American Israeli Paper Mills Ltd. reported its results for the fourth quarter of 2002 and the year ended December 31, 2002. Aggregate group sales in 2002 totaled 2,348.6 million New Israeli Shekels ($495.8 million), compared with NIS 2,416.3 million in 2001 ($510.1 million).
Aggregate operating profit in 2002 totaled NIS136 million, compared with NIS 127.9 million in 2001. Aggregate sales in the fourth quarter of 2002 amounted to NIS595.4 million, compared with NIS589.3 million in the fourth quarter of 2001.
Aggregate operating profit totaled NIS30.3 million ($6.4 million), in the fourth quarter of 2002, similar to the corresponding quarter in 2001. Consolidated sales in 2002 totaled NIS493.0 million, compared with NIS508.1 million in 2001. Operating profit in 2002 totaled NIS 39.4 million, compared with NIS 22.2 million in 2001.
Yaacov Yerushalmi, chairman of the Company's Board of Directors and the Company's chief executive officer, said that the slowdown in Israel's economy grew more severe in 2002. The slowdown in operations, effected by the global economic situation and by the security-related events in Israel, was characterized by a decrease in domestic demand, negative GDP growth and increased unemployment.
The accelerated devaluation during 2002 of the NIS against the US dollar resulted in an increase in the prices of imported goods, but, due to the economic situation in Israel, the reduced demand and the increased competition, it was impossible to adjust the selling prices as warranted by such devaluation. Sales turnover in dollar terms was consequently eroded, despite the quantitative growth in sales in most of the group's operations, while profitability was impaired.
In response to the foregoing economic situation, the group initiated efficiency measures that were intended to deal with the difficult economic environment, while preserving the Company's market shares and the profitability of its various operations, and focusing on its cost base.
These efficiency measures, which encompass all of the group's different operation, included, among others, personnel cutbacks, on both management and operational levels, increased productivity and the creation of a lower cost base, resulting in a greater ability to adjust to market conditions.
The consolidated sales in 2002 were affected, except for the impact of the devaluation and the economic situation in Israel, also by the shutting down of the old tissue paper machine at Molett Nahariya—following the installation of a new household paper machine by H-K, at the Nahariya site—and closing of the Shafir site in Tel Aviv—due to the demands of the Ministry of the Environment. The termination of these operations resulted in a NIS 28.4 million decrease in consolidated sales. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
