Supersol, Israel’s largest supermarket chain, posted a NIS118m (US$24.6m) loss for the last quarter of 2002, due to heavy depreciation charges, although “apparently the capital market is more interested in profitability on operations and less in the rigid implementation of the new accounting regulation,” as noted in Haaretz.
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The chain posted operating profits of NIS45m for the quarter, 43% down compared with the same period in 2001, while its revenues for the last quarter of 2002 dropped 7.8% against the same period in 2001, to NIS1.6bn.
The company’s revenues fell 12.5% as the recession worsened and foodstuffs prices fell in real terms, as well as a result of a tougher competition in the country’s supermarket sector, the report notes.
The report adds that a drop in gross profits and a rise in operating expenses relative to sales volume “eroded operating profits to 2.8% of turnover, compared with 5.2% for the fourth quarter in 2001.”
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