ISRAEL: Blue Square revenues up - but costs rise too

By just-food.com | 21 November 2007

Added selling space has helped Blue Square-Israel to increase its third-quarter revenues by 6.6%, the company said today (21 November).

Revenues reached NIS1.8bn (US$454.4m) compared with NIS1.7bn in the third quarter of 2006.

"The increase reflects additional selling space resulting from the opening of eight new stores during the previous year, and the ongoing expansion of operations of Bee Group Retail, including the consolidation of initial revenues of Vardinon Textile, 85.8% of which the company acquired in the second quarter," Blue Square said.

Gross profit for the third quarter increased by 7.5% to NIS480.2m.

"This reflects improved agreements with suppliers and higher profitability onsales generated by the company's subsidiary Bee Group Retail, moderated by a strongly competitive environment and the impact from the launch of the Mega In Town chain which increased the proportion of discount sales in the revenue mix," Blue Square said.

Earnings before interest, taxes, depreciation, and amortization was NIS101m, a decrease of 12.8%, however as costs rose.

The company said its selling, general, and administrative expenses for the period increased by 13.3%.

"The increase reflects activities associated with the successful launch of the Mega In Town chain, including renovations, advertising, marketing and other expenses, as well as the opening of eight new stores in the prior year," Blue Square said.

Net income also fell from NIS 89.1m in the third quarter 2006, to NIS28.6m. The net income for the third quarter of 2006 included a capital gains associated with the company's subsidiary, BSRE. Net income for the third quarter of 2006, excluding capital gains, was NIS40.5m.

Sectors: Retail