Victory's gross profit increased by 34% in the second quarter of 2020 to NIS 152 million

Victory's gross profit increased by 34% in the second quarter of 2020 compared to the corresponding quarter in 2019, and amounted to NIS 152 million, which is 25.5% of turnover - compared to 25.2% of turnover in the corresponding quarter. Ravid explains the improvement in gross profitability by strengthening the company's strength vis-à-vis suppliers, as a result of the sharp increase in its sales, and he estimates that the acquisition of the new branches will have a material effect on the company's growth.
Victory's operating profit increased by 48% in the past quarter compared to the corresponding quarter, and amounted to NIS 24 million, which is 4.1% of turnover - compared to 3.6% of turnover in the corresponding quarter. The increase in profit and operating profitability could have been sharper, had it not been for a 36% increase in selling expenses to a level of NIS 120 million - which is 20.1% of turnover compared to 19.7% of turnover in parallel in 2019.
Ravid explains the sharp increase in sales and marketing expenses in massive one-time advertising of the new branches, in light of the sparse traffic in the malls; Termination of settlement with the Mega chain owned by Bitan Wines regarding the loan of employees in the new branches; And relatively high expenses for the two branches acquired in March.
Victory's current operations generated a surplus of NIS 65 million in cash flow in the second quarter of 2020, compared with a cash flow surplus of NIS 24 million in the corresponding quarter. Ravid estimates that in the short term consumption will be slightly higher than the average before the Corona crisis, due to the continued restrictions on the activities of restaurants, cafes and banquet halls, as well as due to the slow return of the aviation industry to full activity.
Victory estimates that it has managed to retain some of the increase in customers in the Corona crisis, and therefore the increase in sales of identical stores will continue in its estimation - with this increase being added to the sales of the stores in Malcha Mall and Ayalon Mall. Victory does not anticipate a material harm to its revenues due to a possible deterioration in the economic situation in the economy because it sells basic consumer goods. In her opinion, if there is an increased outbreak of the corona epidemic, this will lead to a significant increase in its revenues, assuming that the manner in which the authorities treat the second outbreak will be similar to the treatment that characterized the first outbreak.