HAIFA, Israel—Frutarom (LSE: FRUTq, OTC: FRUTF) released the results of its second quarter of 2010 (2Q10) and first half of the year. The company saw a 10 percent increase in revenues in 2Q10 in local currency terms to US$114.3 million; sales were also up 7.1 percent for 2Q10 compared to the comparable 2009 period. For the first half of the year, sales hit US$227.7 million, an increase of 10 percent compared to the first six months of 2009.
The company also saw positive growth in its gross profit, increasing 18.9 percent in 2Q10 to top US$46.9 million, compared to 2Q09’s US$39.4 million. Gross margin reached 41.0 percent compared to 37.0 percent in 2Q09. Operating profit and operating margin were similarly positive, rising 52.1 percent and hitting 17 percent, respectively, in the second quarter. The positive quarterly results yielded net profit of US$13.0 million, an increase of 29.1 percent from US$10.1 million reported in the second quarter of 2009. Even more significantly, net profit for the first half of 2010 increased by 53.8 percent over the comparable 2009 period, totaling US$24.1 million; net margin reached 10.6 percent for the first six months of 2010.
According to the company, the positive results in the second quarter were primarily due to organic growth in its Flavor Segment and accelerated activity in the Specialty Fine Ingredients Segment, driven by the release of several natural new products with higher than average margin rates. In addition, completing the integration of the CH Savory business, acquired by Frutarom in 2Q09, contributed to the growth in sales.
“We are satisfied by the continued positive trends expressed in the further achievement of organic growth while materially improving profit and margin which hit this quarter record levels," said Ori Yehudai, Frutarom’s president and CEO. “The company’s strong capital, its low debt level and the positive cash flow it generates, will enable us, combined with support from leading banks, to continue and implement acquisitions. We will decisively continue to act to implement our rapid growth strategy which combines organic growth and strategic acquisitions and the two together will allow us to again double our sales turnover in the next four years, to approximately US$1 billion."
Frutarom currently markets its products to more than 10,000 customers in over 120 countries. It services the food, beverage, flavor, fragrance, pharmaceutical, nutraceutical, functional food and cosmetic industries. Frutarom has two main business segments: the Flavors Segment, focusing on flavor compounds and food systems; and the Fine Ingredients Segment, which produces and markets natural flavor extracts, natural functional food ingredients, nutraceutical extracts, citrus products and aroma chemicals.
