G. Willi-Food international reports the results of THIRD quarter 2023

Published

YAVNE, Israel, Dec. 21, 2023 /PRNewswire/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (the "Company" or "Willi-Food"), a global company that specializes in the development, marketing and international distribution of kosher foods, today announced its unaudited financial results for the third quarter ended September 30, 2023.

G Willi Food International Logo

Third Quarter Fiscal Year 2023

  • Sales for the third quarter of 2023 were NIS 123.9 million (US$ 32.4 million) remain at the same level as in the third quarter of 2022.
  • Gross profit decreased by 30.9% year-over-year to NIS 23.5 million (US$ 6.1 million).
  • Operating profit decreased by 94.7% year-over-year to NIS 0.5 million (US$ 0.13 million).
  • Net profit decreased by 35.6% year-over-year to NIS 4.9 million (US$ 1.3 million).
  • Cash and securities balance of NIS 221.1 million (US$ 57.9 million) as of September 30, 2023.
  • Basic earnings per share of NIS 0.35 (US$ 0.1).

Management Comment

Zwi Williger & Joseph Williger, Chairmen & CEO of Willi-Food, commented "In the third quarter of 2023, the Company sales remained at the same level compared to the same period last year. We believe that the timing of the holidays (Rosh Hashana) compared to last year's timing, was a significant factor for this stagnation. In addition, our gross margin continues to be negatively affected by the sharp fluctuations in the currency exchange rates. We are working hard to improve the financial results by improving the terms of commercial arrangements with our suppliers and customers. We hope and believe that the hard work will bear fruit and the Company's financial results, sales and gross margin will improve, from the fourth quarter of this year onwards.

"Iron swords" – war

On October 7, 2023, Israel's security cabinet declared war on Hamas, a militant organization located in the Gaza Strip. Following the commencement of this war, hostilities intensified between Israel and Hezbollah, a militant organization located in Lebanon. The war led to a curtailment of business activities in Israel, evacuation of villages and towns bordering the Gaza Strip and in the north of Israel, a significant call‑up of military reserves (including two of our senior executive employees), limitations on gatherings in places of work and public areas, restrictions on carrying on the operation of schools in the educational system and lower availability of work force. These consequences and restrictions minimized Israeli business operations and affected the country's economic activity. Until the date of this report we have not recognized, a material effect on our operations, and we have had sufficient work force to maintain our business and to support the demand for our products which increased after this war started, particularly products with a long shelf life.

Additionally, recently, major shipping firms announced the suspension of operations through a Red Sea strait. We predict that this development will cause delays, increased costs, and potential disruptions to the arrival of goods imported by the Company from the Far East. 

Due to these challenges, as of the date of this report, it remains difficult to accurately assess the extent to which the ongoing conflict may impact our business and financial results in the upcoming quarters and throughout the duration of the war.

Third Quarter Fiscal 2023 Summary

Sales for the third quarter of 2023 were NIS 123.9 million (US$ 32.4 million) remain at the same level as in the third quarter of 2022. One of the reasons for this stagnation is the timing of the Rosh Hashana Holiday which fell on a weekend in the middle of September this year compared to 2022 when the holiday fell on the middle of the week in the end of September. This difference resulted in fewer selling days for the Company

Gross profit for the third quarter of 2023 decreased by 30.9% to NIS 23.5 million (US$ 6.1 million), or 19.0% of revenues, compared to NIS 34.1 million (US$ 8.9 million), or 27.5% of revenues in the third quarter of 2022. The decrease in gross profit was due to (i) increased costs of the Company's imported products compared to the cost of products in the third quarter of 2022, mainly because of an increase in raw materials and (ii) the weakening of the Israeli shekel in relation to the euro and US$ currencies.

Selling expenses decreased by 7.5% to NIS 17.3 million (US$ 4.5 million) compared to NIS 18.7 million (US$ 4.9 million) in the third quarter of 2022. The decrease was primarily due to a decrease in expenses for advertising and promotion.

