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Publishes its results for the fourth quarter of 2021, and shows improvement in both the top and bottom line. The company’s revenues grew by 110%, along with a 23.5% increase in net profit, which stood at NIS 13.1 million. Meanwhile, the company is updating its memorandum of understanding with the food retail chain, Carrefour, in preparation for concluding a franchise agreement, to operate pavilion wine chain stores.
The company’s revenues in the fourth quarter amounted to NIS 1.5 billion, a growth of 110% compared to NIS 711 million in the corresponding quarter last year. The increase in revenues is attributed to the consolidation of the results of Bitan Wines, Office Duty and Saar Entrepreneurship, in the amount of approximately NIS 809 million. This is in contrast to a decrease in sales in the electrical consumer goods segment, as a result of the sale of a granddaughter company in France, and a decrease in sales turnover in the electrical retail segment.
Bottom line, the company reports a net profit of NIS 13.1 million, an increase of 23.5% compared to a net profit of NIS 10.6 million in the corresponding quarter last year.
The company’s EBITDA reached NIS 147 million, a jump of 209% compared to NIS 41 million in the corresponding quarter last year.
Memorandum of Understanding for the granting of franchises for the operation of Pavilion Wines branches
Upon publication of the reports, the company reports that it has signed a memorandum of understanding with retail giant Carrefour to open a chain of supermarket stores in Israel, as part of a 20-year franchise agreement. As part of this, Bitan Wines will work to rebrand the Bitan, Mega, and Mehadrin market chains, and to adapt them to Carrefour brands. It was further agreed that the parties will contract with extension options for additional periods of 20 years. The first Karpur branches will open by the end of the year and within 3 years more than 150 Pavilion and Mega Karpur wine branches will be converted.
According to the company’s announcement, the Carrefour Group is the world’s leading food retail company, owning about 13,900 stores, spread across more than 40 countries, with over 2 billion deals a year. The annual sales turnover of the company brand is estimated at about 81.2 billion euros. The company’s shares are listed on the VN Euronext exchange and its market value is about 14 billion euros.
Improvement in gross and operating profitability
The company’s gross profit increased during the quarter by approximately 161% and amounted to approximately NIS 431.6 million (approximately 28.8% of revenues), compared with approximately NIS 165.2 million (approximately 23.2% of revenues) in the corresponding quarter in 2020. The consolidation of the results of the acquired companies contributed approximately NIS 270 million to the gross profit. The increase in the gross profit margin was due to the gross profitability of the new activities first consolidated during the reporting period.
The company’s operating profit increased during the quarter by approximately 170.7% and stood at approximately NIS 56.6 million (3.8% of revenues), compared with approximately NIS 20.9 million (2.9% of revenues) in the corresponding quarter in 2020. The consolidation of the results of the acquired companies contributed approximately NIS 27 million to the operating profit for the quarter. The increase in operating profit was mainly due to the increase in gross profit.
Results by sector
In the sector Electric consumer products, Sales in the quarter amounted to NIS 280 million, a growth of 8.9%, compared with NIS 257 million in the corresponding quarter last year. The increase in revenues was due to an increase in the field of air conditioners in Israel as well as an increase in brand trade, which was partially offset by a decrease in the field of air conditioners abroad as a result of the sale of the granddaughter in France in the corresponding quarter. 6.5% of sales in the segment), compared with NIS 7 million (2.7% of the segment’s revenue) in the corresponding quarter last year.
In the sector Electricity retail (Electricity Warehouses and Shekem Electric), sales increased by 5% in the quarter and stood at NIS 490 million, compared with NIS 486 million in the corresponding quarter last year. The increase was due to the opening of new branches and the company’s entry into a duty-free store in the second quarter of 2021. Segment profit in the fourth quarter amounted to NIS 26 million (5.3% of sales in the segment), compared with NIS 27 million (5.5% of sales in the segment ).
In the sector Food retail (Pavilion Wines), sales amounted to NIS 702 million and segment profit was NIS 8 million.
Zvika Schwimmer, CEO of Electra Consumer: “We conclude an excellent year, in which we carried out many improvement activities in all areas of the group’s operations, as well as extensive business development as part of strengthening and expanding Electra Consumer Products’ position as a leading consumer products company in Israel. Memorandum of Understanding with the giant food retail chain Carrefour In preparation for a franchise agreement under which Pavilion wine chain stores will be operated under Carrefour brands. In Israel, the Shankim chain in Israel will offer first-class shopping experiences and will form a significant part of our food retail sector, which we mark as one of the group’s important growth engines in the coming years.
Meanwhile, in the field of electricity retail we are constantly working to improve and expand our activity, when in 2021 we opened 13 new branches of ‘Electricity Warehouses’, and also entered into duty-free operations at Ben Gurion Airport. “The Electra Consumer Products Group currently has very high operational and financial capabilities and continues to establish its position in its areas of activity in the Israeli market.”