March 28, 2017 / 6:41 AM / a year ago

Israel's Strauss Q4 profit down on Sabra spreads recall

TEL AVIV, March 28 (Reuters) - Israeli food company Strauss Group reported a 22 percent drop in quarterly net profit on Tuesday, hurt by a recall in November of its Sabra spreads in the United States.

Strauss, a maker of snacks, fresh foods and coffee, reported adjusted net profit of 58 million shekels ($16 million) in the fourth quarter, down from 74 million a year earlier. Revenue rose 7.2 percent to 2.03 billion shekels.

Separately, Strauss said unit Strauss Coffee has agreed to buy back a 25.1 percent stake in the company held by buyout firm TPG Capital Management for 257 million euros.

Strauss is the second-largest company in the Israeli food and beverage sector.

“Strauss Israel continued to exceed market growth rates in our home base in Israel and Strauss Coffee posted a set of excellent results for 2016,” said Chief Executive Gadi Lesin.

Coffee sales grew 21 percent to 1.06 billion shekels in the quarter as EBIT profit rose to 84 million shekels.

Sales at its international dips and spreads joint ventures with PepsiCo fell 27 percent.

Lesin said a recall of Sabra spreads in the United States in November “is being responsibly managed to ensure a return to solid performance”.

Strauss said in November the recall would hurt operating profit by $5 million. ($1 = 3.6100 shekels) (Reporting by Tova Cohen; Editing by Steven Scheer)

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