G. Willi-Food International Reports Its Financial Results for the Third Quarter of 2021

Published: Nov. 30, 2021 at 5:00 AM HST

YAVNE, Israel, Nov. 30, 2021 /PRNewswire/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (the "Company" or "Willi-Food"), a global company that specializes in the development, marketing and international distribution of kosher foods, today announced its unaudited financial results for the third quarter ended September 30, 2021.

G. Willi-Food International Ltd. Logo

Third Quarter Fiscal Year 2021 Highlights

  • Sales decreased by 5.1% year-over-year to NIS 106.3 million (US$ 32.9 million).
  • Gross profit decreased by 13.4% year-over-year to NIS 29.5 million (US$ 9.1 million).
  • Operating profit decreased by 41.7% year-over-year to NIS 8.2 million (US$ 2.5 million).
  • Total financial expense, net NIS 1.6 million (US$ 0.5 million) compared to Total financial income net on third quarter of 2020 of NIS 14.5 million (US$ 5.4 million).
  • Income before taxes decreased by 76.9% year-over-year to NIS 6.6 million (US$ 2.0 million).
  • Net profit decreased by 76.2% year-over-year to NIS 5.2 million (US$ 1.6 million), or 4.9% of sales.
  • Cash and cash equivalents balance of NIS 219.0 million (US$ 67.8 million) as of September 30, 2021.
  • Earnings per share of NIS 0.38 (US$ 0.12).

Management Comment

Zwi Williger & Joseph Williger, Co-Chairmen of Willi-Food, commented: "We are pleased to present third quarter 2021 financial results. The Company experienced a decline in sales, mainly resulting from a decrease in working days in September due to Jewish holidays and due to decline in sales in the food industry as a whole.

"As a result of the Covid-19 pandemic, the world is still experiencing disruptions to international commercial shipping, which has led to an increase in the demand for containers and a significant increase in sea freight and commodity prices which affected the company gross margin.

"Despite the challenging environment, the Company has worked to maintain a high level of sales and positive operational parameters for the third quarter of 2021. The Company's strategy for the near future is to improve commercial conditions with its suppliers and customers, develop new products, enter into new categories with potentially high gross profit margins, improve the visibility of its products in the stores and strengthen its brand, supply chain and sufficient inventory. We intend to work hard to achieve the goals we have set for the Company."

Third Quarter Fiscal 2021 Summary

Sales for the third quarter of 2021 decreased by 5.1% to NIS 106.3 million (US$ 32.9 million) from NIS 111.9 million (US$ 34.7 million) in the third quarter of 2020. The decrease is mainly due to decrease in working days in September 2021 due to Jewish holidays and lower sales in the food industry as a whole.

Gross profit for the third quarter of 2021 decreased by 13.4% to NIS 29.5 million (US$ 9.1 million) compared to NIS 34.0 million (US$ 10.5 million) in the third quarter of 2020. Third quarter gross margin decreased by 13.4% to 27.7% compared to gross margin of 30.4% for the same period in 2020. The decrease in gross profit was mainly due to increase costs of the Company's imported products and due to increases in shipping costs

Selling expenses increased by 9.7% to NIS 15.9 million (US$ 4.9 million) compared to NIS 14.5 million (US$ 4.5 million) in the third quarter of 2020 primarily due to an increase in payroll expenses in the logistics and sales departments and due to an increase in advertising and promotion.

General and administrative expenses decreased by 1.3% to NIS 5.4 million (US$ 1.7 million) compared to NIS 5.5 million (US$ 1.7 million) in the third quarter of 2020.

As a result of the foregoing, operating profit for the third quarter of 2021 decreased by 41.7% to NIS 8.2 million (US$ 2.5 million) compared to NIS 14.0 million (US$ 4.3 million) in the third quarter of 2020.

