Makhteshim sales steady

CFO Ran Maidan: Price and volume increases offset the negative currency effect.

Higher sales in Europe and North America offset drops elsewhere to lead Makhteshim Agan Industries Ltd. (TASE: MAIN) to nearly unchanged sales figures for the first quarter of 2009.

Sales totaled $722.3 million, compared with $722.2 million in the corresponding quarter of 2008. Sales in Europe were $367.6, 8.1% higher than the $340 million recorded in the first quarter of 2008. North America sales were $124.4 million, 12.3% higher than the corresponding quarter. Sales in South America decreased 2.4% to $143.8 million, and sales in the rest of the world fell 33.5% to $65.6 million.

CFO Ran Maidan explained that "the company reported steady sales in the first quarter mainly due to price and volume increases, which offset the negative currency effect."

Net profit in the first quarter of 2009 was $78.2 million, or 10.8% of sales, a fall of $12.7 million compared with net profit of $90.9 million, or 10.8% of sales, in the corresponding quarter of 2008.

Gross profit in the first quarter was $217.4 million, or 30.1% of sales, compared with $260.2 million, or 36% of sales, in the corresponding quarter last year, a decrease of $42.8 million. Maidan attributed the lower profit to "the strengthening of the dollar against other currencies in which the company operates, and realization of inventory which was purchased at higher costs and currencies in 2008."

Makhteshim chairman and CEO Avraham Bigger said, “Positive sector fundamentals have not changed, although due to the global economic conditions, industry-wide growth has slowed in recent months and is expected to remain so in the short term. Planted areas are steady in most regions, and soft commodity prices are trending up and mark relative high levels compared with previous years. Surplus supply of raw materials and a drop in oil and energy prices led to a decline in the prices of raw materials, which is expected to enable us to reduce our purchasing costs as we replenish our inventory in the second half of the year."

Published by Globes [online], Israel business news - www.globes-online.com - on May 13, 2009

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

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