Super-Sol's operating profit for the second quarter of 2001 increased 16.5% compared to the second quarter last year to a record NIS 78 million

Super-Sol Ltd. (NYSE symbol: SAE), Israel's leading supermarket chain Friday (3 August) released financial statements for the second quarter ended June 30, 2001.

The Company's revenues in the second quarter of 2001 reached a record NIS 1.61 billion, compared to NIS 1.50 billion in the second quarter last year - an increase of 7.4%. The increase in revenues resulted mainly from the contribution of new stores. Same store sales decreased by 5.4% during the quarter, compared to the same period last year, mainly as a result of the opening of new stores by the Company and by its competitors, and the continued slowdown of the Israeli economy. Furthermore, the Company's sales were adversely affected by the timing of the Passover holiday. In 2001, Passover began on April 7, whereas in 2000 it began on April 19. As a result, part of the Passover sales for 2001 were included in the first quarter's results and part were included in the results for the second quarter, while in 2000 most of the Company's Passover sales were included in the second quarter results.

Gross margin was 26.8% for the quarter, compared to 25.8% for the same period last year. The improvement in the gross margin was mainly the result of the increase in the percentage of products distributed by the Company, sales of private label products, and improved category and inventory management.

Operating profit for the second quarter reached a record NIS 78 million, an increase of 16.5% compared to NIS 67 million in the same period last year. The operating margin increased to 4.9% compared to 4.5% last year.

EBITDA in the second quarter of 2001 reached a record NIS 124 million, an increase of 18.2% compared to NIS 105 million in the second quarter last year.

Financing income, net during the second quarter of 2001 was NIS 2 million, compared to financing income, net of NIS 4 million during the same period last year. The Company's financing income, net during the second quarter this year and in the prior year was mainly due to the increase in the Consumer Price Index during these two quarters which resulted in financing income from the erosion of the excess of unlinked monetary liabilities over unlinked monetary assets, net.

The Company's net profit for the second quarter reached a record NIS 50 million, an increase of 14.4% compared to NIS 43 million during the same quarter last year.

The Company's fully-diluted earnings per share for the second quarter reached a record NIS 0.25 per share (or NIS 1.25 per ADR), an increase of 17.5% compared to NIS 0.21 per share (or NIS 1.06 per ADR) during the same period last year.

Commenting on the results, Super-Sol's CEO, Mr. Amiaz Sagis said: "Super-Sol has continued its trend of improved financial results this quarter, as a result of our aggressive marketing program and improved efficiency in all our activities. This trend reinforces Super-Sol's leadership position in the Israeli food retail sector."

"During the second quarter of 2001, as part of the Company's growth policy, the Company opened two new stores, bringing the total number of stores to 156. The two new stores are both in the Birkat Rachel format geared toward the ultra-orthodox sector: a 2,400 square meter store in Jerusalem and a 1,300 square meter store in El-Ad. The Company has thereby increased the number of stores dedicated to the ultra-orthodox sector from six at the beginning of the year to nine, a fact that demonstrates the Company's strategy of increasing its market share in this important sector.

In addition to the investment in new stores, the Company is continuing with its accelerated store remodeling program and remodeled four stores during the first quarter, bringing the total number of stores remodeled this year to nine."

Mr. Sagis also said: "I am pleased to report further advances in self-distribution and sales of our private label branded products, "Superclass", during the second quarter. Self-distribution through the Company's logistics center increased to 54% at the end of the second quarter, compared to 44% at the end of the second quarter last year. Sales of private label branded products rose to 6.3% of sales at the end of the quarter, compared to 3.9% at the end of the same quarter last year."

Results of Operations for the Six Months Ended June 30, 2001

The Company's revenues for the first six months of 2001 reached a record NIS 3.11 billion, an increase of 7.9% compared to NIS 2.88 billion in the same period last year. The increase in revenues resulted mainly from the contribution of new stores.

The Company's same store sales decreased by 4.6% during the six month period compared to the same period last year, mainly as a result of the opening of new stores by the Company and by its competitors, and the continued slow-down of the Israeli economy.

