HAIFA, Israel— Frutarom released its financial results for the first half of 2009, with sales down around 5.5 percent compared to the first half of 2008, primarily affected by a revaluation in the dollar rate against international currency and the ongoing economic recession. However, the company did post sales of $205.1 million for the first half of 2009, with an operating margin of 12.7 percent and net profit margin of 10 percent.
Gross profit was down for the quarter ($39.4 million) and first half ($74.7 million) of 2009 compared to 2008 ($49.7 million in 2Q08, $94.5 million first half 2008). Gross margins were similar quarter to quarter and year to year. Operating profit was also down to $13.6 million for 2Q09, compared to $17.0 million in 2Q08, although operating margins were stable, which the company attributed to taking steps to reduce expenses and contain costs. Net profit was slightly down for 2Q09 ($10.7 million) versus 2Q08 ($11.2 million); however, net margin improved to 10 percent versus 8.5 percent quarter-to-quarter. Net margin was similar year-over-year, although net profit was down to $16.5 million for the first half of 2009, compared to $21.0 million in the same period in 2008.
Even with the global crunch, Frutarom maintained its focus on strategic growth, closing three strategic acquisitions in the first half of 2009—Oxford, FSI and the Savory activities of Chr. Hansen. The acquisitions contributed approximately $9.1 million to sales in the first half of 2009. Ori Yehudai, president and CEO, Frutarom, commented: “Frutarom will continue to determinedly act for the implementation of its rapid growth strategy, which combines organic growth and strategic acquisitions. We estimate that with the stabilization of the global markets, the moderation of the fluctuations in exchange rates in the world, the discontinuation of the inventory reduction trend and the gradual improvement in consumption, mainly in countries significantly affected by the devaluation in their currency rate, the company will return to growth rates similar to those characterizing its activities in the past.”
