Q2 2011 increased and reached $22.2 million compared to $24 million in the same quarter last year while the EBITDA margin totaled 17%. Net profit in Q2 reached $12.3 million compared to $13 million in the same quarter last year, and net margin reached 9.4% of total incomes. Net profit in H1 reached a record $25.4 million compared to $24.1 million in the same period last year, while net margin reached 10.1% of total incomes. Earnings per share in Q2 2011 reached $0.21 per share as compared to $0.23 per share in the same quarter last year, and earnings per share in H1 2011 increased by 5.3% and reached a record $0.44 per share as compared to $0.42 per share in the same period last year.

Ori Yehudai, Frutarom’s president and CEO, commented, "We are pleased with the results achieved during the second quarter and the first half year in comparison with 2010, which was exceptionally strong. In recent quarters, we have witnessed a significant global trend of raw materials prices increase, including in many of the raw materials used by Frutarom in the manufacture of its products. This trend seems to have moderated somewhat in recent weeks. The actions that we took to protect our profitability, the pricing update that we performed, and our continuous efforts to improve our efficiency, have enabled us maintaining the profitability level that characterized our activity in the recent years.

"We intend to further expand our activity in the main areas in which we operate and accelerate growth and increase market share in emerging markets including: Asia, Central and South America, Eastern Europe and Africa, in which growth rates are higher. In H1 2011, we completed three acquisitions of savory activities in Europe: the savory activity of the Norwegian company Rieber & Søn, the assets and activity of UK company EAFI, and the assets and activity of Christian Hansen Italia. These acquisitions go along with our strategy in recent years to significantly expand our activity further within the savory field,” he concluded.