Strengthening of the shekel boosts Wilifood's profitability, but consumer prices remain high
The strengthening of the shekel against the dollar and euro has significantly boosted the gross profitability of food importer Wilifood. Despite these gains, the company has not lowered consumer prices.
The strengthening of the shekel against the dollar and the euro — the main currencies in which Wilifood purchases its products — has boosted the gross profitability of the food importer, but consumers have been left out of the celebration. Wilifood, controlled by BSD Crown of brothers Zvika and Yossi Williger, which holds 63.68% of its shares, ended the second quarter with sales of 160.5 million shekels, similar to the corresponding quarter last year. The company attributed the stagnation to a decrease in working days due to the timing of the Passover holiday.
Net profit fell by 38.5% to 12.7 million shekels, following a sharp decline in financial income compared to the same period last year. The subsidiary, Wilifood International, announced a dividend distribution of 20 million shekels. Gross profit grew by 21.5% to 53.5 million shekels, with its margin on sales jumping to 33.3% compared to 27.4% in the corresponding quarter last year. The company attributed this jump in profitability to improved purchase prices, driven by favorable exchange rates and a focus on a more profitable product mix.
In this context, it should be noted that although Zvika Williger, the company's chairman, declared in early 2024 that he would not raise prices during the war, Wilifood actually increased prices three weeks later due to rising shipping costs. Since then, despite the strengthening of the shekel, the company has not lowered its consumer prices.
Selling and marketing expenses rose by 18.5% to 19.9 million shekels, driven by higher spending on transportation, advertising, and staffing for the new logistics center. Administrative and general expenses rose by 28% to 8.6 million shekels, following an increase in salary expenses, including share-based payments and management recruitment. Operating profit rose by 21.9% to 25 million shekels, representing a 15.6% margin on sales.
Yossi Williger, the company's CEO, stated:
"The continued improvement in the company's operating profitability reflects the successful implementation of our strategy and the focus on a more profitable product mix. The strengthening of the shekel against the US dollar and the euro contributed to the improvement in the cost structure and our gross profitability during the period."
Williger added that despite earlier delays, construction of the new refrigerated logistics center is progressing steadily. The company expects the center to begin operations in the fourth quarter, which is projected to improve logistics capabilities and reduce operating costs.
