Strauss Group Ltd. said second-quarter net income fell NIS 37 million, or NIS 0.35 a share, from NIS 56 million, or NIS 0.53 a share, while revenue fell 1.2% to NIS 1.51 billion from NIS 1.53 billion.

"The changes in exchange rates in all countries where the group's coffee company is active, coupled with the difficulty in raising prices in the current macroeconomic conditions, mainly in Poland and Serbia, impacted the growth of the coffee business," said the Strauss Group. "Additionally a decline in the food market in Israel was evident in the first half."

In the first half of 2009 the effects of the recession in Israel on the growth rate of the food and beverages industry were felt. According to StoreNext figures, the Israeli food market decreased in the first half by 1.2% on average in financial terms.

The Strauss Group said that it has contended with the changing environmental conditions by implementing streamlining processes, using substitutes, and raising the prices of its products from time to time.

In the second quarter of 2009 sales by the coffee sector totaled NIS 811 million, a decrease of 0.8%. After neutralizing the impact of currency exchange rates, growth amounted to 5.8%. Organic growth (after neutralizing the acquisition of businesses and the impact of exchange rate differentials) amounted to 2.9%.

In the second quarter sales by all of Strauss Israel's activity, including the coffee business in Israel, totaled
NIS 764 million, a decrease of 2.9%.

Sales by the Israeli sector (excluding coffee) totaled NIS 627 million, a decrease of 2.1%. Second quarter sales were affected by the timing of the Passover holiday. The majority of the 2009 Passover holiday sales took place during the first quarter, whereas the majority of the Passover holiday sales in 2008 occured during the second quarter).

The Group's consolidated operating profit totaled NIS 109 million in the second quarter, compared to NIS 123 million in the corresponding quarter last year.

Net financing expenses in the second quarter totaled NIS 31 million compared to expenses of NIS 29 million in the corresponding quarter last year.