Israeli food maker Strauss Group has booked a drop in full-year profits, as margins were eroded by rising commodity costs and downward pressure on prices.
Operating profit fell 10.3% in 2011 to NIS523m (US$140.6m), with margins dropping to 6.8% in 2011 from 8.5% in 2010. Net income tumbled 23.6% to NIS161m.
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Strauss president and CEO Gadi Lesin said today (27 March) that “dramatic increases” in raw materials and energy costs had dampened margins.
At the same time as the group was grappling with input cost pressure, consumer protest in Israel forced it to reduce its prices, Lesin revealed.
Despite price deflation, Strauss was still able to grow sales by 12.3% in the year to NIS7.7bn.
Looking to the coming year, Lesin insisted that the firm would remain focused on driving growth by adding value for its customers and developing its international activities.
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