Just before Shufersal (TASE: SAE) CEO Ori Watermann and chairperson Itzhak Abercohen leave Israel’s largest supermarket chain and hand it over to the new controlling shareholders, brothers Shlomi and Yossi Amir, the company has released 2023 financials showing record fourth quarter profits and reduced expenses.
Revenue totaled NIS 15.2 billion in 2023, 3.6% more than in 2022. Same store sales grew by 2.1%.
The company posted a net profit of NIS 323 million in 2023, which compares with a net profit of NIS 2 million in 2022, a year that was affected by a streamlining program. In 2021, the net profit was NIS 393 million. The war that broke out on October 7, 2023 and the rush of purchases of food and other supplies in the weeks that followed led to a record net profit of NIS 133 million in the fourth quarter.
Operating profit for 2023 totaled NIS 707 million, 4.7% of sales turnover. This compares with an operating profit of NIS 283 million in 2022, 1.9% of turnover.
Online sales in 2023 were 17.5% of total sales, down from 19.4% in 2022. The company explains the decline by the ending of the Covid-19 pandemic, and by a reduction in online activity in non-food products.
Shufersal’s own brand accounted for 27% of sales in 2023, which compares with 27.2% in 2022.
The group’s expenses as a proportion of revenue fell by 1.9% in 2023, as it reduced its workforce from 16,545 to 15,800.
Shufersal is examining ways of selling its 49.9% stake in digital wallet PayBox. The other 50.1% is held by Discount Bank.
Revenue from pharmacy chain Be totaled NIS 259 million in the fourth quarter of 2023, up 1.6% in comparison with the corresponding quarter of 2022.
Shufersal announced a dividend distribution of NIS 180 million. Itzhak Abercohen’s compensation cost in 2023 was NIS 8.2 million, and that of Ori Watermann NIS 6.4 million.
Abercohen and Watermann said in a statement today, "We concluded 2023 with strong results reflecting the group’s return to a growth track. We ended the year with growth in revenue to the peak that we reported in 2022 and improvement in all profit metrics, in line with the moves to streamline the company and improve working capital, and as a result the company’s net debt fell to NIS 1.2 billion.
"The fourth quarter was affected by the Swords of Iron war, and was a strong conclusion to the year both in same store sales, with a sharp rise in demand, and in net profit for the quarter, which was a quarterly record for the group.
"2023 was characterized by a technological leap forward, with the launch of the automated dispatch center in Modi’in. We continued to strengthen online and digital infrastructures with the aim of consolidating our lead in that area, while strengthening the synergy with the pharmacy chain Be.
"In accordance with its values and its regular activity in contributing to the community, since the outbreak of war the company has acted to aid and support residents who have been evacuated from their homes, soldiers, and families of hostages, and formulated an immediate aid plan to support farmers and local production."
Published by Globes, Israel business news - en.globes.co.il - on March 27, 2024.
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