Tnuva announced its 2014 Third quarter financial statements

  • DECREASE IN OPERATING PROFIT AS A RESULT OF PRODUCTS PLACED UNDER PRICE CONTROL AND AN INCREASE IN THE PRICE OF RAW MILK
  • 30-11-2014
Arik Schor: "The Group dealt with growing competition, with additional products being placed under price control and with an increase in the price raw milk. The food market continues to decline and the "2014 Israel–Gaza conflict" also impacted the Group's results. Tnuva continues to take measures to adjust its expenses level by significant streamlining of operations."
 
Today, Tnuva Group published its results for the third quarter of 2014 through Mivtach Shamir.
 
Financial highlights of the third quarter:
  • The Group's revenues amounted to NIS 1.7 billion compared to NIS 1.78 billion in the corresponding period last year, a decrease of approximately 4.2%. The decrease is mainly due to  a decline in the food market, the placing of both soft cheese and whipping cream under price control at the beginning of January 2014, a reduction in the prices of controlled products, the impact of "2014 Israel–Gaza conflict" which lead to a decline in the Group's sales, and a decline in sales of frozen beef and eggs.
  • The gross profit amounted to NIS 451 million compared to NIS 502 million in the corresponding period last year, a decrease of approximately 10.2%. Such decrease resulted from the decrease in the Group's revenues and an increase in the price of the raw milk which was partially compensated by streamlining of expenses measures taken by the Group.
  • The gross profit rate dropped from 28.3% in the corresponding period last year to 26.5%, and reflects the foregoing decline in revenues and an increase of production costs.
  • The operating income amounted to NIS 114 million compared to NIS 158 million in the corresponding period last year, a 28% decrease. This decrease is attributable to the decline in gross profit and in the Group's share in investees' profits, which was partly offset by significant savings in sales and marketing expenses.
  • The net profit amounted to NIS 104 million compared to NIS 79 million in the corresponding period last year, a 32.1% increase. Such increase is attributable to substantial real estate revenues in the current period and to the negative effect recorded in the previous year due to the increase of the corporate tax rate commencing as of January 2014.
     
Arik Schor, Tnuva Group's CEO: "The Group dealt with growing competition, with additional products being placed under control and with the price increase of raw milk. The food market continues to exhibit a decline and the "2014 Israel–Gaza conflict" adversely affected the Group's results. Tnuva continues to take measures to adjust its expenses by means of significant streamlining of operations."
Schor added:  "The results of the third quarter reflect the challenges which the Group is facing in bringing added value to the consumers of its products, while substantially adapting its expenses to the competitive environment, to the price control and to the changing consumer behavior in the food market."
 
Yaacov chen, Tnuva Group’s Chief Financial Officer: "Substantial capital gains from real estate were recorded in the Group's financial statements. In addition, in the corresponding period last year, non-recurring tax expenses were recorded due to the regulator's decision to raise the corporate tax in January 2014 (from 25% to 26.5%), a decision which lead to a non-recurring tax expense of NIS 28 million in the third quarter of 2013. After excluding the aforementioned effects (and their related tax effect), the results of the third quarter amounted to NIS 83 million, NIS 26 million lower than the corresponding period last year. The net profit for the 9-month period ending on September 30 2014, after excluding the foregoing is lower by NIS 25 million from the net profit in the corresponding period last year."
 
Highlights of the results of the first nine months of 2014:
  • The Group's revenues amounted to NIS 5.15 billion compared to NIS 5.36 billion in the corresponding period last year, a decline of approximately 3.9%. Such decline is attributable mainly to the placing of soft cheese and 38% fat whipping cream under price control at the beginning of January 2014, a reduction in the prices of controlled products, a decline in the sales of frozen beef and eggs, and to the impacts of the "2014 Israel–Gaza conflict" which lead to a decline in the Group's sales.
  • The gross profit amounted to NIS 1.44 billion compared to NIS 1.46 billion in the corresponding period last year, a decline of approximately 1.9%. This moderate decline is the result of the reduced revenues, most of which was compensated by a decrease in production costs and by significant streamlining of expenses conducted by the Group compared to the corresponding period last year.
  • The gross profit rate rose from 27.3% in the corresponding period last year to 27.87% and reflects the decrease in production costs mainly in the first half of 2014 and the streamlining measures taken throughout the Group with emphasis on the third quarter.
  • The operating income amounted to NIS 383 million compared to NIS 431 million in the corresponding period last year, a decrease of approximately 11.1%. Such decrease is attributable to the decrease in the Group's revenues, the decline in gross profit, the non-recurring positive impact of general and administrative expenses in the first quarter last year, and the decline in the Group's share in investees' profits.
  • The net profit amounted to NIS 276 million compared to NIS 295 million in the corresponding period last year, a decrease of approximately 6.2%. The difference is attributable to  the foregoing reduction in revenues and profit.
  • The net profit, excluding other income and expenses and excluding non-recurring taxes, amounted to approximately NIS 269 million compared to NIS 294 million in the corresponding period last year, a decline of approximately 8.3%, which is explained by the foregoing decrease in revenues and profitability. 
email:
send >>
the press release was sent successfully
the press release has failed, please try again