While the long-delayed deal for the sale of a controlling interest in Israeli food company Tnuva Food Industries Ltd. to Chinese concern Bright Food is taking its course, Tnuva has reported a sharp drop in its operating profit margin in 2014. Tnuva attributed the results to "increased regulation, the introduction of price controls, the downtrend in the food market, and growing competition."
Tnuva's revenue was down 5.2% to NIS 6.8 billion in 2014, and its operating profit fell from 8.6% in 2013 to 7.7% in 2014. The company's net profit plunged 21.5% from NIS 518 million in 2013 to NIS 407 million in 2014.
Tnuva CEO Arik Shor said, "2014 was a year in which the food market shrank significantly for the first time in many years." Real estate deals and taxation issues also had a negative impact on Tnuva's results; without these factors, the decline would have been more moderate.
In May 2014, a huge deal was signed for the sale of Apax Partners' 56% stake in Tnuva to Bright Foods at a company value of NIS 8.6 billion. Not long ago, Meir Shamir, a partner with Apax in the controlling interest in Tnuva (21%) through Mivtach Shamir Holdings Ltd. (TASE:MISH), also joined this deal. The deal has not yet been completed, but it is expected to go through within a few months, following several extensions.
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2015
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