G. Willi-Food international reports the results of second quarter 2023
YAVNE, Israel, Aug. 30, 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 second quarter ended June 30, 2023.
Second Quarter Fiscal Year 2023
- Sales increased by 4.9% to NIS 129.2 million (US$ 34.9 million) from NIS 123.2 million (US$ 33.3 million) in the second quarter of 2022.
- Gross profit decreased by 32.8% year-over-year to NIS 26.1 million (US$ 7.1 million).
- Operating profit decreased by 93.3% year-over-year to NIS 1.0 million (US$ 0.3 million).
- Net profit decreased by 32.6% year-over-year to NIS 4.9 million (US$ 1.3 million).
- Cash and securities balance of NIS 212.1 million (US$ 57.3 million) as of June 30, 2023.
- Basic earnings per share of NIS 0.4 (US$ 0.1).
Management Comment
Zwi Williger & Joseph Williger, Chairmen & CEO of Willi-Food, commented, "In the second quarter of 2023, the Company experienced increased prices in the products it acquires and the weakening, by approximately 10%, of the Israeli shekel in relation to the euro and US$ currencies. Those two factors negatively affected the Company's profit margins, which was reflected in the Company's second quarter financial results. The Company reached its internal sales goals for the second quarter of 2023 and is working hard to improve its financial results by improving the terms of its commercial arrangements with its suppliers and customers. The Company is also looking for new potential markets abroad to sell its products. We believe that the cost-of-living issue in Israel become more prominent among the public and as a result we believe that the public in Israel is looking for lower cost substitutes for the more familiar food brands. Since most of our products are substitutes to familiar brands, we hope the demand for our products to increase."
Second Quarter Fiscal 2023 Summary
Sales for the second quarter of 2023 increased by 4.9% to NIS 129.2 million (US$ 34.9 million) from NIS 123.2 million (US$ 33.3 million) recorded in the second quarter 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 second quarter of 2023 decreased by 32.8% to NIS 26.1 million (US$ 7.1 million), or 20.2% of revenues, compared to NIS 38.8 million (US$ 10.5 million), or 31.5% of revenues in the second 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 second 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 for the second quarter of 2023 were NIS 18.8 million (US$ 5.1 million), remaining at the same level compared to second quarter of 2022.
General and administrative expenses for the second quarter of 2023 were NIS 6.3 million (US$ 1.7 million), remaining at the same level as in the second quarter of 2022.
Operating profit for the second quarter of 2023 decreased by 93.3% to NIS 1.0 million (US$ 0.3 million) compared to NIS 14.5 million (US$ 3.9 million) in the second quarter of 2022. The decrease was primarily due to the decrease in gross profit.
Financial income, net for the second quarter of 2023 totaled NIS 5.3 million (US$ 1.4 million) compared to a loss of NIS 5.0 million (US$ 1.4 million) in the second quarter of 2022 and provides a positive difference of NIS 10.3 million. Financial income for the second 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 3.4 million (US$ 0.9 million) and (ii) interest and dividend income from the Company's portfolio of securities in the amount of NIS 2.3 million (US$ 0.6 million).
Willi-Food's income before taxes for the second quarter of 2023 was NIS 6.3 million (US$ 1.7 million) compared to NIS 9.5 million (US$ 2.6 million) in the second quarter of 2022.
Willi-Food's net profit in the second quarter of 2023 was NIS 4.9 million (US$ 1.3 million), or NIS 0.35 (US$ 0.1) per share, compared to NIS 7.2 million (US$ 1.9 million), or NIS 0.5 (US$ 0.14) per share, in the second quarter of 2022.
Willi-Food ended the second quarter of 2023 with NIS 212.1 million (US$ 57.3 million) in cash and securities. Net cash from operating activities for the second quarter of 2023 was NIS 4.7 million (US$ 1.3 million).
First Half Fiscal 2023 Highlights
- Sales increased by 16.3% to NIS 280.6 million (US$ 75.8 million) from NIS 241.2 million (US$ 65.2 million) in the first half of 2022.
- Gross profit decreased by 9.5% year-over-year to NIS 66.0 million (US$ 17.8 million).
- Operating income decreased by 41.5% year-over-year to NIS 14.0 million (US$ 3.9 million).
- Net profit decreased by 24.7% year-over-year to NIS 15.7 million (US$ 4.2 million), or 5.6% of sales.
