Angel Bakeries Raises Fire Damage Estimate to 100 Million NIS Amid Insurance Dispute

Angel Bakeries Group has sharply revised upward its damage estimate from the fire that broke out last May at its production plant in Kfar HaHoresh. While the initial assessment stood at tens of millions of shekels, the company now estimates the total financial impact at a staggering 100 million NIS.

According to a report by Calcalist, despite the massive scale of the damage, the insurance company covering the bakery is refusing to pay out the policy. The insurer claims that findings gathered from the scene indicate that the required safety and protection conditions stipulated in the insurance agreement were not actively maintained at the time of the fire. Due to this deep dispute, both parties have agreed to enter a mediation process, which officially commenced at the end of last month.

Operational and Financial Impact

The destruction at the Kfar HaHoresh plant has caused severe operational disruptions to the company's supply capabilities. The facility's pita production capacity plummeted to just 6,000 pitas per hour, compared to a full output of approximately 20,000 pitas per hour before the fire.

The consequences of the shutdown and the direct damages were heavily reflected in Angel Bakeries' financial reports for the first half of the year. Although the company recorded a slight increase of about 1% in sales (totaling 296.7 million NIS) due to domestic market growth and lower flour prices that improved gross profitability to 40.5%, a direct loss of 25.3 million NIS attributed to the fire wiped out these gains.

Consequently, Angel Bakeries shifted from last year's profits to an operating loss of 11 million NIS, concluding the first half of the year with a net loss of 11.1 million NIS, compared to a net profit of 4.3 million NIS in the corresponding period last year.