Firstborns of the field , The fruit and vegetable market of the brothers Ilan and Sasson Sheva, published its results for the third quarter of the year, which show a slight increase in revenue but an erosion in profitability.
Bikurei Hasadeh has three areas of activity: purchasing, marketing, importing and distributing fresh agricultural products, retail (the company operates the supermarket chain City Market and an online trading site), and it also deals with non-bank financing, in which it provides non-bank credit mainly to its customers and subsidiaries. “Green Ark”.
The company’s revenue from sales in the quarter amounted to NIS 437 million, an increase of 7.4% compared to last year. In the first nine months of the year, sales jumped by 54% and amounted to NIS 1.2 billion, mainly due to the opening of three new branches of the city market and in light of the neutralization of the effect of the first field union in South 2020, which took place in May 2020.
The quarterly gross profit improved by 6.7% and amounted to NIS 108 million, but due to an increase in selling and marketing expenses, an increase in financing expenses and tax expenses, the company recorded a 17% decrease in net profit, which amounted to NIS 11.7 million compared to NIS 14.2 million last year. The profit from sales fell in the quarter from 3.5% to 2.7%.
In the first 9 months of the year, profit fell by about 60% as it stood at NIS 35 million compared to NIS 88 million last year. Its share of sales also dropped drastically from 11% to only 2.9%.
Decline in agricultural sales, increase in retail sector
During the third quarter, the company recorded a decrease of NIS 37 million in sales turnover in the agriculture sector (a decrease of 4.2% compared to last year), which the company attributes, among other things, to a reduction in activity with Pavilion Wines. The company noted that sales to institutional customers did not change compared to the same period last year and showed a 3.7% increase in the quarter.
In the retail sector, there was an increase in sales turnover, which amounted to NIS 10.2 million, but it was recorded mainly thanks to the opening of three new branches. Looking at sales in identical stores, there was a decrease of about 10% compared to the corresponding period. The company notes that in the third quarter of 2020 its sales turnover was abnormal following the Corona virus.
In the non-banking financing sector, the company is showing recovery after its customer portfolio lost ground as a result of the slowdown in economic activity as part of the spread of the corona. As of the date of publication of the report, the portfolio stands at NIS 170 million. At the end of the quarter (September 30), the balance of the customer portfolio was NIS 160 million, almost double the corresponding date last year, when it amounted to NIS 84 million.
Has lost 11% since its issuance
Bikuri Sadeh issued its shares on the stock exchange in February and is currently traded at a value of NIS 823 million, after losing about 11% since it was issued. The stock is trading steadily after the reports.
Last June, Bikuri HaSadeh’s City Market entered into a framework agreement with the online supermarket company Quick, under which the branches of the City Market chain will be gradually added to the operating model of Quick . As of the date of publication of the report, activity is taking place in one branch.
Last August, the court filed a motion for approval of a class action lawsuit against the city market and another food retailer, claiming that they provide customers who purchase products by weight (fruits and vegetables, nuts, cheeses and fish) on the city market website with higher weight than ordered and charge a different fee. The invitation. The amount of the lawsuit was estimated at NIS 157 million without division between the two defendant companies. The company noted that in its examination the amount of the claim is unreasonable and in any case it is clarified in the website regulations that there may be a reasonable deviation between the weight ordered and the weight actually delivered.