- Basic earnings per share of NIS 1.13 (US$ 0.3).
First Half Fiscal 2023 Summary
Sales for the six-month period ending June 30, 2023 increased by 16.3% to NIS 280.6 million (US$ 75.8 million) compared to NIS 241.2 million (US$ 65.2 million) recorded in the first half of 2022. Sales increased mainly due to increases (i) in the range of the Company's products, (ii) in inventory levels and its availability for the increasing demand for 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 half of 2023 decreased by 9.5% to NIS 66.3 million (US$ 17.9 million), or 23.6% of revenues, compared to NIS 73.0 million (US$ 19.7 million), or 30.3% of revenues, in the first half of 2022. The decrease in gross profit was due to (i) an increase in the costs of the Company's imported products compared to the cost of products in the second 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. The main effect of the increase in the price of products occurred in the second quarter of the year.
General and administrative expenses for the first half of 2023 increased by 16.8% to NIS 13.4 million (US$ 3.6 million), compared General and administrative expenses of NIS 11.5 million (US$ 3.1 million) in the first half 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 half of 2023 decreased by 41.5% to NIS 14.0 million (US$ 3.9 million) from NIS 23.9 million (US$ 6.5 million) for the first half of 2022. The decrease was primarily due to an increase in cost of sales and operating costs.
Financial income, net for the first half of 2023 totaled NIS 5.9 million (US$ 1.6 million) compared to NIS 0.9 million (US$ 0.2 million) in the first half of 2022. Financial income, net for the first half of 2023 was comprised mainly dividend income from the Company's portfolio of securities in the amount of NIS 6.3 million (US$ 1.7 million) and expenses for commissions and other interest in the amount of NIS 1.0 million (US$ 0.3 million)
Willi-Food's income before taxes for the first half of 2023 was NIS 19.8 million (US$ 5.4 million) compared to NIS 24.8 million (US$ 6.7 million) in the first half of 2022.
Willi-Food's net profit in the first half of 2023 was NIS 15.7 million (US$ 4.2 million), or NIS 1.1 (US$ 0.3) per share, compared to NIS 20.9 million (US$ 5.6 million), or NIS 1.5 (US$ 0.41) per share, recorded in the first half 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 June 30, 2023, with U.S. $1.00 equal to NIS 3.7. The translation is made solely for the convenience of the reader.
NOTE B: IFRS
The Company's consolidated financial results for the two-month period ended June 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 23, 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.
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G. WILLI-FOOD INTERNATIONAL LTD. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(unaudited) | ||||||
June 30, | December 31 | June 30, | December 31 | |||
2 0 2 3 | 2 0 2 2 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | 2 0 2 2 | |
NIS | US dollars (*) | |||||
(In thousands) | ||||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | 110,916 | 171,251 | 150,607 | 29,977 | 46,283 | 40,705 |
Financial assets carried at fair value through profit or loss | 101,140 | 134,261 | 116,762 | 27,335 | 36,287 | 31,557 |
Trade receivables | 166,020 | 153,268 | 165,838 | 44,870 | 41,424 | 44,822 |
Other receivables and prepaid expenses | 3,828 | 2,401 | 4,956 | 1,035 | 649 | 1,339 |
Inventories | 98,302 | 73,877 | 71,929 | 26,568 | 19,967 | 19,440 |
Current tax assets | 7,086 | 6,253 | 3,117 | 1,916 | 1,690 | 842 |
Total current assets | 487,292 | 541,311 | 513,209 | 131,701 | 146,300 | 138,705 |
Non-current assets | ||||||
Property, plant and equipment | 108,217 | 90,621 | 99,216 | 29,248 | 24,492 | 26,815 |
