Strong times for Frutarom
Frutarom, announcing a rise for both sales and profits and
completion of its acquisition of the Swiss natural extracts company
Emil Flachsmann.
A robust second quarter for Israel-based flavour and fragrances multinational Frutarom, announcing a rise for both sales and profits and completion of its acquisition of the Swiss natural extracts company Emil Flachsmann.
Frutarom's second quarter 2003 sales totalled NIS 139.2 million (€27.8m), up 9.8 per cent compared with NIS 126.7 million in the parallel quarter in 2002. The company's sales during the first half of 2003 amounted to NIS 260.7 million compared with sales of NIS 243.4 million during the parallel period.
Meanwhile gross profit rose 14.9 per cent during the second quarter of 2003 to NIS 46.7 million compared with NIS 40.6 million during the second quarter of 2002. Profitability rose from 32.1 per cent to 33.6 per cent. During the first half of the year gross profit stood at NIS 85.3 million compared with NIS 77.7 million during the parallel period last year.
However, selling, administration and general expenses rose for the second quarter and first half of 2003, which Frutarom said were mainly mainly derived from the growth in activity and continued consolidation of its global network, including the integration of Flachsmann.
Ori Yehudai, the Frutarom Group's president and CEO, said he expects this integration to yield a variety of advantages including considerable cost savings due to co-operation between the R&D departments and the building up of a joint purchasing network to bring in savings on raw materials. The company also plans to merge the marketing, sales and customer service systems.
Consolidation of Flachsmann's activity results will be done as of the third quarter of the year.
Net profit for the second quarter grew 28.6 per cent compared with the same quarter in 2002 and 84 per cent compared with the second quarter of 2001, reaching NIS 12.5 million (NIS 9.8m during the second quarter of 2002). Net profit for the first half of the year totalled NIS 21 million compared with NIS 17.3 million during the first half of 2002.
Commenting on this year's second quarter results Yehudai said: "The continued growth in profit and profitability is mainly due to the growth in sales, the ongoing improvement in the company's product mix and the continued, accelerated growth trend in recent years in sales of the Flavors Compounds Division, the more profitable of Frutarom's varied activities. Frutarom will continue to invest in this division and strengthen all of its sites, and regards the division as a central element in its development strategy for the future."
Yehudai expected that the division's share in the company's activity will continue to grow to 50 to 60 per cent during the next two years.
The business development of the subsidiaries established in the past few years in Russia, Ukraine, Kazakhstan and Turkey also contributed to Frutarom's improving results, according to a company statement, while substantial growth in flavours activity in the UK reportedly contributed to the growth in sales.
Aiming to become one of the world's top ten flavour and fragrance companies, Frutarom is a multinational company with significant production and development centres on three continents, which markets its product in 85 countries worldwide. Frutarom's products are intended for the food, beverage, flavour, fragrance, nutraceutical, functional food, food additive, pharmaceutical, cosmetic and detergent industries.
