Carrefour turns profitable for Electra Consumer Products

Carrefour branch credit: Pnina Ben Shalom
Carrefour branch credit: Pnina Ben Shalom

Electra Consumer Products’ share price has shot up, as its investment in the Carrefour franchise finally starts to bear fruit.

Electra Consumer Products (TASE: ECP), headed by Zvika Schwimmer and part of the Elco Group (TASE: ELCO) controlled by the Salkind brothers, continues to convert Mega and Yeinot Bitan supermarket branches to the Carrefour format, and after several difficult years it is starting to see the fruits of that effort.

In the third quarter of this year, Carrefour branches produced a profit for Electra Consumer Products, amounting to NIS 820,000, which compares with a loss of NIS 23 million in the corresponding quarter last year. This small profit is of course financially insignificant, but it signals that the move is starting to work. So far, Electra Consumer Products has converted 110 supermarket branches to the Carrefour brand (eight in the third quarter) out of 149 branches altogether, leaving 26 Mega branches and 13 Yeinot Bitan branches to go.

For the first nine months of 2024, Carrefour Israel still shows a loss, as the small third quarter profit does not cover the losses of the previous six months. Carrefour Israel posted a loss of NIS 46.2 million for the first nine months, representing a considerable improvement on the NIS 148 million loss in the corresponding period of 2023.

Electra Consumer Products’ revenue from the supermarket sector rose 7.2% in the third quarter to NIS 890 million, and operating profit before net other income and restructuring expenses shot up 2.5 times to NIS 38.2 million. For the first nine months, the food sector contributed NIS 2.5 billion to Electra Consumer Products’ top line, and switched to an operating profit before net other income and restructuring expenses of NIS 66.7 million, which compares with an operating loss of NIS 71.8 million in the corresponding period of 2023.

In May this year, Electra Consumer Products divested itself of its stake in 7 Eleven Israel, and sold the remaining branches to the Seven Express chain. In this case, Electra Consumer Products decided to cut its losses (which amounted to some NIS 70 million) quickly.

In the electrical retail sector too, the company has seen considerable improvement. It has 85 branches of electrical goods stores Mahsanei Hashmal and Shekem Electric. Third quarter sales rose 18% to NIS 678 million. The company says that excluding the duty free branches, whose business has been hit hard by the Swords of Iron war and the decline in passenger traffic at Israel’s airports, revenue in the sector rose by 22.5%.

Taking all of the group’s activity together, Electra Consumer Products’ total revenue in the third quarter was NIS 1.98 billion. Operating profit before net other income and restructuring expenses rose 27% in comparison with the third quarter of 2023 to NIS 91 million. The company posted a net profit for the quarter of NIS 27.1 million, which compares with a net loss of nearly NIS 16 million in the corresponding quarter.

For the first nine months of 2024, Electra Consumer Products posted a net profit of NIS 20.6 million, which compares with a net loss of NIS 130.6 million in the corresponding period of 2023.

The company makes no mention in its financials of the reform in imports of electrical goods, but it should benefit from it. In mid-August, the first stage of the reform came into effect, allowing the import into Israel of various products such as computers, microwave ovens, printers, and radio receivers with no bureaucracy, with the aim of opening up the local market to competition and lowering prices to the consumer.

The second stage of the reform is more significant for Electra Consumer Products. It includes more electrical goods such as refrigerators, washing machines, television sets, dishwashers, dryers, and so on. The Ministry of Energy estimates the electrical goods market in Israel at NIS 10 billion annually.

Electra Consumer Products’ share price on the Tel Aviv Stock Exchange is up by about 12%, bringing the company’s market cap to over NIS 2 billion. The share price is up 26% for the year to date, although in the past three years it has fallen by 45%.

Published by Globes, Israel business news - en.globes.co.il - on November 25, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Carrefour branch credit: Pnina Ben Shalom
Carrefour branch credit: Pnina Ben Shalom
Unframe founders credit: Yossi Yarom Israeli AI enterprise platform co Unframe raises $50m

Unframe’s turnkey AI solutions enable companies to solve any enterprise AI use case at scale with fully functional, customized AI solutions for businesses in a matter of hours, rather than months.

Combatica credit: Combatica Combatica launches next-gen VR AI training platform

The Israeli company's virtual reality platform includes 50 AI generated scenarios, seven maps and even situations for operating night vision.

Shekel credit: Shutterstock Vladirina 32 Shekel volatility after US tariffs announcement

The shekel is weakening sharply against the euro, which is gaining following the unveiling of Donald Trump's tariffs plan.

Minister of Finance Bezalel Smotrich credit: Noam Moskovitz Knesset Spokesperson Treasury assesses potential damage to Israel's US exports

Israel will be charged a higher tariff on its exports to the US - its biggest export customer - than Turkey and the UAE.

Iranian flag credit: Shutterstock Why inflation haunts Iran

With a month-on-month increase of 3.3% and an annual rate of 37.1%, inflation reflects the struggles of millions of Iranians.

APM merges with lawyers from Doron, Tikotzky Kantor, Gutman credit: Eyal Merilos APM merges with 12 lawyers from Doron, Tikotzky Kantor, Gutman

With the addition of these 12 lawyers, Amit Pollak Matalon & Co. will now have 135 lawyers.

US President Donald Trump credit: Reuters Sipa USA Israel on list as Trump unveils tariffs

Relatively low reciprocal tariffs will be imposed on Israeli goods sold in the US.

Deflated unicorn credit: Shutterstock Big Tech 50 reports more huge falls in startup valuations

Israeli R&D partnership Big Tech 50 reports that an investment of $2 million in Orcam made in 2021, shrank to just $31,000 at the end of 2024.

NextFerm technologies based on yeast credit: NextFerm Food-tech co NextFerm suspends operations

The company, which produces food ingredients in yeast without genetic engineering, cannot pay its debts and is seeking a buyer.

Minister of Finance Bezalel Smotrich credit: Shlomi Yosef OECD sees recovery in growth but high inflation

The OECD Israel Economic Survey 2025 recommends that the Israeli government take several restraining measures, in order to exit the economic storm created by the war.

Dano Ben-Hur credit: Dror Sithakol Statisticians contradict BoI on impact of housing finance deals

The Central Bureau of Statistics insists the impact of 20/80 buy now pay later financing deals on the real estate market and housing prices is minimal.

Governor of the Bank of Israel Amir Yaron  credit: Government Press Office Debt fears top Bank of Israel's concerns

Most unusually, Governor of the Bank of Israel Amir Yaron's press conference last week did not focus on inflation and the impending interest rate decision.

US President Donald Trump  credit: Reuters/Leah Millis Israel moves to avoid Trump's tariffs axe

Minister of Finance Bezalel Smotrich has signed an order canceling all tariffs on imports from the US. The impact will mostly be on agricultural produce.

Forbes Rich List credit: Shutterstock Maslowski Marcin Wiz founders ranked in Forbes 2025 Rich List

There are a few dozen Israelis listed in the 2025 Forbes Real-Time Billionaires List including Wiz founders Assaf Rappaport, Yinon Costica, Roy Reznik and Ami Luttwak.

SatixFy CEO Nir Barkan credit: Ariel Barkan Canada's MDA Space to buy Israeli satcom co SatixFy

MDA Space will pay $269 million for the Israeli company, including taking on a $76 million debt and a 75% premium on SatixFy's closing price on Nasdaq yesterday.

Raising dollars credit: Shutterstock Israeli startups raised over $1b in March

Israeli privately-held tech companies have raised $2.1 billion in the first three months of 2025, according to IVC-LeumiTech, up 24% from the corresponding quarter of 2024.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018