Low-tech firms' profits rise despite recession

BDO Ziv Haft surveyed 170 large and mid-sized firms.

Although many Israeli manufacturers have been hurt badly by the economic crisis, some low technology companies boosted their profits for the first quarter of 2009, even while revenue slumped, according to a survey by accounting firm BDO Ziv Haft.

BDO Ziv Haft surveyed 170 mid-sized and large plastics, construction, food, and chemicals companies. 80 plastics companies achieved 30% growth in net profit, 20 food and chemicals companies achieved 20-25% growth in net profit, and 30 construction and infrastructures companies achieved 30% growth in net profit

BDO Ziv Haft attributes this growth to the fact that some companies bought raw materials inventory at the right moment in late 2008, with prices down 40-50%, especially for plastics and metals companies. At the same time, prices for finished products remained stable. The fall in raw materials prices in many cases compensated for the fall in profits caused by the fall in demand for finished products as a result of the economic crisis.

BDO Ziv Haft partner Ofer Lotker, CPA, said that the rise in profits was mainly found among low technology companies and manufacturers of basic consumer goods.

Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2009

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

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