Financial expense, net totaled NIS 1.6 million (USD$ 0.5 million) compared to Financial income, net of NIS 14.5 million (US$ 4.5 million) in the third quarter of 2020. Financial expense, net for the third quarter of 2021 was comprised mainly of exchange rate differences of NIS 4.3 million (US$ 1.3 million), interest and dividend income from the Company's portfolio of securities in the amount of NIS 1.8 million (US$ 0.6 million) and income from revaluation of the Company's portfolio of securities to fair value in the amount of NIS 1.3 million (US$ 0.4 million).

Income before taxes on income for the third quarter of 2021 was NIS 6.6 million (US$ 2.0 million) compared to income before taxes on income of NIS 28.5 million (US$ 8.8 million) in the third quarter of 2020.

Net profit in the third quarter of 2021 was NIS 5.2 million (US$ 1.6 million), or NIS 0.38 (US$ 0.12) per share, compared to NIS 21.9 million (US$ 6.8 million), or NIS 1.63 (US$ 0.51) per share, in the third quarter of 2020.

Willi-Food ended the third quarter of 2021 with NIS 219.0 million (US$ 67.8 million) in cash and cash equivalents. Net cash from operating activities for the third quarter of 2021 was NIS 38.6 million (US$ 12.0 million). Willi-Food's shareholders' equity as of June 30, 2021 was NIS 568.1 million (US$ 191.0 million).

First Nine Months of Fiscal 2021 Highlights

  • Sales decreased by 2.3% year-over-year to NIS 337.3 million (US$ 104.5 million).
  • Gross profit decreased by 10.8% year-over-year to NIS 102.6 million (US$ 31.8 million).
  • Operating profit decreased by 26.1% year-over-year to NIS 36.9 million (US$ 11.4 million).
  • Total financial income increased by 4,571% year-over-year to NIS 17.6 million (US$ 5.4 million).
  • Income before taxes increased by 8.3% year-over-year to NIS 54.5 million (US$ 16.9 million).
  • Net profit increased by 10.4% to NIS 42.3 million (US$ 13.1 million), or 12.5% of sales.
  • Basic earnings per share of NIS 3.05 (US$ 0.94).

First Nine Months Fiscal 2021 Summary

Sales for the nine-month period ending September 30, 2021 decreased by 2.3% to NIS 337.3 million (US$ 104.5 million) compared to NIS 345.2 million (US$ 106.9 million) in the first nine months of 2020. The decrease in the Company's sales is primarily due to the significant increase in demand for the Company's line of products, especially in retail chains, during the outbreak of Covid 19 in the first quarter of 2020.

Gross profit for the period decreased by 10.8% to NIS 102.6 million (US$ 31.8 million) compared to NIS 115.1 million (US$ 35.6 million) for the first nine-month of 2020. Gross margin for the first nine months of 2021 was 30.4% compared to a gross margin of 33.3% for the same period in 2020. The decrease in gross profit was mainly due to increased shipping costs.

Operating profit for the first nine month of 2021 decreased by 26.1% to NIS 36.9 million (US$ 11.4 million) from NIS 49.9 million (US$ 15.0 million) reported in the comparable period of last year primarily due to the decrease of gross profit.

Financial income, net totaled NIS 17.6 million (USD$ 5.4 million) compared to Financial income, net of NIS 0.4 million (US$ 0.1 million) in the first nine-month of 2020. Financial income, net for the first nine-month of 2021 comprised mainly from income from revaluation of the Company's portfolio of securities to fair value in the amount of NIS 13.3 million (US$ 4.1 million), interest and dividend income from the Company's portfolio of securities in the amount of NIS 8.0 million (US$ 2.5 million), minus expenses from exchange rate differences in the amount of NIS 2.7 million (US$ 0.8 million) and other finance expenses in the amount of NIS 1 million (US$ 0.3 million).

Income before taxes for the first nine months of 2021 increased by 8.3% to NIS 54.5 million (US$ 16.9 million) compared to NIS 50.3 million (US$ 15.6 million) in the first nine months of 2020.

