Osem Investments Ltd. (TASE: OSEM) today published its consolidated financial report for the first quarter of 2009. The global recession has not affected the food company's steady growth. Osem CFO Pinchas Kimmelman said, "40 consecutive quarter of operating profit growth, and activity that continues to generate cash, combine into a solid financial structure."
Osem posted NIS 847.1 million revenue for the first quarter, 8.6% more than for the NIS 780.1 million for corresponding quarter of 2008. Most of the growth was due to strong growth overseas, in part due to the consolidation of the results of companies acquired last year, US Middle Eastern dips maker Tribe Mediterranean Foods Company LLC and US meat substitutes maker Foodtech International Inc., which operates under the Veggie Patch label.
Osem's organic growth, net of acquisitions, was 3%. The economic crisis slowed domestic food sales growth to 1.5%, to NIS 676.8 million for the first quarter from NIS 667.1 million for the corresponding quarter.
Osem's international sales rose 50.7% to NIS 170.2 million for the first quarter from NIS 112.9 million for the corresponding quarter. The company attributed the growth to business expansion by meat substitute subsidiary Tivall Ltd. in Europe, and the two acquisitions in the US. Excluding the acquisitions, international sales rose by 10.9%, despite the shekel's appreciation during the period, especially against the euro and the pound.
Osem posted a net profit of NIS 77.1 million for the first quarter, 8.8% more than the NIS 70.8 million for the corresponding quarter. Cash flow from operations rose to NIS 113 million for the first quarter from NIS 86.1 million for the corresponding quarter.
The US market share of Tribe Mediterranean Foods was unchanged at 17%. Kimmelman said, "From a strategic perspective, this is a key growth lever for Osem in the future."
Osem intends to create synergy between Tribe and Foodtech, bringing to them the expertise of Sabra Salads Co. and Nestle in order to boost growth in this market.
Nestle (SWX:NESN) owns the 53.8% controlling interest in Osem. Osem's share rose 3% by early afternoon to NIS 40.50.
Osem distributed a NIS 100 million dividend on April 22.
Published by Globes [online], Israel business news - www.globes-online.com - on May 27, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009