Sales and Acquisitions Boost Frutarom Results

HAIFA, Israel—Frutarom Ltd. enjoyed a 37-percent growth in third quarter (3Q) revenues, which reached $120 million (USD) on the strength of increased sales of flavors and natural ingredients, as well as the integration of recently acquired businesses. Gross margin widened to about 38 percent, up from 36 percent the year prior, and net income jumped 61 percent to 9.4 million (USD) from $5.9 million earned in 3Q last year.

Management credited the gains to internal growth in sales of flavors produced and sold by the Flavors Division; internal growth in the sale of unique ingredients, mainly natural, produced and sold by the Fine Ingredients Division; the acquisitions of Gewurzmuller, Raychan, Adumim and Rad during the second half of 2007 and their integration with Frutarom's global activity; the synergy and cross-selling opportunities between Frutarom's divisions and its customers and products, both the existing ones and those added as a result of the acquisitions carried out in recent years; and the strengthening—during the quarter—of the European currencies and the Shekel (in which most of Frutarom's sales are made) against the U.S. dollar.

"We view this challenging and complex period in the global economy as an opportunity to further establish our position," said Ori Yehudai, president and CEO, acknowledging the currently shifting currency and credit positions in the global economy. "Frutarom's core business—mostly intended for the food industry (a basic human need)—its solid capital structure, and its ability to generate cash from current activities, will enable us to successfully glide through the global economic crisis and exploit the opportunities which have emerged and continue to emerge as a result of this crisis."