PR Newswire | Aug 16, 2021 06:01AM EDT

in Net Profit in Second Quarter 2021 Compared to Same Period 2020

08/16 05:00 CDT

G. Willi-Food International Reports 9.8% Increase in Sales, and 9.0% Increase in Net Profit in Second Quarter 2021 Compared to Same Period 2020NET PROFIT UP 126.1% IN FIRST HALF 2021 COMPARED TO SAME PERIOD 2020 YAVNE, Israel, Aug. 16, 2021

YAVNE, Israel, Aug. 16, 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 second quarter ended June 30, 2021.

Second Quarter Fiscal Year2021Highlights

* Sales increased by 9.8% year-over-year to NIS 114.3 million (US$ 35.1 million). * Gross profit decreased by 6.5% year-over-year to NIS 36.9 million (US$ 11.3 million). * Operating profit decreased by 18.8% year-over-year to NIS 13.7 million (US$ 4.2 million). * Total financial income increased by 129.0% year-over-year to NIS 7.6 million (US$ 2.3 million). * Income before taxes increased by 5.6% year-over-year to NIS 21.4 million (US$ 6.6 million). * Net profit increased by 9.0% year-over-year to NIS 16.6 million (US$ 5.1 million), or 14.5% of sales. * Cash and securities balance of NIS 403.0 million (US$ 123.6 million) as of June 30, 2021. * Earnings per share of NIS 1.2 (US$ 0.37).

Management Comment

Zwi Williger & Joseph Williger, Co-Chairmen of Willi-Food, commented: "We are pleased to present strong second quarter 2021 financial results, which show stable growth in the Company's sales and an increase in net profit compared to the same period in 2020. As a result of the Covid-19 pandemic, the world is still experiencing a crisis that is reflecting among other things, in 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.

"Despite the challenging environment, the Company has succeeded to maintain a high level of sales and operational parametres for the second quarter of 2021. The Company's strategy for the near future is to develop new products, enter into new categories with potential of high gross profit margins, improve the visibility of its products in the stores and strengthen its brand, supply chain and sufficient inventory. We believe that our strong performance in the second quarter was driven from our pursuit of these goals. We intend to continue to work to further strengthen the Company's supply chain and product portfolio and maintain sufficient inventory levels in the future to continue to improve our results."

Non-bank credit business activity

After three years in the field of the "non-bank credit business", in light of lack of the company activity in this field the board of directors has decided to terminate this activity and focus only on the Company's core business of developing, marketing and distributing kosher foods.

Second Quarter Fiscal 2021 Summary

Sales for the second quarter of 2021 increased by 9.8% to NIS 114.3 million (US$ 35.1 million) from NIS 104.2 million (US$ 31.9 million) recorded in the second quarter of 2020. Revenues increased primarily due to a redirection of resources in favor of sales, increasing the variety of the Company's products, improved inventory management and improving the presence of the Company's line of products on its customers shelves.

Gross profit for the second quarter of 2021 decreased by 6.5% to NIS 36.9 million (US$ 11.3 million) compared to NIS 39.5 million (US$ 12.1 million) recorded in the second quarter of 2020. Second quarter gross margin decreased by 14.8% to 32.3% compared to gross margin of 37.9% for the same period in 2020. The decrease in gross profit was mainly due to increase costs of the Company's imported products, increased shipping costs and one-time credits received from suppliers in the second quarter of 2020.

Selling expenses increased by 7.5% to NIS 17.4 million (US$ 5.3 million) compared to NIS 16.2 million (US$ 5.0 million) in the second quarter of 2020 primarily due to an increase in payroll expenses in the logistics and sales departments and an increase of transportation of products to the Company's customers to support sales growth.

General and administrative expenses decreased by 9.0% to NIS 5.9 million (US$ 1.8 million) compared to NIS 6.5 million (US$ 2.0 million) in the second quarter of 2020.

As a result of the foregoing, operating profit for the second quarter of 2021 decreased by 18.8% to NIS 13.7 million (US$ 4.2 million) compared to NIS 16.9 million (US$ 5.2 million) in the second quarter of 2020.

