Shufersal Ltd. (TASE:SAE), Israel's largest supermarket chain, today reported that its net profit for the second quarter of 2012 was halved, on flat revenue. The company will nevertheless distribute a dividend of NIS 275 million.
Revenue fell 3.8% to NIS 2.9 billion for the second quarter from NIS 3 billion for the corresponding quarter of 2011. Operating profit fell 34% to NIS 99 million for the second quarter from NIS 149 million for the corresponding quarter, and net profit fell 54% to NIS 36 million (NIS 0.17 per share) from NIS 54 million.
Shufersal attributed the plunge in net profit to higher sales, marketing and administrative costs, which rose to NIS 674 million for the second quarter from NIS 660 million for the corresponding quarter, and to lower second quarter sales this year because of the earlier timing of the Passover holiday, which resulted in some sales occurring in the first quarter.
Shufersal chairman Rafi Bisker said, "Shufersal adjusted its operations to the social reality that has emerged. We continue to listen to consumers and offer real discounts. Shufersal's second quarter results show a favorable turnaround and rise in operating profit margins, compared with the preceding quarters. The improvement was achieved by the company's management under Yitzchak Abercohen, and the extensive streamlining measures and the strengthening of infrastructures and strategy. Higher sales alongside ongoing restructuring will continue to be at the center of the company's efforts in the coming months."
Shufersal is a unit of Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) held through Discount Investment Corporation (TASE: DISI). Shufersal's share price rose 1.5% by mid-afternoon to NIS 8.60, giving a market cap of NIS 1.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 5, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012