General and administrative expenses for the third quarter of 2023 were NIS 5.9 million (US$ 1.5 million), remaining at the same level as in the third quarter of 2022.

Operating profit for the third quarter of 2023 decreased by 94.7% to NIS 0.5 million (US$ 0.13 million) compared to NIS 9.5 million (US$ 2.5 million) in the third quarter of 2022. The decrease was primarily due to the decrease in the gross profit.

Financial income, net for the third quarter of 2023 totaled NIS 5.7 million (US$ 1.5 million) compared to NIS 0.04 million (US$ 0.01 million) in the third quarter of 2022. Financial income for the third quarter of 2023 was comprised mainly of (i) income from revaluation of the Company's portfolio of securities to fair value in the amount of NIS 2.5 million (US$ 0.65 million) and (ii) interest and dividend income from the Company's portfolio of securities in the amount of NIS 2.6 million (US$ 0.68 million).

Willi-Food's income before taxes for the third quarter of 2023 was NIS 6.2 million (US$ 1.6 million) compared NIS 9.6 million (US$ 2.5 million) in the third quarter of 2022.

Willi-Food's net profit in the third quarter of 2023 was NIS 4.9 million (US$ 1.3 million), or NIS 0.35 (US$ 0.09) per share, compared to NIS 7.6 million (US$ 2.0 million), or NIS 0.55 (US$ 0.14) per share, in the third quarter of 2022.

Willi-Food ended the third quarter of 2023 with NIS 221.1 million (US$ 57.9 million) in cash and securities. Net cash used in operating activities for the third quarter of 2023 was NIS 8.4 (US$ 2.1 million).

First Nine Months of Fiscal 2023 Highlights

  • Sales increased by 10.8% to NIS 404.5 million (US$ 105.9 million) from NIS 365.1 million (US$ 95.6 million) in the first nine months of 2022.
  • Gross profit decreased by 16.3% year-over-year to NIS 89.6 million (US$ 23.5 million).
  • Operating income decreased by 56.7% year-over-year to NIS 14.5 million (US$ 3.8 million).
  • Net profit decreased by 27.6% year-over-year to NIS 20.6 million (US$ 5.4 million), or 5.1% of sales.
  • Basic earnings per share of NIS 1.49 (US$ 0.39).

First Nine Months Fiscal 2023 Summary

Sales for the first nine-months period ending September 30, 2023 increased by 10.8% to NIS 404.5 million (US$ 105.9 million) compared to NIS 365.1 million (US$ 95.6 million) in the first nine months of 2022. Sales increased mainly due to increases (i) in the range of the Company's products, (ii) in our inventory levels and its availability for the demand of our products, (iii) in the Company's efforts to improve presence of the Company's line of products in stores and (iv) in advertising and promotional campaigns.

Gross profit for the first nine-months of 2023 decreased by 16.3% to NIS 89.6 million (US$ 23.5 million), or 22.2% of revenues, compared to NIS 107.1 million (US$ 28.0 million), or 29.3% of revenues, in the first nine months of 2022. The decrease in gross profit and margin was due to (i) an increase in the costs of the Company's imported products compared to the cost of products in the third quarter of 2022, mainly because of an increase in raw materials and (ii) the weakening of the Israeli shekel in relation to the euro and dollar currencies.

Selling expenses for the first nine-months of 2023 were NIS 56.0 million (US$ 14.7 million), remaining at the same level compared to first nine-months of 2022.

General and administrative expenses for the first nine-months of 2023 were NIS 19.3 million (US$ 5.1 million), compared General and administrative expenses of NIS 17.3 million (US$ 4.5 million) in the first nine months of 2022. The increase was primarily due to an increase in management compensation and options grants made under the Company's option plan.

Operating profit for the first nine-months of 2023 decreased by 56.7% to NIS 14.5 million (US$ 3.8 million) from NIS 33.4 million (US$ 8.7 million) for the first nine-months of 2022. The decrease was primarily due to an increase in cost of sales and operating costs.

