Thursday, Israel-based food retailer Blue Square - Israel Ltd. (BSI) reported a decline in third quarter earnings, hurt primarily by higher financing expenses. Same-store sales increased 0.6% during the quarter.
Net profit attributable to shareholders was NIS 6.5 million, or US$1.9 million, compared with NIS 57.35 million in the prior-year quarter. On a per American Depository Share, or ADS, basis, earnings were NIS 0.15 per ADS, or US$0.04 per ADS. The company attributed the reduction in net income primarily to increase in its financing expenses.
Net financial expenses for the quarter were NIS 50.1 million, or US$14.7 million, compared with net financial income of NIS 1.9 million in the prior-year period.
Financial expenses were impacted by the decrease in the value of financial instruments whose changes in value were recorded as a financial expense of NIS 7.0 million, or US$2.0 million, during the current quarter compared with financial income of NIS 26.0 million in the prior-year quarter. In addition, the company said, total financial debt was significantly higher at the end of the third quarter of 2008 as compared to its balance at the end of the corresponding period last year.
Quarterly revenues grew by 6.2% to NIS 1.94 billion, or U.S. $566.0 million, from NIS 1.82 billion in the prior year period. The company attributed the increase to the addition of about 17 thousands square meters of selling space, the success of the Mega In Town format, and the ongoing expansion of Bee Group Retail including the consolidation of the revenues of Naaman Porcelain Ltd.
The company noted that the minor increase in same-store sales were derived from the combination of the growth in revenues of the Mega In Town format and the decrease of revenues of the Shefa Shuk format.
For the first nine-month period, net income advanced 8.8% to NIS 114.3 million, or US$33.4 million, from NIS 105.0 million in the corresponding period last year. Revenues increased by 9.2% to NIS 5.67 billion, or US$1.66 billion, from NIS 5.20 billion in the prior-year period.
Blue Square said after the end of the quarter, it successfully acquired all of Blue Square Chain Properties & Investments Ltd., or BSIP, shares held by the public (20%) for NIS 150.7 million. BSIP was delisted from the Tel Aviv Stock Exchange and is now held fully by the company.
BSI closed Wednesday's regular trading session at $7.60
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