Bethel Finance: Osem beats protesters with revenue, profit growth

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Bethel Finance news:

Osem Investments Ltd. posted revenue and profit growth for the third quarter of 2011, despite the social protest and threatened consumer boycotts, which compelled the food company to lower prices on some items. The company attributed its growth to the timing of the Jewish New Year holiday this year, and to its international operations.

Revenue rose 5.9% to NIS 1.04 billion for the third quarter from NIS 986,2 million for the corresponding quarter of 2010, and net profit rose 12.2% to NIS 101.8 million from NIS 90.8 million.

Profits from Materna infant formula, a particular target of the consumer boycotts, rose to NIS 16.9 million for the third quarter from NIS 13 million for the corresponding quarter, which the company attributed to taking over distribution and to installation of Nestle technologies and other improvement at the unit's factor. Osem said that these improvements enabled it to lower consumer prices.

Profits from the culinary products business rose to NIS 18.4 million for the third quarter from NIS 16.4 million for the corresponding quarter; profits from snacks and breakfast cereals rose to NIS 41.5 million from NIS 40.1 million, partly thanks to new products; profits from baked goods and beverages rose to NIS 13 million from NIS 11.2 million, thanks to new cakes and other products; and profits from prepared foods rose to NIS 16.9 million from NIS 15.2 million.

Osem said, "During the third quarter, a social protest emerged in Israel, mainly due to the steady rise in prices for home, food, and the cost of living in general. Since the outbreak of the protest, Osem has discussed how to meet the public's demands and initiated measures to help lower prices for basic food items… These measures are only part of Osem's social plan for 2012, which includes changes in the salary structure at the group, which has 4,700 employees, including a salary freeze for executives in 2012 and transferring the resulting surplus to employees who earn less than the average national wage."

Nestle owns the controlling interest in Osem. Osem's share price rose 4.5% by early afternoon to NIS 53.37, giving a market cap of NIS 5.7 billion.