Financial income, net totaled NIS 7.6 million (USD$ 2.3 million) compared to Financial income, net of NIS 3.3 million (US$ 1.0 million) in the second quarter of 2020. Financial income, net for the second quarter of 2021 comprised mainly of interest and dividend income from the Company's portfolio of securities in the amount of NIS 4.7 million (US$ 1.4 million), income from revaluation of the Company's portfolio of securities to fair value in the amount of NIS 3.3 million (US$ 1.0 million) and management fee of the Company's portfolio of securities expenses in the amount of NIS 0.4 million (US$ 0.1 million).

Income before taxes on income for the second quarter of 2021 was NIS 21.4 million (US$ 6.6 million) compared to income before taxes on income of NIS 20.2 million (US$ 6.2 million) in the second quarter of 2020.

Net profit in the second quarter of 2021 was NIS 16.6 million (US$ 5.1 million), or NIS 1.2(US$ 0.37) per share, compared to NIS 15.2 million (US$ 4.7 million), or NIS 1.15(US$ 0.35) per share, recorded in the second quarter of 2020.

Willi-Food ended the second quarter of 2021 with NIS 403.0 million (US$ 123.6 million) in cash and securities. Net cash from operating activities for the second quarter of 2021 was NIS 19.0 million (US$ 5.8 million). Willi-Food's shareholders' equity at the end of June 2021 was NIS 622.8 million (US$ 191.0 million).

First Half Fiscal 2021 Highlights

* Sales decreased by 0.9% year-over-year to NIS 231.1 million (US$ 70.9 million). * Gross profit decreased by 9.7% year-over-year to NIS 73.2 million (US$ 22.4 million). * Operating profit decreased by 19.9% year-over-year to NIS 28.8 million (US$ 8.8 million). * Total financial income increased by 235.9% year-over-year to NIS 19.2 million (US$ 5.9 million). * Income before taxes increased by 119.6% year-over-year to NIS 47.9 million (US$ 14.7 million). * Net profit increased by 126.1% to NIS 37.1 million (US$ 11.4 million), or 16% of sales. * Basic earnings per share of NIS 2.67 (US$ 0.82).

First Half Fiscal 2021 Summary

Sales for the six-month period ending June 30, 2021 decreased by 0.9% to NIS 231.1 million (US$ 70.9 million) compared to sales of NIS 233.3 million (US$ 71.6 million) in the first half of 2020. The decrease in the Company's sales are primarily due to the outbreak of Covid 19 in the first quarter of 2020 which led to significant increase demand for the Company's line of products, especially in the retail chains.

Gross profit for the period decreased by 9.7% to NIS 73.2 million (US$ 22.4 million) compared to gross profit of NIS 81.0 million (US$ 24.9 million) for the first half of 2020. First half 2021 gross margin was 31.7% compared to a gross margin of 34.7% for the same period in 2020. The decrease in gross profit was mainly due to increase costs of the Company's imported products, increase in shipping costs and one time credits received from suppliers.

Operating profit for the first half of 2021 decreased by 19.9% to NIS 28.8 million (US$ 8.8 million) from NIS 35.9 million (US$ 11.0 million) reported in the comparable period of last year primarily due to the decrease of gross profit.

Financial income, net totaled NIS 19.2 million (USD$ 5.9 million) compared to Financial expense, net of NIS 14.1 million (US$ 4.3 million) in the first half of 2020. Financial income, net for the first half of 2021 comprised mainly from interest and dividend income from the Company's portfolio of securities in the amount of NIS 6.3 million (US$ 1.9 million), income from revaluation of the Company's portfolio of securities to fair value in the amount of NIS 11.9 million (US$ 3.6 million) and management fee of the Company's portfolio of securities expenses in the amount of NIS 0.5 million (US$ 0.1 million).

Financial expenses in the first half of 2021 resulted mainly from the outbreak of COVID-19 pandemic which led to capital markets sharp declines and, as a result, the Company suffered a decline in its portfolio of securities.

Income before taxes for the first half 2021 increased by 119.6% to NIS 47.9 million (US$ 14.7 million) compared to NIS 21.8 million (US$ 6.7 million) recorded in the first half of 2020.

