Israel's Frutarom profit up 30 pct on acquisitions, new products
TEL AVIV Aug 21 (Reuters) - Israeli flavourings and specialty ingredients company Frutarom Industries posted a 30 percent increase in net profit on record quarterly revenue due to acquisitions and the launch of products with higher margins.
Frutarom said on Wednesday second-quarter net profit increased to $17.6 million from $13.5 million a year earlier. Revenue rose 2.3 percent to $168.6 million.
"Organic growth, strategic acquisitions, stabilisation of prices of raw materials and improvements in product mix all led to a significant improvement in Frutarom's profit," the company said, noting the improved product mix was the result of the launch of natural and health products with higher margins.
The company has made eight acquisitions since 2011.
"Our capital structure and net debt level, which stands at $131.3 million, supported by our strong cash flow, will allow us to successfully continue to realise our rapid and profitable growth strategy," Frutarom Chief Executive Ori Yehudai said.
The company said it will continue to expand in emerging markets in China and South East Asia, Eastern Europe and Africa. The growth trend in emerging markets is expected to continue into next year.
Integration of production sites and transfer of activities to countries where production costs are lower will bring about annual savings of $10 million. The impact of these activities will be felt in the second half of 2013 and mainly in 2014. (Reporting by Tova Cohen)