Operating profit for the period reached a record NIS 152 million, an increase of 15.1% compared to NIS 132 million in the same period last year. Operating margin increased to 4.9% compared to 4.6% for the same period last year.

EBITDA for the first six months of 2001 reached a record NIS 242 million, an increase of 16.3%, compared to NIS 208 million in the same period last year.

During the first six months of the year, the Company recorded other expenses of NIS 1 million. During the first six months of 2000, other income included capital gains in the amount of NIS 11 million, mainly from the sale of a plot of land by a subsidiary. Other income fluctuates according to the timing of the sale of assets by the Company, which results in capital gains or losses.

Net profit for the first half of 2001 was NIS 90 million, an increase of 5.6% compared to NIS 85 million in the same period last year. Excluding the effect of capital gains and related taxes, the Company's net profit increased 14.6% compared to the same period last year.

The Company's fully-diluted earnings per share for the period were NIS 0.45 per share (or NIS 2.24 per ADR), an increase of 7.1% compared to NIS 0.42 per share (or NIS 2.09 per ADR) for the same period last year. Excluding the effect of capital gains and related taxes, the Company's earnings per share increased 16.3% compared to the same period last year.

Super-Sol is Israel's largest supermarket chain in terms of revenues. In the US, Super-Sol's American Depositary Receipts, each equivalent to five ordinary shares, trade on the New York Stock Exchange under the symbol "SAE". Prices may be accessed on Reuters with the symbol SAE.N, and the Reuters Equities 2000 Services, Quotron and Bloomberg under the symbol SAE.

The statements contained in this release which are not historical facts contain forward-looking information with respect to plans, projections, or future performance of the Company, the occurrence of which involve certain risks and uncertainties, including risk of market acceptance, the effect of economic conditions, the impact of competitive pricing, supply constraints, the effect of the Company's accounting policies, as well as certain other risks and uncertainties which are detailed in the Company's filings with the Securities and Exchange Commission, particularly the prospectus with respect to its public offering in October 1997.

                            Super-Sol Ltd.

                      Consolidated Balance Sheets

             Adjusted New Israeli Shekels as of June 2001
                                       (In millions)
                                       Convenience
                                       Translation
                                    Into U.S. Dollars  Adjusted NIS

                                        June 30    June 30 December 31
                                          2001       2001      2000

                                       Unaudited  Unaudited   Audited


Assets

Current assets
Cash and cash equivalents                      3        14        17
Marketable securities at market value          0         0         0
Trade receivables, net                       137       569       542
Other current assets                          13        54        57
Inventories                                   93       386       363

                                             246     1,023       979


Investments and loans
Investments                                    6        26        31
Long-term loans and receivables               10        41        40


                                              16        67        71


Fixed assets, net                            566     2,359     2,296


Deferred expenses and other assets            21        89        81


Total assets                                 849     3,538     3,427


Liabilities and Shareholders' Equity

Current liabilities
Short-term bank credits                       22        90        68
Trade payables                               213       887       880
Other payables                                68       283       266
Proposed dividend                              0        -         49


                                             303     1,260     1,263


Long-term liabilities
Loans from banks and others                  105       439       425
Accrued employee severance benefits, net       2         9         7
Deferred taxes                                13        55        48

                                             120       503       480


Shareholders' equity                         426     1,775     1,684


Total liabilities and shareholders' equity   849     3,538     3,427


                            Super-Sol Ltd.

                   Consolidated Statements of Income

             Adjusted New Israeli Shekels as of June 2001

                 (In millions, except per share data)

        Convenience Translation

            Into U.S. Dollars                Adjusted NIS
            Six Months Ended      Six Months Ended  Three Months Ended
                June 30           June 30   June 30  June 30   June 30
                 2001               2001      2000    2001       2000

             Unaudited        Unaudited  Unaudited Unaudited Unaudited

Revenues
Sales                    739       3,079     2,857   1,596     1,489
Rental and operation of    8          33        26      16        13
shopping malls

