Frutarom's first-quarter profit rose 3.8% and its flavors business comprised a larger proportion of total company sales amid booming demand for natural flavors and strength in North American and emerging markets.
For the quarter ended March 31, Futarom's net profit rose to $14 million from $13.5 million a year earlier.
First-quarter sales increased 0.6% to $152.2 million from $151.2 million a year earlier, and the currency effect was negligible. Flavor sales, Frutarom's core activity representing 73% of total company sales, grew organically by 1.5% to $110.6 million during the quarter. Fine ingredient sales for the quarter remained relatively level at $37.5 million.
"The past few quarters have brought to fruition a number of strategic processes which the company has been implementing and whose main affect is expected to be felt over the next few quarters, including an increase in the proportion of the flavors activity segment out of total company sales, with a focus on the increasing demand for natural flavors; an emphasis on unique, innovation based solutions combining taste and health," said Ori Yehudai, president and CEO of Frutarom.
The company, which recently announced a pact to acquire South African flavor company JannDeRee, also said growth in North America and in emerging markets is expected to continue this year and the next. Frutarom will continue accelerated expansion into markets with higher growth rates, such as the emerging markets of China and South East Asia, Central and South America, Eastern Europe and Africa and will realize the cross-selling options it has gained through acquisitions.
"Over the last few months, we have continued with the integration of the R&D infrastructures, which will position Frutarom at an even better starting point in the competition on market segments, both in the large multinational segment as well as in the provision of unique solutions for medium-size and local customers in developed and emerging markets, with an emphasis on private label customers," Yehudai added.