Frutarom Q2 Sales Jump 27%

Flavors and ingredients company Frutarom has recorded a 26.8% jump in second-quarter sales to $91.7 million, boosted by growth in its flavors division and its fine ingredients unit’s core activity products.

The company, which supplies the food, beverage, flavor, fragrance and cosmetic industries, said its strong sales performance was also aided by the integration of Acatris’s activity, which was acquired and consolidated as of October 2006, the merger of Belmay and Jupiter, which were acquired and consolidated with the Frutarom Group’s global activity as of April 2007, and the utilization of the synergy and cross selling opportunities between Frutarom’s divisions, existing customers and products and those added through the acquisitions made in recent years.

Despite the growth in sales the Israel-based company posted a drop in second-quarter profit to $13.5 million compared with $8.6 million in the same quarter last year. Net margin reached 6.5% compared with 11.9% in the same quarter of 2006. Excluding one-time expenses and income, net profit for the second quarter of 2007 reached US$ 6.7 million compared with US$ 6.2 million for the second quarter in 2006.

Commenting on the results, Ori Yehudai, president and CEO, said: “In the second quarter of 2007, Frutarom achieved accelerated organic growth in its core activities in line with the business strategy we have been implementing in recent years. This growth comes, among others, from utilizing the considerable synergy from our acquisitions in the last few years and it will grow as we realize the synergy of the acquisitions made this year.”

Mr Yehudai added: “We are working determinedly in order to complete within several months the integration of Belmay and Jupiter with Frutarom UK’s existing activity at the Belmay site in order to achieve the greatest possible operational efficiency and savings, which are estimated at over $3 million annually. Similarly, upon completing the acquisition of Raychan and Adumim we will act to merge their activity with the activity at our sites in Haifa and Acco.

“Frutarom continues working to implement the company’s strategy for rapid growth and to utilize the synergy and many cross selling opportunities in the acquisitions of recent years, which will help to sustain organic growth in Frutarom’s core activities. Frutarom invests considerable resources in identifying and executing additional strategic acquisitions, mainly in countries and markets where it has substantial activity.”