                         747       3,112     2,883   1,612     1,502

Costs and expenses
Cost of sales            539       2,243  (a)2,103   1,168  (a)1,104
Operating, selling,      172         717  (a)  648     366  (a)  331

                         711       2,960     2,751   1,534     1,435


Operating profit          36         152       132      78        67


Other income
(expenses), net
Finance income            (2)         (8)       (4)      2         4
(expenses), net
Sundry income             (0)         (1)       11      (1)       (1)
(expenses), net


                          (2)         (9)        7       1         3


Earnings before income    34         143       139      79        70
taxes

Income taxes              12          53        54      29        27
Net earnings              22          90        85      50        43


Earnings per share -    0.11        0.45      0.42    0.25      0.21
Earnings per NIS 0.1 par
value


(a) Reclassified


                            Super-Sol Ltd.

                 Consolidated Statements of Cash Flows

             Adjusted New Israeli Shekels as of June 2001

                             (In millions)

                            Convenience Translation

                            Into U.S. Dollars           Adjusted NIS
                            Six Months Ended          Six Months Ended
                                  June 30             June 30  June 30
                                   2001                 2001     2000

                                 Unaudited        Unaudited  Unaudited


Cash flows from operating activities
Net earnings                             22                90      85
Adjustments necessary to
reflect cash flows from                  23                96     306
operating activities

                                         45               186     391

Cash flows from investing activities
Purchase of fixed assets and other
assets, net                             (45)             (186)   (153)
Proceeds of marketable securities, net    0                 0      56
Long term loans repaid, net               2                 7       3
                                        (43)             (179)    (94)

Cash flows from financing activities
Payment of loans, net                     9                38     (25)
Exercise of stock options                 0                 1       2
Dividend paid                           (12)              (49)   (295)

                                         (3)              (10)   (318)

Decrease in cash and cash equivalents    (1)               (3)    (21)

Cash and cash equivalents at the
beginning of the                          4                17      45
period

Cash and cash equivalents at the end
of the                                    3                14      24
period




                            Super-Sol Ltd.

                        Selected Operating Data

                                    Adjusted NIS as of June 2001

                                             Six Months Ended


                                          June 30        June 30
                                           2001           2000


Change in same store sales                 -4.6%          -2.8%



Sales per square meter - NIS               9,017         20,764



No. of stores
at end of period                             156            143



Total square meters
at end of period                         340,700        289,600



Gross profit as a
Percentage of sales                         27.2%      (a) 26.4%



EBITDA (in millions) (1)                     242            208


EBITDA margin (2)                            7.8%           7.2%



Net earnings per share                      0.45           0.42



Net earnings per ADR (3)                    2.24           2.09



Ordinary shares outstanding(4)           205,345        204,048




EBITDA is defined as income before interest expense, sundry income
 (expenses) net, income taxes, depreciation and amortization, and
 minority interest.

    EBITDA as a percentage of total revenue.

    Determined by multiplying net earnings per Ordinary Share times
five.

    Average amount for the period (in thousands).

(a) Reclassified

                                    Three Months Ended   Year Ended


                                   June 30        June 30  December 31
                                     2001           2000      2000


Change in same store sales          -5.4%           5.1%      -2.2%



Sales per square meter - NIS       4,636          5,194     19,580



No. of stores
at end of period                     156            143        151



Total square meters
at end of period                 340,700        289,600    331,600



Gross profit as a
Percentage of sales                 26.8%       (a)25.8%      26.8%



EBITDA (in millions) (1)             124            105        438



EBITDA margin (2)                    7.7%           7.0%       7.4%



Net earnings per share              0.25           0.21       0.83



Net earnings per ADR (3)            1.25           1.06       4.14



Ordinary shares outstanding(4)   204,606        204,048    202,951




EBITDA is defined as income before interest expense, sundry income
 (expenses) net, income taxes, depreciation and amortization, and
 minority interest.

    EBITDA as a percentage of total revenue.

    Determined by multiplying net earnings per Ordinary Share times
five.

    Average amount for the period (in thousands).

(a) Reclassified


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Grocers & Supermarkets 2001

World Food Marketing Directory 2000 - 2nd Edition