Calcalist February 28, 2021
The company that operates the Mahsanei Hashmal and Shekem Electric chains recorded revenues of NIS 711 million in the fourth quarter – the operating profit jumped by 118% to NIS 20.9 million; Online sales on the website, which began operating in the past six months, jumped by 186% to NIS 203 million.
By Orna Yeffet
The corona crisis continues to give a boost to electrical products companies, with sales on a steady upward trend throughout the past year - and the Electra Consumer Products reports render this picture very well. The company controlled by Elco of the Salkind family ended the fourth quarter with a growth of 32.8% in revenue amounting to NIS 71.1.3 million, mainly due to the retail sector.
The segment includes the electricity chains Mahsanei Hashmal and Shekem Electric, where in the past six months the company has also operated a trading site - online sales on its site grew in the fourth quarter of the year by 186% and amounted to NIS 203 million. The company will distribute dividends amounting to NIS 40 million in April 2021.
Electra improved its gross profit in the fourth quarter of 2020 by 38% and it amounted to NIS 165 million, compared to NIS 120 million in the corresponding period last year. Its percentage of the sales increased to 23.2% of the sales turnover, compared to 22.3% in the corresponding period, mainly due to an increase in air conditioner sales which was offset by a decrease in the gross profit margin in the brand trade and a decrease in the gross profit margin in the electricity retail sector. Nevertheless, the gross profit in the electricity retail sector has increased, thanks to the said growth in turnover.
In the electrical consumer goods segment, the company recorded a 13.2% increase in sales in the fourth quarter, amounting to NIS 257 million, compared to NIS 227 million in the corresponding quarter, mainly due to the increase in sales of air conditioners and white electrical appliances. The segment profit for the quarter was the same as for the corresponding quarter and amounted to NIS 4.3 million. After neutralizing a one-time provision for the cessation of marketing of a split air conditioner product line in the amount of NIS 5 million, the segment profit would have been NIS 9 million.
In the electricity retail segment, sales in the fourth quarter amounted to NIS 486 million, compared to NIS 335 million in the corresponding quarter, a jump of 45%. Sales per square meter in the same stores climbed 27.5% to NIS 4,402. The segment profit amounted to NIS 26.7 million, constituting a jump of 86%.
The company's operating profit jumped by 118% in the fourth quarter and amounted to NIS 20.9 million, compared to NIS 9.6 million in the corresponding period last year. Net financing expenses in the quarter rose to NIS 9.3 million, compared to NIS 3.8 million in the corresponding period, an increase resulting from the recording of financing expenses in the quarter in respect of hedging transactions made for 2021.
The bottom line is Electra Consumer Products ended the quarter with a decrease in net profit, which amounted to NIS 10.6 million, compared to NIS 15.8 million in the corresponding quarter, in which the company recorded a net profit from Golan Telecom's discontinued operations (NIS 14.6 million).
The salary cost of Zvika Schwimmer, the company's CEO, was NIS 3.6 million in 2020. In January 2021, his salary was adjusted to NIS 110,000 a month instead of NIS 95,000, and the grant mechanism as well was adjusted, and will amount to 18 salaries. In addition, Schwimmer received a bonus of NIS 330,000 for the year 2020. The salary cost of the two joint CEOs of Mahsanei Hashmal, Yoram Badash and Shmulik Mendzicki, amounted to NIS 7.9 million, each.
On February 21, the company signed a memorandum of understanding with a sports equipment company to purchase 50.01% of its shares in exchange for NIS 85 million, and is conducting talks, at the same time, to purchase shares in Bitan Wines. In addition, the company is holding negotiations to sign a franchise agreement for the Seven Eleven convenience stores. Electra Consumer products is considering splitting the group's retail operations into a separate corporation and bringing in an investor who will hold 20% of the shares.