Net profit for the first half of 2021 increased by 126.1% to NIS 37.1 million (US$ 11.4 million), or NIS 2.67(US$ 0.82) per share, from NIS 16.4 million (US$ 5.0 million), or NIS 1.24(US$ 0.38) per share, recorded in the first half 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 June 30, 2021, U.S. $1.00 equals NIS 3.26. 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 six-month period ended June 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 1,250 customers and 2,500 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: 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

June 30, December 31 June 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 255,510 168,689 201,822 78,377 51,745 61,909

Financial assets carried at fair value 147,442 113,468 154,700 45,228 34,806 47,454 through profit or loss

Trade receivables 133,369 140,581 131,301 40,911 43,123 40,276

Loans to others - 3,650 18,707 - 1,120 5,738

Other receivables and prepaid expenses 6,268 6,516 6,667 1,923 1,999 2,045

Inventories 58,463 61,262 59,514 17,933 18,792 18,257

Current tax assets 5,334 - 3,965 1,636 - 1,216

Total current assets 606,386 494,166 576,676 186,008 151,585 176,895

Non-current assets

Property, plant and equipment 86,737 82,138 83,105 26,606 25,196 25,492

Less -Accumulated depreciation 48,538 45,723 46,460 14,889 14,026 14,251

38,199 36,415 36,645 11,717 11,170 11,241

Right of use asset 5,155 3,382 2,866 1,581 1,037 879

Financial assets carried at fair value 17,916 9,273 13,700 5,496 2,845 4,202 through profit or loss

Goodwill 36 36 36 11 11 11

Deferred taxes - 4,200 - - 1,288 -

Total non-current assets 61,306 53,306 53,247 18,805 16,351 16,333

667,692 547,472 629,923 204,813 167,936 193,228

EQUITY AND LIABILITIES

Current liabilities

Current maturities of lease 1,516 1,593 1,393 465 489 427liabilities

Trade payables 21,256 20,049 23,474 6,520 6,150 7,201

Employees Benefits 3,816 3,410 3,437 1,171 1,046 1,054

Current tax liabilities - 1,448 - - 444 -

Other payables and accrued expenses 9,480 9,728 11,611 2,908 2,984 3,562

Total current liabilities 36,068 36,228 39,915 11,064 11,113 12,244

Non-current liabilities

Lease liabilities 3,776 1,896 1,592 1,158 581 488

Deferred taxes 3,163 - 768 970 - 236

Retirement benefit obligation 1,872 1,596 1,905 574 490 584

Total non-current liabilities 8,811 3,492 4,265 2,702 1,071 1,308

Shareholders' equity

Share capital 1,490 1,425 1,490 457 437 457

Additional paid in capital 170,760 128,354 170,760 52,380 39,372 52,380

Capital fund 247 247 247 76 76 76

Treasury shares (628) (628) (628) (193) (193) (193)

Remeasurement of the net liability in (1,322) (1,029) (1,322) (406) (316) (406) respect of defined benefit

Retained earnings 452,266 379,383 415,196 138,733 116,376 127,362

Equity attributable to owners of the 622,813 507,752 585,743 191,047 155,752 179,676 Company

667,692 547,472 629,923 204,813 167,936 193,228

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

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Six months Three months Six months

ended ended ended

June 30, June 30, June 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 231,057 233,255 114,347 104,152 70,876 71,551

Cost of sales 157,897 152,232 77,422 64,651 48,435 46,697

Gross profit 73,160 81,023 36,925 39,501 22,441 24,854

Operating costs and expenses:

Selling expenses 32,771 32,822 17,428 16,205 10,052 10,068

General and administrative expenses 11,764 12,340 5,880 6,464 3,609 3,785

Other income 137 58 100 58 42 18

Total operating expenses 44,398 45,104 23,208 22,611 13,619 13,835

Operating profit 28,762 35,919 13,717 16,890 8,822 11,019

Financial income 19,910 2,580 8,183 3,743 6,107 791

Financial expense (758) (16,677) (537) (404) (232) (5,116)

Total financial income (expense) 19,152 (14,097) 7,646 3,339 5,875 (4,325)

Income before taxes on income 47,914 21,822 21,363 20,229 14,697 6,694

Taxes on income (10,844) (5,425) (4,774) (5,015) (3,326) (1,664)

