The revenues of Electra Consumer Products
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In the fourth quarter of 2022, they increased by about 5.8% to about NIS 1.58 billion (compared to a total of about NIS 1.5 billion in the corresponding quarter). The main reason is an increase in sales of heating systems for export. In the entire year, they increased by 34.3% and stand at NIS 6.24 billion. The main increase was due to the consolidation of the results of the companies acquired during the year 2021 which were not fully included in the corresponding period last year, mainly Beitan wines.
The net profit for the shareholders in the fourth quarter, excluding the food activity, increased by 18.9% to approximately NIS 29.4 million. Without neutralizing the food activity, the company recorded a net profit for the majority shareholders of approximately NIS 103 million during the period. The food sector underwent a massive process of renovations and acceleration of converting branches to the Carrefour brand. The profit without neutralizing this sector was NIS 155 million last year.
Operating profit before other income increased in the fourth quarter of 2022 by approximately 7.1% to approximately NIS 61.4 million, compared to approximately NIS 57.3 million in the corresponding quarter last year. The change was mainly due to a decrease in the electricity retail sector, which was partly offset by an increase in the other sectors.
The net profit in the fourth quarter amounted to approximately NIS 10.8 million compared to NIS 13.1 million in the corresponding quarter in 2021. Excluding the food sector, the net profit increased by about 10.5% to about NIS 36.1 million, compared to about NIS 32.7 million in the corresponding quarter last year. why is it happening? that Electra is preparing for the launch of approximately 50 Carrefour branches nationwide during the first half of 2023 and expects that in 2024 this activity will reach revenues of approximately NIS 3.9 billion and EBITDA of approximately NIS 175 million. That is, it explains the decrease in the net profit in the investment in the food sector, but expects growth next year.
The net profit attributable to the shareholders amounted in the fourth quarter to approximately NIS 15.8 million compared to approximately NIS 15.1 million in the corresponding quarter last year. The company’s EBITDA in the fourth quarter of 2022 increased by approximately 15.5% to approximately NIS 147.9 million, compared to approximately NIS 128 million in the corresponding quarter last year.
Gross profit in the fourth quarter of 2022 increased by approximately 14.4% to approximately NIS 494 million (approximately 31.2% of revenues), compared to approximately NIS 432 million (approximately 28.9% of revenues) in the corresponding quarter last year.
The increase in the sales cycle of the fourth quarter was mainly due to an increase in sales in the electrical consumer goods sector, an increase in the electrical retail sector due to an increase in duty free store sales, and an increase in the sports and leisure sector mainly due to the consolidation of Adidas for the first time in the quarter and the opening of new branches.
The cash flow resulting from current activity increased in the fourth quarter of 2022 to approximately NIS 157 million, compared to net cash used for current activity in the amount of approximately NIS 12.6 million.
The company’s equity is NIS 1.22 billion.
Gross profit in 2022 increased by approximately 42% to approximately NIS 1.85 billion (approximately 29.6% of revenues), compared to approximately NIS 1.3 billion in 2021 (approximately 28% of revenues) in 2021. The increase in the gross profit and its rate was mainly due to the improvement in the gross profit in the electrical consumer goods sector, despite the erosion of the euro exchange rate and its negative effect on export prices, as well as an improvement in the electrical retail sector and the consolidation of the results of the acquired companies.
The operating profit before other income, net which resulted mainly from the revaluation of investment real estate, and before reorganization expenses, increased in 2022 by approximately 4.7% to approximately NIS 234.5 million, compared to approximately NIS 224 million in 2021.
The accounting operating profit amounted to approximately NIS 198.3 million, compared to a total of approximately NIS 265.6 million in 2021.
The company’s net profit, excluding the food sector, amounted to approximately NIS 170 million in 2022, compared to approximately NIS 180 million in 2021, when the decrease in profit was mainly due to an increase in financing expenses due to exchange rate differences. The net profit, without the aforementioned neutralization, amounted in 2022 to approximately NIS 43.6 million compared to approximately NIS 171.9 million last year.
