willi-food concludes a quarter with a strong improvement in profitability

willi-food concludes a quarter with a strong improvement in profitability - thanks, among other things, to the decrease in the cost of importing products (which did not lead to a reduction in prices for consumers), and the sharp reduction in operating expenses.
In view of the aforementioned favorable conditions, the company recorded a profit of NIS 3.5 million in the second quarter, an increase of 4.7% compared to the corresponding quarter last year.
The sales of the company controlled by the brothers Zvika and Yossi Williger grew by 13.5% to NIS 146.6 million - an increase that is mainly attributed to the increase in the inventory balance and the availability of products to support demand. The gross profit jumped by 76.2% to NIS 45.9 million, according to the company mainly thanks to the improvement in the purchase costs of the imported products. Accordingly, there was a strong increase in gross profitability to 31.3%, against 22.2% in the corresponding quarter.
The company recorded a one-time expense of NIS 11.6 million during the reporting period, a fine it paid for violating the provisions of the Food Law. At the same time, Willipod reduced sales and marketing expenses to 12.7% of sales, compared to 14.5% in the corresponding quarter, and administrative and general expenses to 4.3% of sales, compared to 5.1% in the corresponding quarter.
The cut in expenses led to a jump in operating profit, to NIS 21 million, compared to NIS 667,000 in the corresponding quarter - operating profitability jumped to 14.3%, compared to 0.5% a year ago.
The company stated in its reports that 34% of its products are imported from the Far East, and following the decision of shipping companies to stop sailing in the Red Sea, and to change the sailing routes to a route around Africa, the transportation time of products imported from this region was extended by 3-4 weeks. The company stated that a substantial increase in the cost of sea transportation could have a negative impact on its results.
In January of this year, the company increased the price of products imported from the Far East (rice, noodles, canned goods, etc.) by up to 15%. Willipod hinted at its intention to raise prices in its reports for the third quarter of last year, but then Zvika Williger said that it would not raise prices during the war.
The statements did not last, and within a short time the company announced the aforementioned price increase, which it explained as force majeure. The company stated at the time that "the steep increases in sea transportation prices, following the 'Iron Swords' war and the international crisis created by the Houthis in Yemen, the price of transportation increased from $1,500 to $7,200 and the duration of transportation doubled. As a result, and without any choice, it was decided to raise prices Solidity only on products imported from the East - and this with the aim of providing all our customers with all the products."