Less - Accumulated depreciation | 53,708 | 50,631 | 51,533 | 14,516 | 13,684 | 13,928 |
54,509 | 39,990 | 47,683 | 14,732 | 10,808 | 12,887 | |
Right of use asset | 3,359 | 3,587 | 3,391 | 908 | 969 | 916 |
Financial assets carried at fair value through profit or loss | 44,252 | 31,836 | 44,113 | 11,960 | 8,605 | 11,923 |
Goodwill | 36 | 36 | 36 | 10 | 10 | 10 |
Total non-current assets | 102,156 | 75,449 | 95,223 | 27,610 | 20,392 | 25,736 |
589,448 | 616,760 | 608,432 | 159,311 | 166,692 | 164,441 | |
EQUITY AND LIABILITIES | ||||||
Current liabilities | ||||||
Current maturities of lease liabilities | 2,170 | 781 | 2,194 | 586 | 211 | 593 |
Trade payables | 22,196 | 21,275 | 24,842 | 5,999 | 5,750 | 6,714 |
Employees Benefits | 4,050 | 3,944 | 3,756 | 1,095 | 1,066 | 1,015 |
Financial liabilities at fair value through profit or loss | - | 1,310 | - | - | 354 | - |
Other payables and accrued expenses | 8,329 | 10,401 | 11,836 | 2,252 | 2,811 | 3,199 |
Total current liabilities | 36,745 | 37,711 | 42,628 | 9,932 | 10,192 | 11,521 |
Non-current liabilities | ||||||
Lease liabilities | 1,482 | 2,986 | 1,284 | 401 | 808 | 347 |
Deferred taxes | 4,345 | 2,198 | 4,198 | 1,174 | 594 | 1,135 |
Retirement benefit obligation | 977 | 1,733 | 878 | 264 | 468 | 237 |
Total non-current liabilities | 6,804 | 6,917 | 6,360 | 1,839 | 1,870 | 1,719 |
Shareholders' equity | ||||||
Share capital | 1,490 | 1,490 | 1,490 | 403 | 403 | 403 |
Additional paid in capital | 172,240 | 170,760 | 171,550 | 46,551 | 46,151 | 46,365 |
Remeasurement of the net liability in respect of | (195) | (959) | (195) | (53) | (259) | (53) |
Capital fund | 247 | 247 | 247 | 67 | 67 | 67 |
Retained earnings | 372,745 | 401,222 | 386,980 | 100,742 | 108,438 | 104,589 |
Treasury shares | (628) | (628) | (628) | (170) | (170) | (170) |
Equity attributable to owners of the Company | 545,899 | 572,132 | 559,444 | 147,540 | 154,630 | 151,201 |
589,448 | 616,760 | 608,432 | 159,311 | 166,692 | 164,441 | |
(*) Convenience translation into U.S. dollars. | ||||||
G. WILLI-FOOD INTERNATIONAL LTD. | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
(unaudited) | ||||||
Six months | Three months | Six months | ||||
ended | ended | ended | ||||
June 30, | June 30, | June 30, | ||||
2 0 2 3 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | |
NIS | US dollars (*) | |||||
In thousands (except per share and share data) | ||||||
Sales | 280,600 | 241,224 | 129,244 | 123,155 | 75,838 | 65,196 |
Cost of sales | 214,508 | 168,200 | 103,186 | 84,373 | 57,975 | 45,459 |
Gross profit | 66,092 | 73,024 | 26,058 | 38,782 | 17,863 | 19,737 |
Operating costs and expenses: | ||||||
Selling expenses | 38,700 | 37,597 | 18,781 | 18,359 | 10,460 | 10,161 |
General and administrative expenses | 13,421 | 11,493 | 6,304 | 5,947 | 3,627 | 3,106 |
Other income | 25 | - | - | - | 7 | - |
Total operating expenses | 52,096 | 49,090 | 25,085 | 24,306 | 14,079 | 13,267 |
Operating profit | 13,996 | 23,934 | 973 | 14,476 | 3,783 | 6,470 |
Financial income | 6,220 | 8,940 | 5,683 | 4,877 | 1,681 | 2,416 |
Financial expense | (370) | (8,078) | (359) | (9,863) | (100) | (2,183) |
Total financial income (expense) | 5,850 | 862 | 5,324 | (4,986) | 1,581 | 233 |
Income before taxes on income | 19,846 | 24,796 | 6,297 | 9,490 | 5,364 | 6,703 |
Taxes on income | (4,132) | (3,930) | (1,428) | (2,268) | (1,117) | (1,062) |
Profit for the period | 15,714 | 20,866 | 4,869 | 7,222 | 4,247 | 5,641 |
Earnings per share: | ||||||
Basic earnings per share | 1.1 | 1.5 | 0.4 | 0.5 | 0.3 | 0.41 |
Diluted earnings per share | 1.1 | 1.5 | 0.4 | 0.5 | 0.3 | 0.41 |
Shares used in computation of basic EPS | 13,867,017 | 13,867,017 | 13,867,017 | 13,867,017 | 13,867,017 | 13,867,017 |
Shares used in computation of 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) | ||||||
