Max Brenner chocolate results sweet for Strauss

Strauss Group Ltd. (TASE:STRS) today published its consolidated financial report for the third quarter of 2009. Net profit fell 65.5% to NIS 90 million for the third quarter from NIS 262 million for the corresponding quarter of 2008. Net profit attributable to shareholders fell 75% to NIS 62 million from NIS 249 million.

Strauss's revenue fell 1.4% to NIS 1.62 billion for the third quarter from NIS 1.65 billion for the corresponding quarter. Organic growth, after neutralizing the impact of changes in exchange rates in the third quarter, was 3.2%.

Cash flows from regular operations rose to NIS 179 million for the third quarter from NIS 48 million for the corresponding quarter. Cash flows provided by ordinary operations rose to NIS 459 million in January-September from NIS 49 million in the corresponding period. Strauss attributed most of the increase to a decrease in accounts receivable balances to delays in collection following the launch of a new sales system in Israel in 2008, which caused a significant increase in accounts receivable. A secondary factor was a decrease in inventory.

Strauss Group chairwoman Ofra Strauss said, "Strauss Group is undertaking the measures necessary to adjust the company to the new external environment and effects of the global economic crisis, while pursuing with determination our strategy of several years standing. We are continuing to invest in our brands, innovation, infrastructure development, strengthening of strategic partnerships, and preserving and fostering people and skills."

Max Brenner chocolate sales rose 15.1% to NIS 28 million for the third quarter from NIS 24 million for the corresponding quarter. Sales growth was 11.7%, after neutralizing the currency impact. In July, Strauss opened a Max Brenner store in Philadelphia and closed the store on Second Avenue in New York.

Strauss's coffee sales declined by 0.4% to NIS 858 million for the third quarter from NIS 862 million for the corresponding quarter. Coffee sales in Israel were unchanged at NIS 148 million. After neutralizing the impact of currency exchange rates, sales growth was 7%. Organic growth, excluding acquisitions and exchange rate differentials, was also 7%.

Coffee sales in January-September were adversely affected by changes in exchange rates by the changes in the exchange rates of the different operating currencies, as well as the difficulty in raising prices in the prevailing macroeconomic conditions in some countries where Strauss operates, particularly Brazil, Russia, and Balkan countries. Strauss added that its coffee sales in Brazil, which accounts for a third of the company's total coffee sales, are growing rapidly and its market share is increasing.

Sabra Salad pro-forma sales in the US rose 36% to NIS 108 million for the third quarter from NIS 79 million for the corresponding quarter. Growth after neutralizing the currency impact was 25.2%.

Strauss's share rose 0.9% in morning trading to NIS 51.94, giving a market cap of NIS 5.43 billion.

Published by Globes [online], Israel business news - - on November 25, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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