Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Bulletin Board: FRUTF), managed by CEO Ori Yehudai, is still delivering the goods to its shareholders. The company today reported a $36.6 million net profit in the second quarter, 23.6% more than in the second quarter of 2016.
Frutarom deals in ingredients and flavors for the global food and beverages industry. The company's sales grew 14.4% to a record $343.6 million, gross profit was up 16% to $132 million, and operating profit jumped 34% to $55 million. Frutarom's share price responded to the report by rising 2%, bringing its gain this year to over 30%. The company's market cap is nearing NIS 16 billion.
Frutarom is continuing its rapid pace in acquisitions, with eight acquisitions last year and five more so far this year. These acquisitions contributed to the company's ongoing growth in revenue and profits.
Frutarom's revenue in the first half of 2017 was up 16% to $646 million. Its operating profit in this period grew 39% to $100 million, and its net profit soared 37% to $70 million. Net cash flow from current activity totaled $75 million, 37% more than in the corresponding period last year.
In announcing his company's results, Yehudai said, "The results reflect the successful implementation of our rapid and profitable growth strategy combining profitable internal growth at higher growth rates than those of the markets in which we operate, together with the successful merger of our strategic acquisitions that contribute to the continuing and consistent improvement in our results…We are continuing to capitalize on the integration and maximum streamlining, achieving the significant savings made possible from the acquisitions we make. The merger and streamlining processes are already contributing and will continue to contribute in the coming years towards strengthening our competitiveness and to improving profits and margins with the achieving of operational savings of an annual scope of $20-22 million (as compared with Frutarom’s cost structure in the second quarter of 2016)."
Yehudai reiterated the goal he set for the company last year, referring to "at least $2 billion in sales with an EBITDA of over 22% in our core activities by 2020.”
Published by Globes [online], Israel Business News - www.globes-online.com - on August 17, 2017
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