Financial income net, totaled NIS 11.6 million (US$ 3.0 million) compared to financial income, net of NIS 0.9 million (US$ 0.2 million) in the first nine months of 2022. Financial income, net for the first nine months of 2023 was comprised mainly of income interest and dividend income from the Company's portfolio of securities in the amount of NIS 8.2 million (US$ 2.1 million) and income for revaluation of the Company's portfolio of securities to fair value in the amount of NIS 2.7 million (US$ 0.7 million). 

Willi-Food's income before taxes for the first nine-months of 2023 was NIS 26.1 million (US$ 6.8 million) compared to NIS 34.4 million (US$ 9.0 million) in the first nine-months of 2022.

Willi-Food's net profit in the first nine-months of 2023 was NIS 20.6 million (US$ 5.4 million), or NIS 1.49 (US$ 0.39) per share, compared to NIS 28.5 million (US$ 7.5 million), or NIS 2.05 (US$ 0.54) per share, recorded in the first nine-months of 2022.

NOTE A: NIS to US$ exchange rate used for convenience only

Convenience translation of New Israeli Shekels (NIS) into U.S. dollars was made at the rate of exchange prevailing on September 30, 2023, with U.S. $1.00 equal to NIS 3.82. The translation is made solely for the convenience of the reader.

NOTE B: IFRS

The Company's consolidated financial results for the three-month period ended September 30, 2023 are presented in accordance with International Financial Reporting Standards ("IFRS").

About G. Willi-Food International Ltd.

G. Willi-Food International Ltd. (http://www.willi-food.com) is an Israeli-based company specializing in high-quality, great-tasting kosher food products. Willi-Food is engaged directly and through its subsidiaries in the design, import, marketing and distribution of over 650 food products worldwide. As one of Israel's leading food importers, Willi-Food markets and sells its food products to over 1,500 customers and 3,000 selling points in Israel and around the world, including large retail and private supermarket chains, wholesalers and institutional consumers. The Company's operating divisions include Willi-Food in Israel and Euro European Dairies, a wholly owned subsidiary that designs, develops and distributes branded kosher, dairy-food products.

FORWARD LOOKING STATEMENT

This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding trends, demand for our products and expected sales, operating results, and earnings. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. These risks and other factors include but are not limited to: war in Ukraine, the COVID-19 pandemic, disruptions to international commercial shipping and disruptions in commodity pricing monetary risks including changes in marketable securities or changes in currency exchange rates- especially the NIS/U.S. Dollar exchange rate, payment default by any of our major clients, the loss of one of more of our key personnel, changes in laws and regulations, including those relating to the food distribution industry, and inability to meet and maintain regulatory qualifications and approvals for our products, termination of arrangements with our suppliers, loss of one or more of our principal clients, increase or decrease in global purchase prices of food products, increasing levels of competition in Israel and other markets in which we do business, changes in economic conditions in Israel, including in particular economic conditions in the Company's core markets, our inability to accurately predict consumption of our products and changes in consumer preferences, our inability to protect our intellectual property rights, our inability to successfully integrate our recent acquisitions, insurance coverage not sufficient enough to cover losses of product liability claims, and risks associated with product liability claims. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading "Risk Factors" in the Company's Annual Report on Form 20-F for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 15, 2023. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information contained in this press release.

 

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

September 30,

December 31

September 30,

December 31

2023

2022

2022

2023

2022

2022

NIS

US dollars (*)

(in thousands)

