Two events involving Strauss Group Ltd. (TASE:STRS) took place today: the publication of its third quarter financial statements and the company's announcement that it is recalling Sabra hummus in the US because of concern about listeria bacteria.
Strauss notified the TASE that Sabra Dipping Company, which Strauss owns together with Pepsico (50% each), will collect a number of hummus products manufactured and marketed in the US and Canada due to concern about listeria bacteria found in the company production facility in Virginia, although not in its final products. "The company has taken a number of steps at the plant to deal with the event, and is acting in cooperation with the appropriate authorities in the US," Strauss stated.
Strauss added in its report that there was no connection between the Sabra products manufactured in the US and marketed there and in Canada and the products that Strauss manufactures and markets in Israel.
Strauss notified the TASE today that the recall would reduce its operating profit by $5 million, taking into account its insurance coverage.
Rise in revenue, net profit
Strauss, managed by CEO Gadi Lesin, today reported a 6% rise to NIS 6 billion in revenue in the third quarter, including 5.8% organic growth, excluding exchange rate fluctuations.
The company's gross profit was up 13% to NIS 804 million, with a 38.3% gross profit ratio. Operating profit rose 11.2% to NIS 123 million, amounting to 10.2% of sales.
Strauss posted a NIS 92 million net profit in the third quarter, up 7%, compared with an NIS 86 million net profit in the third quarter of 2015. Cash flow in the quarter more than doubled from NIS 60 million in the third quarter last year to NIS 132 million in the third quarter of this year.
Lesin said, "In Israel, our home base, the company is continuing its high growth rate against the market trend, despite lower prices for core products and better employment terms for its workers. Innovation, lower operating costs, and a better competitive position in our core countries will continue in the coming quarters, as we cope with the difficulties and challenges that a diverse group like ours will certainly face."
Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2016
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