Food manufacturer Strauss Group Ltd. (TASE:STRS) this morning reported negative results for 2015, with profits down 21% to NIS 293 million and revenue off 6% to NIS 7.6 billion. Strauss's gross profit fell 9% to NIS 2.8 billion and its operating profit sank 12% to NIS 659 million.
Strauss's overseas activity now accounts for most of its business. The company said that differences in converting foreign currency to shekels had decreased its annual sales by NIS 635 million. Most of the damage was in Strauss's coffee business, which now constitutes half of its activity, mainly in the Brazilian market, where the weakening of the Brazilian real decreased Strauss's sales by over NIS 400 million.
Strauss also suffered from a rise in financing expenses, which were also affected by changes in exchange rates, and from higher tax expenses. The company said that excluding the effects of exchange rates and the Food Law, its growth was 2.5%.
Strauss manufactures, markets, and sells food and beverages in 20 countries around the world. It is Israel's second largest food group, with an 11% market share, and employs 14,000 workers worldwide.
Strauss president and CEO Gadi Lesin today said, "As a leading player in a number of significant international markets, we are affected for better and for worse by global macroeconomic trends. We are continuing to assess our activity from a multi-year perspective, which has generated significant value for the group for a decade. The group continues to implement its global growth strategy, while continuing its investments in innovation and streamlining throughout the value chain and in all its geographic locations."
Strauss's fourth quarter sales dipped 9% to NIS 1.9 billion and its gross profit fell by nearly 7% to NIS 700 million, but a cut in expenses helped increase its operating profit by 11% to NIS 158 million. Its fourth quarter net profit was nevertheless down 12% to NIS 74 million, following a rise in financing expenses and tax payments.
Published by Globes [online], Israel business news - www.globes-online.com - on March 21, 2016
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