The recession worsens, but some companies are weathering the storm and even reporting higher profits. Bank HaPoalim reported it made a profit in the first quarter of 2009 after losing money last year, and earnings soared for cellular phone operator Cellcom and the Rami Levi supermarket chain.
Although many companies are earning less money than ever, or are even losing, the country’s largest bank and the supermarket chain are only two of several that so far have overcome the recession. In some cases, they have saved jobs through cost cutting and wage cuts.
Bank HaPoalim said it earned NIS 42 million ($10 million) in the first quarter of this year after posting a loss of 1.56 billion shekels ($400 million) for the same period last year. The first quarter profits would have been closer to 1 billion shekels ($250 million) if it were not for an accounting expense of revalued financial instruments.
Cellcom, Israel’s largest mobile phone operator, reported a whopping 36.5 percent increase in first quarter profits although revenues were down 2.1 percent. It explained that cost-cutting moves were a factor that resulted in higher profits. It declared a dividend of 84 cents, only one cent less than earnings per share, resulting in a yield of well over 12 percent based on the current prices of stock shares.
Its parent company, Discount Investment, which is a subsidiary of the giant IDB Holding conglomerate, said its profits doubled for the first quarter. The firm’s holdings also include Koor, Makhteshim and Shufersal.
Cellcom's competitor Partner announced that its profits were flat for the quarter.
The Rami Levi supermarket chain reported last week that its profits for the quarter soared nearly 60 percent on a sales increase of 22 percent, indicating its profit margins were up while consumers try to balance their family budgets, often with smaller paychecks.
However, the Strauss food company said its profits dropped by three percent for the first quarter although sales increased by 1.2 percent.
In the energy sector, Delek Israel’s revenue was down on lower fuel prices, but that did not stop the company from earning NIS 37.5 million ($9.4 million) compared with NIS 28.2 million ($7 million) in the corresponding first quarter in 2008.