Israeli supermarket operator Blue Square saw net profit for the 2009 fiscal year drop as a result of an increase in financial expenses.
For the year ended 31 December the firm earned NIS97.8m (US$25.9m) compared to net income of NIS132.4m in 2008.
Sales for the 12-month period dropped slightly to NIS7.35bn from NIS7.43bn in the prior year.
Supermarket same store sales dropped 3.9% due to the recession, the firm said, and increased competition and erosion of prices in HD chains. The decrease however, was offset by the net addition of nine new stores during the 12-month period of around 10,500 square metres and from an increase in sales from the firm’s non-food and real estate segments.
Operating profit for the 2009 fiscal year amounted to NIS241m, compared to NIS265.3m (3.6% of revenues) in 2008. The drop was affected by the decrease in sales and an increase in selling and administrative expenses, the firm said.
The company said it incurred financial expenses of NIS112.7m (NIS105.6m) for the period as a result of an increase in the financial net debt of the company, which led to an increase in financial expenses for debentures and loans to the amount of NIS12.2m and a decrease in income on deposits by NIS7.6m.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataZeev Vurembrand, Blue Square’s president and CEO, said: “In 2009, we implemented expeditiously and with precision measures that, already in the fourth quarter of the year, resulted in a material improvement of the business results including sales and operating profitability.”
He added: “In 2010, we will continue to implement the strategic measures by assimilating core systems in the trade areas, category management, supply chain and branch operation. These tools will enable, already at the end of 2010, to manage with more precision the array of products in the stores that will result in the improvement of trade terms on one hand, and the improvement of operating efficiency, on the other hand.”
For the fourth quarter, sales increased 3.5% to reach NIS1.81bn, while net profit edged up to NIS18.4m from NIS18.1m in the comparable period of 2008.
