A decline in sales has hit full-year profits at Israeli ingredients group Frutatom.
The company said sales, which dropped 7.5% during 2009, were hit by currency exchange and the “ongoing effects” of the economic crisis as customers moved to reduce inventory levels.
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Lower sales resulted in a drop in gross profits, which fell to US$155.5m from the $176.3m reported for fiscal 2008. Operating profit fell to $48.7m, compared to $56.6m in 2008 and EBITDA slid to $67.6m, down from $76.3m.
During 2009, Frutarom looked to reduce expenses and improve competitiveness in order to mitigate the impact on falling sales on profitability.
These efforts enabled the company to maintain the gross margin level 36.6% compared to 37.2% while operating margin stood at 11.4% compared to 12% in the previous year, Frutarom said.
“During the year, we acted to strengthen our competitiveness and improve our operational efficiency while tightly reducing and controlling our expense level and while continuing to strengthen our R&D and sales infrastructures to ensure the continuation of our rapid profitable growth,” president and CEO Ori Yehudai said.
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By GlobalDataLooking to the coming year, Yehudai said that improved economic conditions would enable Frutarom to return to growth.
“We estimate that the stabilisation of the global economy in recent months, the moderation in currencies fluctuations, the halt of the destocking trend and the signs of gradual improvement in consumption, including in countries significantly affected by the devaluation in their currency rate, will contribute to an improvement in our sales level and to future return to a growth trend at rates similar to those characterizing our activities in the past,” he said.