Six months | Three months | Six months | ||||
ended | ended | ended | ||||
June 30, | June 30, | June 30, | ||||
2 0 2 3 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | |
NIS | US dollars (*) | |||||
(In thousands) | ||||||
CASH FLOWS - OPERATING ACTIVITIES | ||||||
Profit from continuing operations | 15,714 | 20,866 | 4,869 | 7,222 | 4,247 | 5,641 |
Adjustments to reconcile net profit to net cash used to continuing | (32,042) | (24,248) | (184) | (12,900) | (8,660) | (6,554) |
Net cash from (used in) continuing operating activities | (16,328) | (3,382) | 4,685 | (5,678) | (4,413) | (913) |
CASH FLOWS - INVESTING ACTIVITIES | ||||||
Acquisition of property plant and equipment | (8,976) | (3,376) | (2,165) | (1,059) | (2,426) | (912) |
Proceeds from sale of marketable securities, net | 16,033 | 12,056 | 7,540 | 3,851 | 4,332 | 3,256 |
Net cash used in continuing investing activities | 7,057 | 8,680 | 5,375 | 2,792 | 1,906 | 2,344 |
CASH FLOWS - FINANCING ACTIVITIES | ||||||
Lease liability payments | (954) | (1,028) | (461) | (497) | (258) | (278) |
Dividend | (29,949) | (19,966) | (29,949) | (19,966) | (8,094) | (5,396) |
Net cash used to continuing financing activities | (30,903) | (20,994) | (30,410) | (20,463) | (8,352) | (5,674) |
Increase (decrease) in cash and cash equivalents | (40,174) | (15,696) | (20,350) | (23,349) | (10,859) | (4,243) |
Cash and cash equivalents at the beginning of the financial period | 150,607 | 195,718 | 131,472 | 198,339 | 40,705 | 52,897 |
Exchange losses (profit) on cash and cash equivalents | 483 | (8,771) | (206) | (3,739) | 131 | (2,371) |
Cash and cash equivalents of the end of the financial year | 110,916 | 171,251 | 110,916 | 171,251 | 29,977 | 46,283 |
(*) 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: | ||||||
Six months | Three months | Six months | ||||
ended | ended | ended | ||||
June 30, | June 30, | June 30, | ||||
2 0 2 3 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | |
NIS | US dollars (*) | |||||
(In thousands) | ||||||
Decrease (increase) in deferred income taxes | 147 | 181 | 682 | (1,098) | 40 | 49 |
Unrealized loss (gain) on marketable securities | (553) | 6,993 | (3,577) | 9,141 | (149) | 1,890 |
Depreciation and amortization | 3,336 | 3,298 | 1,711 | 1,450 | 902 | 891 |
Capital gain on disposal of property plant and equipment | (25) | - | - | - | (7) | - |
Exchange gain (losses) on cash and cash equivalents | (483) | 8,771 | 206 | 3,739 | (131) | 2,371 |
Unrealized gain of financial liabilities at fair value through profit | - |
(12,650) | - | (5,209) | - | (3,419) |
Stock based compensation reserve | 690 | - | 264 | - | 186 | - |
Changes in assets and liabilities: | ||||||
Increase (decrease) in trade receivables and other receivables | 5,395 | (9,084) | 16,642 | (5,858) | 1,458 | (2,456) |
increase in inventories | (26,373) | (14,349) | (2,706) | (7,341) | (7,128) | (3,878) |
Increase (decrease) in trade and other payables, and other | (5,759) | 693 | (8,323) | (2,470) | (1,556) | 187 |
Cash generated from operations | (23,625) | (16,147) | 4,899 | (7,646) | (6,385) | (4,365) |
Income tax paid | (8,417) | (8,101) | (5,083) | (5,254) | (2,275) | (2,189) |
Net cash flows from operating activities | (32,042) | (24,248) | (184) | (12,900) | (8,660) | (6,554) |
B. Significant non-cash transactions: | ||||||
Six months | Three months | Six months | ||||
ended | ended | ended | ||||
June 30, | June 30, | June 30, | ||||
2 0 2 3 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | 2 0 2 3 | 2 0 2 2 | |
NIS | US dollars (*) | |||||
(In thousands) | ||||||
Dividend Payable | 29,949 | 19,966 | - | - | 8,094 | 5,396 |
(*) 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) 8-932-1000
[email protected]
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SOURCE G. Willi-Food International Ltd.