Buying Materna boosts Osem sales

Food manufacturer Osem's sales neared a billion shekels for the second quarter of 2010, boosted by the acquisition of baby formula maker Materna.

Osem, which is controlled by the global conglomerate Nestle, reported a 10% increase in sales yesterday compared with the corresponding quarter of 2009 to NIS 929 million.

About three-quarters of the increase derived from Materna.

Though Osem announced its intentions to acquire a controlling stake in Materna in late 2008, it only began to consolidate its results this year.

Operating profit increased by 23% against the same three months of last year to almost NIS 114 million, the company said.

The company posted net profit attributable to shareholders of NIS 68 million, an increase of 19% compared with the same quarter a year ago.

Shareholders have already received a cherry from the foodstuffs manufacturer: At the end of June, Osem paid a dividend of NIS 100 million.

Osem is Israel's third-biggest food maker. Its operations can be divided into two main segments: foods stored at room temperature such as snacks (its fabled Bamba, for instance ), chocolate products, dehydrated pastas and soup powders, and much more; and frozen foods, from vegetables to processed products to ice cream to sausages. The company derives about 80% of its revenues in Israel and 20% from exports, most notably by its subsidiaries Tivall and Food Tech.

Sales of room-temperature foods, which comprise 60% of Osem's total, increased by 14% to NIS 541 million in the second quarter. Frozen food sales increased 5.2% against the same period of 2009 to NIS 388 million.

Osem holds options to buy the outstanding 49% of Materna, as well as the outstanding 42% of Tivall.