Net profit for the first nine months of 2021 increased by 10.4% to NIS 42.3 million (US$ 13.1 million), or NIS 3.05 (US$ 0.94) per share, from NIS 38.3 million (US$ 11.9 million), or NIS 2.88 (US$ 0.89) per share, in the first nine months of 2020.

NOTE A: NIS to US$ exchange rate used for convenience only

The convenience translation of New Israeli Shekels (NIS) into U.S. dollars was made at the rate of exchange prevailing on September 30, 2021, U.S. $1.00 equals NIS 3.229. The translation was made solely for the convenience of the reader.

NOTE B: IFRS

The Company's consolidated financial results for the three-month and nine-month period ended September 30, 2021 are presented in accordance with International Financial Reporting Standards ("IFRS").

About G. Willi-Food International Ltd.

G. Willi-Food International Ltd. (http://www.willi-food.com) is an Israeli-based company specializing in high-quality, great-tasting kosher food products. Willi-Food is engaged directly and through its subsidiaries in the design, import, marketing and distribution of over 600 food products worldwide. As one of Israel's leading food importers, Willi-Food markets and sells its food products to over 1,600 customers and 3,200 selling points in Israel and around the world including large retail and private supermarket chains, wholesalers and institutional consumers. The Company's operating divisions include Willi-Food in Israel and Euro Europian Dairies (Gold Frost), a wholly owned subsidiary who designs, develops and distributes branded kosher, dairy-food products.

FORWARD LOOKING STATEMENT

This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding trends, demand for our products and expected sales, operating results, and earnings. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. These risks and other factors include but are not limited to: impacts of the ongoing COVID-19 pandemic; monetary risks including changes in marketable securities or changes in currency exchange rates- especially the NIS/U.S. Dollar exchange rate, payment default by any of our major clients, the loss of one of more of our key personnel, changes in laws and regulations, including those relating to the food distribution industry, and inability to meet and maintain regulatory qualifications and approvals for our products, termination of arrangements with our suppliers, loss of one or more of our principal clients, increase or decrease in global purchase prices of food products, increasing levels of competition in Israel and other markets in which we do business, changes in economic conditions in Israel, including in particular economic conditions in the Company's core markets, our inability to accurately predict consumption of our products and changes in consumer preferences, our inability to protect our intellectual property rights, our inability to successfully integrate our recent acquisitions, insurance coverage not sufficient enough to cover losses of product liability claims, risks associated with product liability claims and risks associated with the start of credit extension activity. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading "Risk Factors" in the Company's Annual Report on Form 20-F for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 25, 2021. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information contained in this press release.

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)



September 30,

December 31,

September 30,

December 31,


2 0 2 1

2 0 2 0

2 0 2 0

2 0 2 1

2 0 2 0

2 0 2 0


NIS

US dollars (*)


(in thousands)

