Frutarom Industries Ltd.’s third-quarter net profits surged 18.3%, boosted by recent acquisitions, a rapid growth strategy and an expanded range of high-profit margin natural products which capitalize on the growing global demand for natural, health-oriented food.
The company’s third-quarter net profit rose to $17 million from $14.4 million a year earlier. Third-quarter sales rose to $161 million, up 2.5% from $157.1 million a year earlier. Frutarom's flavor sales, the most lucrative of all the company's business activities, grew 4.6% to a record $119.4 million, accounting for 74.2% of total sales.
“We managed to identify the right companies, the growing markets, to assimilative innovation and leading technologies, to add leading executives from acquired companies to Frutarom's management and to exploit business opportunities, while making solid acquisitions at attractive prices,” said Ori Yehudai, the company’s president and CEO. “This excellent platform enables Frutarom to start benefiting from economies of scale.” (Read more about the company’s latest acquisitions).
For the first nine months of 2013, Frutarom's sales rose to $481.9 million and flavor sales grew 2.8% to $355.1 million. Net profit for the first nine months of 2013 totaled $48.7 million, 10.1% of total sales, up 17.4% from a net profit of $41.4 million, 8.8% of total sales, in the same period of 2012.
“The continued growth of the business, stability in the prices of raw materials used in the manufacture of our products and the contribution of the successful merger of recent acquisitions, the implementation of streamlining measures and improvement of cost structures, while taking advantage of global sites and bolstering global purchasing operations will enhance our profits and profitability down the line,” Yehudai added.