The Strauss company, which this week joined the companies raising prices, announced the suspension of dividends for the year 2022, and that it is considering raising debt of 400 million shekels, most of which will be used to repay credit from banks and others, and to finance current operations.
This week, Strauss announced a 9% price increase, following the profit warning it issued earlier for this year’s results, against the background of the recall of Strauss candy factory products in Nof HaGalil, which led to the factory’s closure, and is expected to detract up to NIS 310 million from net profit in 2022.
The recall resulted in a NIS 345 million hit to sales in the first nine months of the year, and a NIS 134 million hit to sales in the third quarter. The damage to the operating profit is NIS 341 million and NIS 92 million respectively, and the net profit was cut by NIS 263 million and NIS 71 million respectively.
The increase in coffee prices saved sales in the quarter, and they rose to NIS 2.49 billion, compared to sales of NIS 2.29 billion in the corresponding quarter last year. Neutralizing the effect of foreign exchange, an organic growth of 7% was recorded compared to 6.9% in the corresponding quarter last year.
On the other hand, the gross profit fell by about 10% in the shadow of the recall and amounted in the third quarter of the year to NIS 746 million. The rate of gross profit from sales decreased to 29.9% compared to 36% in the corresponding quarter last year. The operating profit was cut by 50% compared to the corresponding quarter last year and amounted to NIS 124 million. And the bottom line, the net profit plunged by 80% to only NIS 46 million.
The company recently appointed Shai Babad, who was the former CEO of Finance, to the position of CEO of the group, with a turnover of NIS 6.8 million per year. Babad is already taking steps to sweeten the difficult year.