Profit for the period 37,070 16,397 16,589 15,214 11,371 5,030

Earnings per share:

Basic earnings per share 2.67 1.24 1.2 1.15 0.82 0.38

Diluted earnings per share 2.55 1.24 1.14 1.15 0.78 0.38

Shares used in computation of 13,867,017 13,217,017 13,867,017 13,217,017 13,867,017 13,217,017 basic EPS

Shares used in computation of 14,517,017 13,217,017 14,517,017 13,217,017 14,517,017 13,217,017 diluted EPS

Actual number of shares 13,867,017 13,217,017 13,867,017 13,217,017 13,867,017 13,217,017

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

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months Three months Six months

ended ended ended

June 30, June 30, June 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 37,070 16,397 16,589 15,214 11,371 5,030

Adjustments to reconcile net profit to net cash used to (used in) continuing operating activities (13,848) (**)15,151 2,402 (**)8,800 (4,248) 4,647 (Appendix A)

Net cash used in continuing operating activities 23,222 31,548 18,991 24,014 7,123 9,677

CASH FLOWS - INVESTING ACTIVITIES

Acquisition of property plant and equipment (3,633) (736) (2,289) (374) (1,114) (225)

Proceeds from sale (purchase) of marketable 15,161 2,528 8,365 10,528 4,651 775 securities, net

Proceeds from sale of property plant and equipment 137 58 100 58 42 18

Proceeds from loans granted to others 18,707 14,000 11,215 14,000 5,738 4,295

Net cash used in (used to) continuing investing 30,372 15,850 17,391 24,212 9,317 4,863 activities

CASH FLOWS - FINANCING ACTIVITIES

Lease liability payments (1,004) (828) (532) (404) (308) (254)

Net cash used in continuing financing activities (1,004) (828) (532) (404) (308) (254)

Increase (decrease) in cash and cash equivalents 52,590 (**)46,570 35,850 (**)47,822 16,132 14,286

Cash and cash equivalents at the beginning of 201,822 121,860 218,808 121,040 61,909 37,380 the financial period

Exchange losses on cash and cash equivalents 1,098 (**)259 852 (**)(173) 336 79

Cash and cash equivalents of the end of the 255,510 168,689 255,510 168,689 78,377 51,745 financial year

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

(**) Reclassified

G. WILLI-FOOD INTERNATIONAL LTD.

APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS - OPERATING ACTIVITIES:

A. Adjustments to reconcile net profit to net cash from operatingactivities:

Six months Three months Six months

ended ended ended

June 30, June 30, June 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 2,395 (3,382) 1,073 901 735 (1,037) income taxes

Unrealized loss (gain) on marketable (12,119) 16,272 (3,276) (2,433) (3,717) 4,991 securities

Depreciation and amortization 3,101 2,751 1,622 1,398 950 844

Capital gain on disposal of property (137) (58) (100) (58) (42) (18) plant and equipment

Exchange losses on cash and cash (1,098) (**) (852) (**) (336) (79) equivalents (259) 173

Changes in assets and liabilities:

Increase (decrease) in trade (3,038) (4,700) 8,276 19,991 (932) (1,443) receivables and other receivables

Decrease (increase) in inventories 1,051 10,286 3,888 (5,271) 322 3,155

Increase (decrease) in trade and other (4,003) (5,759) (8,229) (5,901) (1,228) (1,766) payables, and other current liabilities

Net cash flows from operating (13,848) 15,151 2,402 8,800 (4,248) 4,647 activities

B. Significant non-cash transactions:

Six months Three months Six months

ended ended ended

June 30, June 30, June 30,

2 0 21 2 0 20 2 0 21 2 0 20 2 0 21 2 0 20

NIS US dollars (*)

(in thousands)

Supplemental cash flow information:

Income tax paid 9,758 11,060 4,866 4,580 2,993 3,393

(*) 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

View original content: https://www.prnewswire.com/news-releases/g-willi-food-international-reports-9-8-increase-in-sales-and-9-0-increase-in-net-profit-in-second-quarter-2021-compared-to-same-period-2020--301355668.html

SOURCE G. Willi-Food International Ltd.