Tnuva Group published its 2014 annual financial statements

  • 26-02-2015
Arik Schor, Tnuva Group’s CEO: The Group dealt with growing competition in all areas of its operation, and with increasing control and regulation while applying prudent expenses management and significant streamlining of operations

Today, February 26, 2015, Tnuva Group announced its audited results for the year 2014, through Mivtach Shamir Co.

Financial highlights:
  • The Group's revenues amounted to NIS 6.8 billion compared to approximately NIS 7.17 billion in 2013, a decrease of approximately 5.16%. The decrease is due to the placing of both, soft cheese and whipping cream, under price control,  reduction in the overall basket of price-controlled products, as well as a quantitative decline in the food market.
  • Gross profit amounted to NIS 1.9 billion, compared to NIS 1.97 billion in 2013, a decrease of approximately 3.75%. The gross profit margin is 27.92% compared to 27.51% in the previous year. The slight improvement in the gross profit margin derives mainly from a decrease in the production costs.
  • Operating income amounted to NIS 521 million compared to NIS 614 million in 2013, a decrease of approximately 15.24%. The decrease is mainly attributable to the abovementioned decrease in revenues and the decline in the Group’s share in investees’ profits. Such decrease was partly offset by significant streamlining of expenses.
  • Net profit for 2014 amounted to approximately NIS 410 million compared to NIS 520 million in 2013, a decrease of 21.9%. The decrease in net profit stems mainly from the abovementioned decrease in operating profit.
  • Net profit excluding other income and expenses and non-recurring taxes (including taxes in respect of prior years) amounted to NIS 368 million, compared to NIS 447 million, a decrease of 17.57%.
Arik Schor, Tnuva Group’s CEO, said: "In 2014, after many years, the food market experienced a significant decrease in addition to a strong competition in all areas of operation and the placing of additional products under price control. Tnuva continued its efforts to increase the variety of products available to its consumers and to adapt its products to consumer trends, while adding value in terms of product quality and adapting its products to its Program for Better Nutrition (the "Nutrition Compass"). Furthermore, the Group continued to produce high level of ready-to-use products in order to improve its solutions and increase the variety of products available to the professional market."
Schor added: "In addition to improving and adapting the Groups’ products basket, we continued our focus on improving intra-organizational processes, increasing production efficiency together with prudent management and adapting the expenses rate of all of the Group's business lines to the competitive environment. The alignment of expenses  allowed us to keep providing a suitable answer to the demand for our products and to the various market trends."
Yaacov chen, Tnuva Group’s Chief Financial Officer said: "the Group's results are significantly affected by recent years’ real estate activity and  tax effects. Excluding such effects, the net profit was NIS 368 million in 2014 compared to NIS 447 million in 2013, a decrease of 17.57%; compared to a decrease of 21.19% in the net profit in 2014 versus previous year.
The fact that the Group’s operations when measured excluding other income and expenses and non-recurring taxes exhibited a more moderate decline, highlights the continued efforts of the Group to adapt its cost structure to its revenues levels. This was executed by means of improving operational efficiency that yielded the Group a significant decrease in operating expenses, which, along-with the decline in the price of production costs, contributed significantly to offsetting the impact of declined revenues. Considering that prior year’s results included positive non-recurring effects that reduced general and administrative expenses, the improvement in operating expenses was even greater.
In 2014, the Group's capital expenses in major projects mainly the expansion of Tnuva's Tel Yosef Dairy, topped over NIS 380 million. Despite the vast investments, in 2014 the Group significantly improved its free cash flow, including investments in assets and real estate proceeds."
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