The food giant Strauss This morning reported a 58% drop in net profit in the second quarter of this year, to a level of NIS 55 million compared to NIS 130 million in the corresponding quarter last year. This is against the background of the huge recall and the stoppage of activity at the company’s chocolate factory in the north of Israel in April of this year.
The top row presented Strauss A 2.5% decrease in quarterly revenues, to a level of approximately NIS 1.42 billion. Strauss’ operating profit shrank by 65% and stood at NIS 73 million.
The company ended the first half of the year with a 1.2% decrease in sales compared to the corresponding period in 2021, to the level of NIS 2.93 billion, and a 79% drop in net profit, which reached approximately NIS 69 million.
Last week, Strauss reported to the stock exchange that CEO Giora Bar Dea announced his resignation from the company. Bar Dea has served as the group’s CEO since 2018, and in total worked for the group for 26 years. Bar Dea will end his position “at a date to be agreed upon with the company, after the process of locating and appointing a new CEO is completed,” according to the report.
At the end of April this year, Strauss announced a call to return chocolate products produced in the company’s factory since February 20 of this year. The event became the largest recall case in the history of the economy, with extensive financial consequences for the company. Strauss has since stopped the operation of the plant, which has not yet returned to operation. About 3 weeks ago, the company announced another limited recall, after a small number of cookies that were included in the original recall arrived, as a result of human error, at individual points of sale.
Bestraus notes that “the company has carried out cleanings and investments in infrastructure, in order to ensure an improvement in the quality standard and food safety. The company is currently preparing for a gradual return to production under strict control and will announce this upon receiving approval from the Ministry of Health.”
Bar Dea said today that “the first half of 2022 reflects the strength of the group, being global and diverse, which sustains and guarantees its ability to successfully deal with a challenging macroeconomic environment alongside the internal challenges. In recent months, we are dealing with two complex events: a recall in the candy division in Israel and the adjustments At the plant in Sabra in the USA – these events negatively affect the group’s results in this half.”
“Besides these, the coffee company and the water company both report excellent results, impressive growth in sales and an increase in profit. We conclude a quarter with high growth in revenue but a decrease in the profit line mainly due to the effect of the increase in the prices of raw materials and energy and the events in the sweets division and in Sobra. I know intimately the strength and power of Strauss its employees and managers and I’m sure we’re on the right track,” he added.