ASSETS

Current assets

Cash and cash equivalents

121,231

158,016

150,607

31,736

41,365

39,426

Financial assets carried at fair value through profit or loss

99,895

134,506

116,762

26,151

35,211

30,566

Trade receivables

155,857

147,053

165,838

40,800

38,496

3,413

Other receivables and prepaid expenses

8,433

3,161

4,956

2,208

827

1,297

Inventories

75,807

71,811

71,929

19,845

18,799

18,830

Current tax assets

9,556

6,042

3,117

2,502

1,582

816

Total current assets

470,779

520,589

513,209

123,242

136,280

134,348

Non-current assets

Property, plant and equipment

115,789

92,067

99,216

30,311

24,101

25,973

Less - Accumulated depreciation

54,750

51,689

51,533

14,332

13,531

13,490

61,039

40,378

47,683

15,979

10,570

12,483

Right of use asset

2,729

3,679

3,391

714

963

888

Financial assets carried at fair value through profit or loss

44,505

31,922

44,113

11,651

8,357

11,548

Goodwill

36

36

36

9

9

9

Total non-current assets

108,309

76,015

95,223

28,353

19,899

24,928

579,088

596,604

608,432

151,595

156,179

159,276

EQUITY AND LIABILITIES

Current liabilities

Current maturities of lease liabilities

1,847

569

2,194

484

149

574

Trade payables

16,873

16,985

24,842

4,417

4,446

6,503

Employees Benefits

4,132

3,744

3,756

1,082

980

983

Other payables and accrued expenses

8,342

8,045

11,836

2,184

2,106

3,098

Total current liabilities

31,194

29,343

42,628

8,167

7,681

11,158

Non-current liabilities

Lease liabilities

1,079

3,310

1,284

282

866

336

Deferred taxes

4,742

1,997

4,198

1,241

523

1,099

Retirement benefit obligation

1,030

1,811

878

270

474

230

Total non-current liabilities

6,851

7,118

6,360

1,793

1,863

1,665

Shareholders' equity

Share capital

1,490

1,490

1,490

390

390

390

Additional paid in capital

172,477

171,115

171,550

45,151

44,794

44,909

Remeasurement of the net liability in respect of defined benefit

(195)

(959)

(195)

(51)

(251)

(51)

Capital fund

247

247

247

65

65

65

Retained earnings

367,652

388,878

386,980

96,244

101,801

101,304

Treasury shares

(628)

(628)

(628)

(164)

(164)

(164)

Equity attributable to owners of the Company

541,043

560,143

559,444

141,635

146,635

146,453

579,088

596,604

608,432

151,595

156,179

159,276

(*)        Convenience translation into U.S. dollars.

 

 

 

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Nine months

Three months

Nine months

ended

ended

ended

September 30,

September 30,

September 30,

2023

2022

2023

2022

2023

2022

NIS

US dollars (*)

In thousands (except per share and share data)

Sales

404,521

365,124

123,921

123,900

105,896

95,582

Cost of sales

314,895

258,029

100,387

89,829

82,433

67,547

Gross profit

89,626

107,095

23,534

34,071

23,462

28,035

Operating costs and expenses:

Selling expenses

55,982

56,275

17,282

18,678

14,655

14,732

General and administrative expenses

19,311

17,349

5,890

5,856

5,055

4,541

Other income

165

-

140

-

43

-

Total operating expenses

75,128

73,624

23,032

24,534

19,667

19,273

Operating profit

14,498

33,471

502

9,537

3,795

8,762

Financial income

12,142

11,194

5,923

2,616

3,179

2,930

Financial expense

550

10,296

181

2,580

144

2,695

Total financial income

11,592

898

5,742

36

3,035

235

Income before taxes on income

26,090

34,369

6,244

9,573

6,830

8,997

Taxes on income

5,471

5,881

1,339

1,951

1,432

1,539

Profit for the period

20,619

28,488

4,905

7,622

5,398

7,458

Earnings per share:

Basic / Diluted earnings per share

1.49

2.05

0.35

0.55

0.39

0.54

Shares used in computation ofbasic / diluted EPS

13,867,017

13,867,017

13,867,017

13,867,017

13,867,017

13,867,017

Actual number of shares

13,867,017

13,867,017

13,867,017

13,867,017

13,867,017

13,867,017

(*)        Convenience translation into U.S. dollars.

