The tens of percent increase in the price of the raw material caused a loss for Sano’s paper business and led to a 76% drop for Shaniv. The reports indicate continued price increases for the consumer
Against the background of the increase in the price of the paper products of the toiletry companies in recent weeks, Sano reveals a transition to a loss in the paper products activity, and the Shaniv company shows a drop of 76% in this sector. The reason for the extreme downward swing in the financial results is the tens of percent increase in the price of cellulose, the main raw material in the industry.
According to Sano, “in the first nine months of this year, the group’s sales prices in the retail markets in Israel, which constitute the bulk of the group’s sales, were not updated in accordance with the rising prices of raw materials.” According to the forecasts of central banks in the world, inflation rates will continue to be high, and Sano states that this “is expected to lead to a further increase in commodity prices”.
Shaniv also raised prices, and this is reflected in its reports, which, unlike Sano, did not show beyond the loss. Shaniv produces toilet paper under the brands Touch and Lovely, paper towels, napkins and handkerchiefs, and defines itself as “the second largest producer of household paper in Israel, with An annual production capacity of over 30,000 tons, which is about 30% of the domestic and raw paper consumption in Israel.” The paper field makes up over half of the company’s revenue.
In the third quarter, the company increased the sector’s sales by 22% to an amount of NIS 82 million (out of general sales of NIS 180 million), but the profit in the sector fell by 76% to an amount of only NIS 5 million.
A sharper trend was observed at Sano, a manufacturer of toilet paper, Sano sushi paper towels, disposable tablecloths, hospitality napkins and disinfectant wipes. The company’s paper sector did record a 12.8% increase in revenue to the amount of NIS 87 million, but in the line of operating profit, a loss of NIS 2.2 million was recorded, after a profit of NIS 9.6 million was recorded in the corresponding quarter last year.
Sano recorded a 5% increase in the company’s revenues as a whole, to an amount of NIS 492 million, but presented a 43% drop in net profit in the third quarter to NIS 34 million. The main decrease was due to erosion in gross profitability due to the increase in the price of raw materials. The sales prices, according to Snow, did not increase at the rate at which production inputs and raw materials became more expensive.
In the third quarter, the gross profit amounted to NIS 159 million, and its share of sales was 32.3%. In the corresponding quarter last year, the gross profit was NIS 171 million, and its share of sales was 36.5%.
The company recorded an increase in the revenues of all activity sectors, with the exception of a slight decrease in the “other” sector. An increase in advertising, salary and distribution expenses increased sales and marketing expenses by 6.6% to an amount of NIS 95.3 million. The operating profit fell by 32% to an amount of NIS 45 million.
In the first nine months of the year, Sano recorded a 3.7% increase in revenues to NIS 1.4 billion.