Israel-based food retailer Blue Square posted a dip in third-quarter earnings today (20 November) as a result of an increase in financing expenses.

For the period ended 30 September, net income dropped to ILS12m (US$3.5m) from ILS63.6m in the comparable period of 2007.

However, the company posted a 6.5% increase in operating income to ILS71.1m reflecting the period's increased revenues. This was alleviated partially by the company's activities to accelerate the expansion of Eden Teva Market and to build the Bee group's Dr Baby chain.

Revenues rose 6.2% to ILS1.9bn from ILS1.8bn in the previous year. The increase reflected the opening of 12 supermarkets during the twelve-month period, the success of the Mega In Town format, and the ongoing expansion of Bee Group Retail.

Zeev Vurembrand, Blue Square's president and CEO said: "The third quarter was a period of major strategic progress during which we brought together our multi-year strategy, securing Blue Square's early lead of the emerging organic sector, and, through the expansion of our holdings in Bee Group Retail, establishing Blue Square as one of Israel's strongest players in the non-food arena.

"Our financial results reflect the investments we have been making to actualise these plans according to an accelerated schedule."