 

 

 

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Nine months

Three months

Nine months

ended

ended

ended

September 30,

September 30,

September 30,

2023

2022

2023

2022

2023

2022

NIS

US dollars (*)

(in thousands)

CASH FLOWS - OPERATING ACTIVITIES

Profit from continuing operations

20,619

28,488

4,905

7,622

5,398

7,458

Adjustments to reconcile net profit to net cash used to continuing operating activities (Appendix A)

(12,225)

(18,996)

19,817

5,251

(3,200)

(4,973)

Net cash from continuing operating activities

8,394

9,492

24,722

12,873

2,198

2,485

CASH FLOWS - INVESTING ACTIVITIES

Acquisition of property plant and equipment

(16,548)

(4,823)

(7,572)

(1,447)

(4,332)

(1,263)

Proceeds from sale of marketable securities, net

19,772

9,833

3,739

(2,223)

5,176

2,574

Net cash used in (from) continuing investing activities

3,224

5,010

(3,833)

(3,670)

844

1,311

CASH FLOWS - FINANCING ACTIVITIES

Lease liability payments

(1,681)

(1,611)

(727)

(583)

(440)

(422)

Dividend

(39,946)

(39,932)

(9,997)

(19,965)

(10,457)

(10,453)

Net cash used to continuing financing activities

(41,627)

(41,543)

(10,724)

(20,548)

(10,897)

(10,875)

Increase (decrease) in cash and cash equivalents

(30,009)

(27,041)

10,165

(11,345)

(7,856)

(7,079)

Cash and cash equivalents at the beginning of the financial period

150,607

195,718

110,916

171,251

39,426

51,235

Exchange losses (profit) on cash and cash equivalents

633

(10,661)

150

(1,890)

166

(2,791)

Cash and cash equivalents of the end of the financial year

121,231

158,016

121,231

158,016

31,736

41,365

(*)        Convenience Translation into U.S. Dollars. 

 

 

 

G. WILLI-FOOD INTERNATIONAL LTD.

APPENDIX A TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

CASH FLOWS - OPERATING ACTIVITIES:

A.         Adjustments to reconcile net profit to net cash from operating activities:

Nine months

Three months

Nine months

ended

ended

ended

September 30,

September 30,

September 30,

2023

2022

2023

2022

2023

2022

NIS

US dollars (*)

(in thousands)

Decrease (increase) in deferred income taxes

544

(20)

397

(201)

142

(5)

Unrealized loss (gain) on marketable securities

(3,297)

8,885

(2,744)

1,892

(863)

2,326

Depreciation and amortization

5,008

4,958

1,672

1,660

1,311

1,298

Capital gain on disposal of property plant and equipment

(25)

-

-

-

(7)

-

Exchange gain (losses) on cash and cash equivalents

(633)

10,661

(150)

1,890

(166)

2,791

Unrealized gain of financial liabilities at fair value through profit or loss

-

(13,960)

-

(1,310)

-

(3,654)

Stock based compensation reserve

926

355

236

355

242

93

Changes in assets and liabilities:

Increase (decrease) in trade receivables and other receivables

10,882

(496)

5,487

8,588

2,849

(130)

Decrease (increase) in inventories

(3,878)

(12,283)

23,495

2,066

(1,015)

(3,215)

Decrease in trade and other payables, and other current liabilities

(10,935)

(6,073)

(5,176)

(6,767)

(2,863)

(1,590)

Cash generated used in (from) operations

(1,408)

(7,973)

22.217

8,173

(370)

(2,087)

Income tax paid

(10,817)

(11,023)

(2,400)

(2,922)

(2,832)

(2,886)

Net cash flows from (used in) operating activities

(12,225)

(18,996)

19,817

5,251

(3,202)

(4,973)

 (*)       Convenience Translation into U.S. Dollars. 

This information is intended to be reviewed in conjunction with the Company's filings with the Securities and Exchange Commission.

Company Contact:G. Willi - Food International Ltd.Yitschak Barabi, Chief Financial Officer(+972) 8-932-1000itsik.b@willi-food.co.il

Cision View original content:https://www.prnewswire.com/news-releases/g-willi-food-international-reports-the-results-of-third-quarter-2023-302020975.html

SOURCE G. Willi-Food International Ltd.

In This Story

WILC