Israel-based flavour and fragrances firm Frutarom reported a rise in both sales and profits for the second quarter, although integration of its newly acquired Swiss natural extracts activities, Emil Flachsmann, is likely to take a toll on full year results.
Frutarom's second quarter 2003 sales totalled NIS 139.2 million (€27.8m), up 9.8 per cent compared with NIS 126.7 million in the parallel quarter in 2002 and NIS 116.5 million in 2001. The company's sales during the first half of 2003 came to NIS 260.7 million compared with sales of NIS 243.4 million during the parallel period (NIS 220m during the parallel period in 2001).
Meanwhile gross profit rose 14.9 per cent during the second quarter of 2003 to NIS 46.7 million compared with NIS 40.6 million during the second quarter of 2002. Profitability rose from 32.1 per cent to 33.6 per cent. During the first half of the year gross profit stood at NIS 85.3 million compared with NIS 77.7 million during the parallel period last year (NIS 71m during the first half of 2001).
However, selling, administration and general expenses rose for the second quarter of 2003, mainly due to growth in activity and continued consolidation of Frutarom's global network. Frutarom is also currently working to merge Flachsmann's activity with Frutarom's global network, according to Ori Yehudai, the Frutarom Group's president and CEO.
He said the programme should yield considerable cost savings, through cooperation between the R&D departments, better efficiency of operations, logistics and production, and a joint purchasing network to bring in savings on raw materials.
Flachsmann's results will be consolidated with the group's performance from the third quarter of the year.
Frutarom is aiming to become one of the world's top ten flavour and fragrance companies, and with growth in net profit for the second quarter of 28.6 per cent compared with the same quarter in 2002 and 84 per cent compared with the second quarter of 2001, it claims to have implemented ongoing improvement in the company's product mix and continued sales growth. Sales of the Flavors Compounds division, the more profitable of Frutarom's varied activities, will receive continued investment.