Strauss Group, the Israel-based food maker has seen its second-quarter net profit fall as a result of rising commodity costs and fluctuations in exchange rates - despite rising sales. 

Net profit was down 26% for the period ended 30 June 2008 to ILS55.9m (US$15.6m) from ILS75.6m for the same period last year.

First half net profit also dipped slightly to ILS139.9m from ILS 143.1m, as did operating profit with a 0.2% drop to ILS255.5m from ILS255m in the previous year.

Operating profit was also slightly down on last year's figures to ILS131m from ILS131.5, a drop of 0.4%.

Net financing expenses were affected by accelerated inflation in the quarter and totalled ILS29.3m compared to ILS12.8m last year.

The fresh food and snack maker saw a jump of 7.8% in quarterly sales to ILS1.53bn from ILS1.42bn in the previous year.

"We are handling well the challenges facing us with the competitive global environment in the food industry this year," said Erez Vigodman, president and CEO. "We continue to grow and expand our international activity, while improving the operating results of the group and conducting important structural changes that will facilitate further accelerated and profitable growth in the coming years."