Frutarom Continues Sales Growth in 3Q

HAIFA, IsraelFrutarom (TASE:FRUT) continued its seven-year sales growth trend with third quarter sales of $87.7 million (USD), a 23-percent rise over sales from the same period last year. According to management, excluding the influence of the strengthening Western European currencies, Frutarom's sales for the quarter grew 20 percent. Sales gains were primarily attributed to increased flavor division sales, the integration of various recent acquisitions, the utilization of synergy and cross-selling opportunities between Frutaroms divisions, strengthening European currencies against the U.S. dollar, and growth in trade and marketing in Israel.

Despite the top line growth, net profit for the quarter slipped to $5.9 million (USD) from $7.0 million (USD) earned in the same quarter last year. Management noted this margin was influenced by increasing raw materials prices and the costs of integrating various acquisitions, which have contributed to sales, but not to profit.

Ori Yehudai, president and CEO of Frutarom (Frutarom.com), said he expects sales growth to intensify as the company realizes the synergy of its acquisitions. "Our plans for the merger of this year's seven acquisitions are progressing according to our expectations, and during the fourth quarter we expect to complete the integration of Belmay and Jupiter in England, Raychan and Adumim in Israel, and Abaco in the United States, while achieving substantial savings and improving these activities' margin," he said. "Upon completing these processes, the acquisitions made this year will contribute not just to the ongoing upward trend in sales, but also to substantial growth in profit while improving margin." He added, "Frutarom, similar to many of our customers in the global food market, is working to raise the selling prices of its products in order to adjust them to the continuing rise in raw materials prices."