Electra Consumer Products Company (TSE: ECP), headed by Zvika Schwimmer and part of the Elco Group (TSE: ELCO) controlled by the Salkind brothers, continues to convert its Mega Winote Petan supermarket branches to Carrefour format, and after several years Tough, you’re starting to see the fruits of that effort.
In the third quarter of this year, Carrefour branches achieved profits for Electra Consumer Products Company amounting to 820 thousand shekels, compared to a loss of 23 million shekels in the corresponding quarter of last year. This small profit is of course insignificant from a financial standpoint, but it indicates that the move is starting to work. So far, consumer products company Electra has converted 110 supermarket branches to the Carrefour brand (eight in the third quarter) out of 149 branches in total, leaving 26 Mega branches and 13 Yinote Petan branches.
For the first nine months of 2024, Carrefour Israel is still showing a loss, as the small third-quarter profits do not cover the losses of the previous six months. Carrefour Israel recorded a loss of NIS 46.2 million for the first nine months, which represents a significant improvement from the loss of NIS 148 million in the corresponding period of 2023.
Electra Consumer Products’ revenue from the supermarket segment rose 7.2% in the third quarter to NIS 890 million, and operating profit before net other income and restructuring expenses rose 2.5 times to NIS 38.2 million. During the first nine months, the food sector contributed NIS 2.5 billion to Electra Consumer Products Company’s total profits, and turned into an operating profit before net other income and restructuring expenses of NIS 66.7 million, compared to an operating loss of NIS 71.8 million in the corresponding period of 2023. .
In May this year, Electra Consumer Products divested itself of its stake in 7 Eleven Israel, and sold the remaining branches of the Seven Express chain. In this case, Electra Consumer Products decided to quickly reduce its losses (which amounted to about 70 million shekels).
In the electrical retail sector as well, the company has seen significant improvement. It has 85 branches of electrical goods stores Mahsani Hashemal and Shechem Electric. Third-quarter sales increased by 18% to NIS 678 million. The company says that with the exception of duty-free branches, whose business was severely damaged by the Iron Sword War and the decline in passenger traffic at Israeli airports, the sector’s revenues increased by 22.5%.
Taking all the group’s activities together, Electra Consumer Products’ revenues in the third quarter totaled NIS 1.98 billion. Operating profits before net other income and restructuring expenses increased by 27% compared to the third quarter of 2023, reaching 91 million shekels. The company achieved a net profit during the quarter of 27.1 million shekels, compared to a net loss of about 16 million shekels in the corresponding quarter.
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During the first nine months of 2024, Electra Consumer Products recorded a net profit of NIS 20.6 million, compared to a net loss of NIS 130.6 million in the corresponding period of 2023.
The company did not mention in its financial statements any reform in imports of electrical goods, but it should benefit from it. In mid-August, the first phase of the reform went into effect, allowing various products to be imported into Israel such as computers, microwave ovens, printers and wireless receivers without bureaucracy, with the aim of opening the local market to competition. Reducing prices for the consumer.
The second phase of the reform is more important for Electra’s consumer products. It includes more electrical goods such as refrigerators, washing machines, televisions, dishwashers, dryers, etc. The Ministry of Energy estimates the size of the electrical goods market in Israel at about 10 billion shekels annually.
Electra Consumer Products’ share price on the Tel Aviv Stock Exchange rose by about 12%, raising the company’s market value to more than NIS 2 billion. The stock price has risen 26% year to date, despite falling 45% over the past three years.
Published by Globes, Israel Business News – en.globes.co.il – on November 25, 2024.
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