Strauss profit doubled to 195 million shekels despite revenue decline

The Strauss Group published its reports for the second quarter of 2026, continuing the trends from the previous period. Revenues declined by 6.7% to 2.9 billion shekels, but operating profit jumped by 42% to 363 million shekels, and net profit attributable to shareholders more than doubled to 195 million shekels.

Excluding the impact of foreign currency translation, revenues declined by only 1.9%. The reported weakness stems primarily from the strong shekel, which reduces the value of revenues generated in Brazil, Poland, and Romania.

The core of the performance lies in profitability: the operating profit margin climbed to 12.6% of sales, compared to 8.3% last year. Excluding a one-time insurance compensation of 27 million shekels, operating profit totaled 336 million shekels, an increase of 32%.

While cocoa and coffee prices previously weighed on Strauss, the trend has reversed. The international coffee sector reported an operating profit of 148 million shekels, a 44% increase. In Brazil, the company 3corações recorded an operating profit of 110 million shekels, up 25%, thanks to lower raw material costs. In Central and Eastern Europe, excluding currency effects, revenues rose by 6.4%.

Strauss Israel presented an operating profit of 198 million shekels, a 46% increase, with a profitability rate of 15.2%. The snacks and sweets sector continues its recovery, posting an operating profit of 25 million shekels (excluding insurance compensation) compared to breaking even last year.

Coffee operations in Israel and the water sector returned to growth, after the latter was impacted in the previous quarter by Operation 'Lion's Roar'. The weak point remains China, where the water company HSW recorded a 27% decline in net profit.

Strauss announced a semi-annual dividend of 180 million shekels, reflecting an annual yield of approximately 2.7%. The rating agency Midroog reaffirmed the Aa1.il rating with a stable outlook, while net debt decreased by 16% to 2.5 billion shekels. The debt-to-EBITDA ratio improved from 2.4 to 1.5.

Key risks include commodity price volatility and currency exposure. However, the operational performance demonstrates the effectiveness of the group's global engine.

Shai Babad, President and CEO of the Strauss Group, stated:

"The quarter's results are a testament to Strauss's resilience and the quality of our work. Even in a complex business environment, we managed to significantly improve profitability while continuing to invest in brands and innovation. This is the result of a clear path, execution discipline, and focus on activities where we hold a real advantage."