Israeli foodmaker Strauss says U.S. delays may hit 2022 results
6:30 am Wednesday, April 06th, 2022
(Fixes typographical error in “its”, paragraph 1)
JERUSALEM (Reuters) – Israeli foodmaker Strauss Group on Wednesday warned that its 2022 results could be further hurt by manufacturing delays at its Sabra Dipping Co site in the United States.
“The company anticipates further negative impact on Sabra’s operating results in 2022, including in Sabra’s sales volumes and profit, which may also impact the company’s results,” Strauss said in a statement.
“Currently it is not possible to estimate the influence on Sabra’s or the company’s results.”
Strauss, a maker of snacks, fresh food and coffee with an Israeli market share of 12.4%, last month said it posted 2021 profit of 639 million shekels ($199 million) on a 7.4% rise in revenue to 8.7 billion shekels.
Sabra, its international dips and spreads joint venture with Pepsico, recorded in the same period a 42% drop in operating profit to $11 million due to an increase in manufacturing costs as a result of the partial shutdown of the plant in December as well as increased labour costs.
After an inspection and warning letter from the U.S. Food and Drug Administration in December, Strauss had said it started an adjustment plan at Sabra’s plant in Virginia bringing a temporary reduction in production capacity and manufacturing costs.
In February, Strauss had said it expected a return to full capacity in the second quarter of 2022.
But it updated that timeline on Wednesday, blaming further delay on manufacturing disruptions in the past few days.
“There will be substantial delays and changes in scope and timing to the adjustment plan,” it said.
($1 = 3.2176 shekels)
(Reporting by Steven Scheer; Editing by Alexander Smith)