ASSETS














Current assets







Cash and cash equivalents

218,980

214,408

201,822

67,817

66,401

62,503

Financial assets carried at fair value
  through profit or loss

150,153

150,197

154,700

46,501

46,515

47,910

Trade receivables

131,779

136,748

131,301

40,811

42,350

40,663

Loans to others

-

3,650

18,707

-

1,130

5,793

Other receivables and prepaid expenses

3,969

3,646

6,667

1,229

1,129

2,065

Inventories

48,115

56,677

59,514

14,901

17,553

18,431

Current tax assets

4,599

435

3,965

1,424

135

1,228

Total current assets

557,595

565,761

576,676

172,683

175,213

178,593








Non-current assets







Property, plant and equipment

87,868

83,394

83,105

27,212

25,827

25,737

Less -Accumulated depreciation

49,563

46,675

46,460

15,349

14,455

14,388


38,305

36,719

36,645

11,863

11,372

11,349








Right of use asset

4,695

3,208

2,866

1,454

993

888

Financial assets carried at fair value
  through profit or loss

29,374

9,273

13,700

9,097

2,872

4,242

Goodwill

36

36

36

11

11

11

Deferred taxes

-

1,047

-

-

324

-

Total non-current assets

72,410

50,283

53,247

22,425

15,572

16,490









630,005

616,044

629,923

195,108

190,785

195,083

EQUITY AND LIABILITIES














Current liabilities







Current maturities of lease liabilities

1,372

1,520

1,393

425

471

431

Trade payables

22,707

25,325

23,474

7,032

7,843

7,270

Employees Benefits

3,411

3,114

3,437

1,056

964

1,064

Other payables and accrued expenses

25,240

10,509

11,611

7,817

3,255

3,596

Total current liabilities

52,730

40,468

39,915

16,330

12,533

12,361








Non-current liabilities







Lease liabilities

3,466

1,806

1,592

1,073

559

493

Deferred taxes

3,823

-

768

1,184

-

238

Retirement benefit obligation

1,934

1,628

1,905

599

504

590

Total non-current liabilities

9,223

3,434

4,265

2,856

1,063

1,321

Shareholders' equity 







Share capital

1,490

1,490

1,490

461

461

461

Additional paid in capital

170,760

170,760

170,760

52,883

52,883

52,883

Capital fund

247

247

247

76

76

76

Treasury shares

(628)

(628)

(628)

(194)

(194)

(194)

Remeasurement of the net liability in
  respect of defined benefit

(1,322)

(1,029)

(1,322)

(409)

(319)

(409)

Retained earnings

397,505

401,302

415,196

123,105

124,282

128,584

Equity attributable to owners of the
  Company

568,052

572,142

585,743

175,922

177,189

181,401









630,005

616,044

629,923

195,108

190,785

195,083

(*)        Convenience translation into U.S. dollars.

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



Nine months

Three months

Nine months


ended

ended

ended


September 30,

September 30,

September 30,


2 0 2 1

2 0 2 0

2 0 2 1

2 0 2 0

2 0 2 1

2 0 2 0


NIS

US dollars (*)


In thousands (except per share and share data)








Sales

337,325

345,189

106,268

111,933

104,467

106,903

Cost of sales

234,705

230,133

76,808

77,902

72,687

71,271








Gross profit

102,620

115,056

29,460

34,031

31,780

35,632








Operating costs and expenses:







Selling expenses

48,706

47,344

15,935

14,522

15,084

14,662

General and administrative expenses

17,179

17,823

5,415

5,483

5,320

5,520

Other income

200

58

63

-

62

18















Total operating expenses

65,685

65,109

21,287

20,005

20,342

20,164








Operating profit

36,935

49,947

8,173

14,026

11,438

15,468








Financial income

21,390

3,689

3,015

14,704

6,624

1,142

Financial expense

3,825

3,313

4,602

231

1,184

1,026








Total financial income (expense)

17,565

376

(1,587)

14,473

5,440

116















Income before taxes on income

54,500

50,323

6,586

28,499

16,878

15,584

Taxes on income

12,216

12,007

1,372

6,582

3,783

3,718








Profit for the period

42,284

38,316

5,214

21,917

13,095

11,866








Earnings per share:







Basic/ diluted earnings per share

3.05

2.88

0.38

1.63

0.94

0.89








Shares used in computation of
basic/diluted EPS

13,867,017

13,289,239

13,867,017

13,433,684

13,867,017

13,433,684

Actual number of shares

13,867,017

13,867,017

13,867,017

13,867,017

13,867,017

13,867,017








(*)        Convenience translation into U.S. dollars.

