Bottled water company Neviot - Nature of Galilee Ltd. (TASE: NVIO) today published a profit warning. The notice to the Tel Aviv Stock Exchange (TASE), which details the effect on business resulting from a halt in production, was in response to a request for clarification by the Israel Securities Authority to yesterday's notice about that halt in production due to excessive turbidity of the water in the spring that is the source of the company's bottled water.
Neviot stated, "The company's sole business and only source of revenue is the production of mineral water and beverages based on mineral water, and the spring at Ein Zahav is the sole source of water used by the company for mineral water used to make its products. The plant in Kiryat Shmona is the company's only plant. The company currently has no alternative solutions to the ongoing damage to the water quality at the spring."
Neviot reiterated its warning that the resumption of production depended on the results of quality tests according to the accepted standard. The company cannot assess at this time when the test results will again be in compliance, and it therefore cannot assess the effect of the suspension of pumping and production on its activity."
Neviot added that it keeps 72 hours of available inventory of bottled water ready for marketing and distribution, and that it delivers bottled water to customers within 48 hours of production on the basis of its time to market policy. The company therefore has no large inventory of finished products in its warehouse.
In a subsequent clarification today, Neviot noted that it posted NIS 306.9 million revenue in January-September 2008, down from NIS 363.3 million in the corresponding period of 2007.
Neviot's share fell 4.8% today to NIS 12.40.
Published by Globes [online], Israel business news - www.globes-online.com - on February 17, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009