Zorbas reports profit decline

Cyprus’ leading bakery chain, A. Zorbas & Sons (ZRP) recorded a decline in first nine month results because of increased costs related to its new production unit, higher labour costs as well as higher raw material and energy costs. Net profit declined 22.9% YoY to EUR 2.33 mln compared to EUR 2.93 mln profits a year ago in the same period.

Total sales advanced by 5.1% YoY to EUR 43.49 mln in 9M07 from EUR 41.38 mln in 9M06, mostly on the back of  the increase in the number of retail outlets to 47 from 46 in 9M06 and new product additions.

Gross profit advanced by 4.4% YoY to EUR 15.96 mln with gross profit margin worsening slightly by 25bps to 36.7% in 9M07. Operating expenses rose by 12.4% YoY to EUR 10.88 mln, with EBIT coming lower at EUR 2.56 mln for a 23.9% YoY decline.

In the third quarter, ZRP sales were up 8.4% YoY to EUR 16.27 mln with net profit declining 23% to EUR 1.12 mln in 3Q07 compared to EUR 1.45 mln 3Q06 profit.