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



Nine months

Three months

Nine months


ended

ended

ended


September 30,

September 30,

September 30,


2 0 2 1

2 0 2 0

2 0 2 1

2 0 2 0

2 0 2 1

2 0 2 0


NIS

US dollars (*)


(in thousands)








CASH FLOWS - OPERATING ACTIVITIES







Profit from continuing operations

42,284

38,316

5,214

21,917

13,095

11,866

Adjustments to reconcile net profit to net cash used to
 continuing operating activities (Appendix A)

19,524

21,127 (**)

33,372

5,977 (**)

6,046

6,543








Net cash used in continuing operating activities

61,808

59,443

38,586

27,894

19,141

18,409















CASH FLOWS - INVESTING ACTIVITIES







Acquisition of property plant and equipment

(4,763)

(1,991)

(1,130)

(1,256)

(1,475)

(617)

Proceeds from sale (purchase) of marketable securities, net

2,174

(20,669)

(12,987)

 

(23,195)

673

(6,400)

Proceeds from sale of property plant and equipment

200

58

63

-

62

18

Proceeds from loans granted to others

18,707

14,000

-

-

5,794

4,336








Net cash used in (used to) continuing investing
  activities

16,318

(8,602)

(14,054)

(24,451)

5,054

(2,663)















CASH FLOWS - FINANCING ACTIVITIES







Lease liability payments

(1,605)

(1,334)

(601)

(507)

(497)

(413)

Dividend

(59,975)

-

(59,975)

-

(18,574)

-

Shares issue

-

42,471

-

42,471

-

13,153








Net cash used in (used to) continuing financing 
  activities

(61,580)

41,137

(60,576)

41,964

(19,071)

12,740















Increase (decrease) in cash and cash equivalents

16,546

91,978 (**)

(36,044)

45,407 (**)

5,124

28,486








Cash and cash equivalents at the beginning
  of the financial period

201,822

121,860

255,510

168,689

62,503

37,739








Exchange losses (profit) on cash and cash
  equivalents

612

570 (**)

(486)

312 (**)

190

176















Cash and cash equivalents of the end of the
  financial year

218,980

214,408

218,980

214,408

67,817

66,401








(*)        Convenience Translation into U.S. Dollars.

(**)     Reclassified

G. WILLI-FOOD INTERNATIONAL LTD.

APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


CASH FLOWS - OPERATING ACTIVITIES:


A.         Adjustments to reconcile net profit to net cash from operating activities:



Nine months

Three months

Nine months


ended

ended

ended


September 30,

September 30,

September 30,


2 0 2 1

2 0 2 0

2 0 2 1

2 0 2 0

2 0 2 1

2 0 2 0


NIS

US dollars (*)


(in thousands)








Decrease (increase) in deferred
  income taxes

3,055

(229)

660

3,153

946

(71)

Unrealized loss (gain) on marketable
  securities

(13,301)

2,739

(1,182)

(13,532)

(4,119)

848

Depreciation and amortization

4,732

4,221

1,631

1,470

1,465

1,308

Capital gain on disposal of property
  plant and equipment

(200)

(58)

(63)

-

(62)

(18)

Exchange gain (losses) on cash and
  cash equivalents

(612)

(**) (570)

486

 (**) (312)

(190)

(176)








Changes in assets and liabilities:







Increase (decrease) in trade
  receivables and other receivables

1,586

1,570

4,624

6,271

491

486

Decrease (increase) in inventories

11,399

14,871

10,348

4,585

3,530

4,605

Increase (decrease) in trade and other
  payables, and other current liabilities

12,865

(1,417)

16,868

4,342

3,985

(439)

Net cash flows from operating activities

19,524

21,127

33,372

5,977

6,046

6,543








B.         Significant non-cash transactions:



Nine months

Three months

Nine months


ended

ended

ended


September 30,

September 30,

September 30,


2 0 2 1

2 0 2 0

2 0 2 1

2 0 2 0

2 0 2 1

2 0 2 0


NIS

US dollars (*)


(in thousands)

Supplemental cash flow information:







Income tax paid

13,597

16,389

3,839

5,329

4,211

5,076

(*)        Convenience Translation into U.S. Dollars.

(**)     Reclassified

This information is intended to be reviewed in conjunction with the Company's filings with the Securities and Exchange Commission.

Company Contact:

G. Willi - Food International Ltd.
Yitschak Barabi, Chief Financial Officer
(+972) 8-932-1000
itsik.b@willi-food.co.il

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SOURCE G. Willi-Food International Ltd.

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