Israel’s G. Willi-Food International posted a slump in first-half profits as the Kosher foods distributor cut prices amid a “massive” increase in inventories.

Net profit slid more than half to US$1.7m in the six months through June from a year earlier, resulting in earnings per share of $0.13 compared to $0.27 in the corresponding period of 2016, the Yavne, Israel-based company said in a statement today (30 August).

While G. Willi-Food eked out a 0.3% increase in sales, operating income plunged to $1.4m from $4.5m. 

For the company that markets and sells its Kosher products in the US, Canada, Europe, Australia and other countries, the balance sheet showed inventories at the Nasdaq-listed firm doubled in the half to $20.3m from $9.5m.

G. Willi-Food said in today’s statement that on 20 June the company approved the appointment of Yoseph Williger, Zwi Williger, Gil Hochboim and David Donin as directors following the termination of then-directors Gregory Gurtovoy, Ilan Admon, Ilan Cohen, and Emil Bodilovski. The same day, the board of directors approved the appointment of Victor Bar as a director. 

The statement also acknowledged that in 2016 a number of executives were investigated by the Israeli Securities Authority and Gurtovoy was detained for interrogation for three days. He was subsequently placed under house arrest for a period of two weeks, “on the suspicion of the crimes of fraudulent acquisitions under aggravating circumstances, falsifying corporate documents, fraud, breach of fiduciary duty in a corporation, money laundering, as well as misleading reporting”. 

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By GlobalData

Tim Cranko was made CEO of the company on 6 July, a matter of weeks before chief financial officer Pavel Buber was “released” from his position and president Iram Graiver departed, with Yitschak Barabi, the former controller, appointed as the interim CFO.

Commenting on the results posted today, CEO Cranko, said: “The Israeli retail market has been undergoing a period of consolidation, leading to more competitive purchasing on the part of retail chains and the resulting reduction in sales margins. Our focus is now on reverting to optimal inventory levels and mix, and at the same time integrating new senior management who are tasked with growing our sales and improving the profitability of our product mix, together with tightening control over the corporate expenses.”  

In August 2016, G. Will-Food reported a jump in half-year profits, with sales growing but its earnings boosted after the departure of two senior executives meant lower administrative costs.