Kosher food specialist G.Willi Food has said it will pursue acquisitions after seeing profits plunge in the first half of its fiscal year.
Israel-based G.Willi’s chairman, Zwi Williger, said on Wednesday (15 August) that the firm sees an opportunity to use spare cash for “synergetic acquisitions”. He said economic uncertainty means the price of deals is likely to fall.
G.Willi is keen to show it can improve shareholder returns after seeing net profit for the six months to the end of June drop by a third on the same period of last year, to NIS8.9m (US$2.2m). Operating profit slid by almost 40%, to NIS10.3m, said the group, which is one of Israel’s largest food importers.
The firm only booked a 0.4% dip in net sales, to NIS140m, but margins were damaged as hard-hit consumers traded down to cheaper foods and global food commodity costs continued to rise.
Williger said: “As with the second half of 2011 and the first quarter of 2012, second quarter 2012 results were affected by continued consumer pressure to reduce prices.”
The company, he said, is focused on containing costs. “Going forward, we anticipate a significant increase in the level of uncertainty in the global economy and in particular – challenges pertaining to food commodities that exceeded global inflation rates. In Israel, economic uncertainty coupled with ongoing consumer demand for price reductions will not enable us to increase prices.”
In the second quarter, net sales dropped by 5.4% to NIS66.3m. Operating profit fell by 48% to NIS5.55m and net profit slid by 44% to NIS4.1m.