The net profit attributed to the shareholders amounted in 2022 to approximately NIS 102.9 million, compared to NIS 164.1 million in 2021. The change in the company’s net profit and the net profit attributable to the shareholders in 2022 is mainly due to the provision for the reorganization plan, which reduced the results of the food retail sector by an amount of approximately NIS 52 million in 2022.
The EBITDA in 2022 increased by about 26.8% to a total of about NIS 530.2 million, compared to a total of about NIS 418.1 million in 2021. The main increase in the company’s EBITDA during the reporting period was due to an improvement in the results of the electrical consumer goods sector and a full consolidation of the food sector and the sports and leisure sector.
The cash flow from current operations in 2022 increased sharply and amounted to approximately NIS 329 million, compared to a negative cash flow of approximately NIS 11.7 million in 2021.
The company stated that Beitan Wines already started in the second quarter of 2022 renovating branches and preparing them for the launch of Carrefour under a temporary brand (“SUPER”), where by the end of 2022 it had renovated and converted about 15 branches and by the time of publishing the report it had renovated and converted about 20 branches. The renovations and conversions carried out so far, as mentioned, contributed to a significant improvement in the results of the aforementioned branches, and this was before their launch as Carrefour branches. The results of the conversion of the branches support Beitan Wines’ plans to speed up the process of launching the Carrefour chain as early as 2023.
The company anticipates that the implementation of the efficiency and reorganization plan, which includes the acceleration of the conversion of the chain’s branches to Carrefour, will improve the company’s ability to act to achieve its goals and business strategy in the food sector.
In addition, the company announced a dividend distribution of NIS 35 million, which reflects NIS 1.62 per share. The dividend will be paid on April 16.
Also, this month an agreement was signed between Electra Solar (which is indirectly held by the company), and Barih Golan, which is indirectly held by Rav Barih, an agreement for commercial cooperation and merger of activities and a founders agreement to establish a joint company which will be held by Barih Golan (75%) and by Electra Solar (25%) and which will operate in the field of distribution and/or marketing and/or sale of solar system components (PV) to companies and/or individuals dealing in the field of renewable energy. At the same time, a wholly owned subsidiary of the company signed an agreement conditional on the completion of the merger with Barih Golan, with the current partner in Electra Solar to purchase his holding (about 49.9%) in exchange for a total of about NIS 2 million in a way that will transfer the full holdings in Electra Solar to the company’s subsidiary .
Electra Consumer Products currently operates in 5 areas: import, export, production, marketing, sale and distribution of electrical consumer products and providing service for the products; Operation of retail marketing chains for the sale of electrical consumer products; the activities of the Beitan Wines retail group and the 7-Eleven and Carrefour chains under construction; Operation of marketing chains, importation, production, marketing and distribution of clothing and footwear equipment and products for travelers, camping, skiing and snowboarding, outdoor sports and leisure, as well as operation of a chain of Adidas franchise stores; The fifth – development and construction of real estate for investment.
Zvika Schwimmer, CEO of Electra Consumer Products: “Today we are summarizing the results of 2022, and presenting increases in the field of air conditioning in the local market and we have created a significant breakthrough with orders of over one and a half billion shekels in the field of heating systems for Europe. In the areas of electrical retail and sports and leisure, we continued to show growth in our sales and market shares. During the year, we began to carry out actions to introduce two super brands in the food sector – Carrefour and 7Eleven, when we will see the fruits of the investment in 2023. At the same time, we are working to create synergy and increase customer loyalty through a credit card club in cooperation with Al Cal and Bank Hapoalim (Bit) which will be launched in conjunction with the launch Carrefour chain. Responsible management of the working capital of the various activities, including a significant reduction of inventory balances, mainly in the electrical consumer products sector, helped us present a record result of cash flow from current operations of approximately NIS 329 million, which further strengthens the company’s financial strength.”