Shufersal: Profit of NIS 387 million in 2020 – the capital market

The food retailer

Shufersal
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Reports its financial results for the fourth quarter of 2020 and for the entire year: Revenues in the quarter amounted to NIS 3.9 billion – growth of 15.9% over the corresponding quarter – and net income of NIS 120 million – 2.6% higher than in the corresponding period last year . For the entire year, revenues amounted to NIS 15.2 billion and net profit to NIS 387 million, an increase of 14% and 44%, respectively, compared with data of NIS 13.3 billion and NIS 268 million in 2019. The company will distribute a dividend in the total amount of NIS 140 million.

Gross profitability also rose slightly – NIS 1 billion in the fourth quarter with a profitability rate of 27%, compared with NIS 898 million in the corresponding quarter and a gross profit margin of 26.9%. On the other hand, for the entire year, the gross profit margin decreased slightly: a gross profit of NIS 4 billion and a gross profit margin of 26.5%, compared with NIS 3.6 billion in 2019 and a gross profit margin of 27%. The company explained the decrease in lower prices and an increase in the online sales rate.

Operating profit for the quarter amounted to NIS 202 million, which constitutes about 5.2% of turnover, compared with NIS 116 million in the corresponding quarter, which accounted for about 3.5% of turnover at the time. For the entire year, a record operating profit of NIS 718 million was recorded, which is about 4.7% of total revenues, compared with NIS 521 million, which constituted about 3.9% of revenues in the corresponding period last year.

The increase in revenue is mainly attributable to growth in the sales floor in Shufersal branches, the Be chain and the online channel. Thus, sales in the same branches increased by about 13.4% this year and by about 15.4% in the fourth quarter compared to the corresponding period last year. Shufersal notes that after neutralizing one-time tax revenues in 2019, the annual registered net profit increased by about 80% this year, and this quarter increased by about 87%. As for the online activity, it recorded quarterly revenues of NIS 805 million and their share of total revenues increased to 21.3% compared to 15.6% in the corresponding quarter.

In Be, revenues increased by 15% and amounted to NIS 815 million in the fourth quarter, compared with NIS 708 million last year. Sales of Be’s identical branches increased by 13.8%. The Pharm operating chain’s annual operating loss was reduced by 73% to NIS 19 million, compared with NIS 70 million in 2019. Be also reached an operating balance in the fourth quarter of 2020, compared to an operating loss in the corresponding quarter. The shift to balance is mainly explained by an increase in revenue along with streamlining and deepening synergy with the group.

Yaki Vadmani, Chairman of the Board of Shufersal“Our private label continues to strengthen and expand, and this year reached sales of NIS 3.9 billion, which constitutes about 25.8% of the company’s total sales. These days, the establishment of automated collection and distribution centers that will serve the online activity that is expected to continue to grow.”

Shufersal recently announced that after it began offering consumer loans in the past year, it will send another arm to the finance sector in a joint project with Discount. The parties will set up a digital wallet that will also be an aggregator of various financial products of all banks. In addition to the competition that awaits Shufersal in this sector against big players like Beat Hapoalim, it has just been announced that Diplomat (which is on its way to the IPO), Leiman Schlissl and Guri will set up a venture to distribute goods to containers and explosives. The venture will compete with Shufersal’s regional cash and curry stores, from which some small food retailers purchase goods that are unprofitable for large suppliers to transport to them.