Osem Reports 6% Increase in Q2 Sales to NIS 653 Million

Food giant says quarterly profit increased 10% to NIS 46 million

Food giant Osem Food Industries (TASE: OSEM) today reported a 6% year over year increase in sales for the second quarter of 2006, to NIS 653 million.

Osem, which is owned by the Propper family and the Nestle foodstuffs concern, said profit (excluding one-time items) increased 10% compared with the year before to NIS 46 million.

Most of the one-time items in the second quarter of 2006 were charges on moving its cake-baking plant to Yokneam.

If the charges are included, Osem netted NIS 44 million, a drop of five million shekels from the parallel quarter of 2005.

Domestic sales increased by 3.5% to NIS 559 million, said Osem which is managed by Gazi Kaplan and chairman Dan Propper.

Foreign sales shot up 22% year over year to NIS 95 million.

Rival company Strauss-Elite Industries (TASE: STEL) also reported less than 5% growth in domestic sales. Possibly the local stagnation is what has propelled Osem to more aggressively develop its local business: in early August the company announced buying the Bonjour coffee shop chain from Eliezer Fishman for NIS 117 million.

First-half sales rose nearly 6% to NIS 1.3 billion. Operating profit increased the same to NIS 141 million, which the company attributed to higher sales and to efficiency measures in production and distribution.

Half-year profit was NIS 91 million, a small increase from NIS 88 million the year before. But minus one-time items, profit reached NIS 94 million, against NIS 81 million the year before, and that's already a much better showing.

Shares in Osem have inched up 1.7% this year, while the benchmark TA-100 index has risen by a mere 0.7%. Its market capitalization on the Tel Aviv Stock Exchange is NIS 3.745 billion.