Eshbal - Reports Results for the First Quarter of 2025
("Eshbal" or the "Company")(formerly Hakken Capital Corp. "Hakken") (TSXV: ESBL.V), is pleased to announce that on May 30, 2025, the Company reported the financial results for the quarter ending March 31, 2025, of its recently acquired (the "Acquisition") Israeli wholly owned subsidiary, Eshbal Functional Food (Agricultural Cooperative) Ltd. ("Eshbal Israel").
As previously reported (See Press Release dated April 16, 2025), the Acquisition was completed on April 14, 2025, and the first financial statements to incorporate consolidated statements for both the Company and Eshbal Israel will be for the period ended June 30, 2025.
Yuval Levy, Chairman of Eshbal, commented:
The first quarter continued with a steady growth of nearly 10% reflecting the continuous trend in consumption of health-oriented food products, including gluten-free items. Eshbal Israel continues to benefit from this trend as a leading player within the Israeli market.
Although the Company incurred unusually high, non-operating expenses related to the reverse takeover (RTO) transaction with Hakken, Eshbal Israel still delivered improved financial results, demonstrating the strength and resilience of the company's core business.
We are currently in discussions regarding the potential acquisition of a business in Israel, with proprietary know-how and early-stage sales in the health food segment, particularly within the plant-based category. While we believe this opportunity, if completed, could complement our existing capabilities and enhance our product offering as we prepare to enter the North American market.
In line with our growth strategy—focused on both organic expansion and strategic M&A—we are also actively engaged in discussions with several parties in Israel and the U.S. whose operations and products, if successfully integrated or acquired, would broaden the company's portfolio and support a faster, more effective entry into North America.
There is, however, no assurance that the aforementioned discussions will lead to a finalized transaction."
The following are the highlights from Eshbal Israel's financial statements (The following disclosure does not constitute full disclosure of the Company's financial and operational condition and is qualified by, and should be read in conjunction with the Company's condensed interim financial statements and management discussion and analysis for the nine months ended March 31, 2025 and the condensed interim consolidated financial statements for the three months ended March 31, 2025 as well as the standalone financial statements of Eshbal Israel for the period ending March 31, 2025, available at sedarplus.ca:)
Q1 2025 Financial Highlights (all figures in CDN$)
Eshbal Israel delivered strong results for its first quarter, traditionally its strongest period of the year, due to heightened demand for Kosher for Passover and gluten-free products. Even within this seasonal peak, Q1 2025 marked a record-breaking quarter, achieving all-time highs in both revenues and gross profit margins.
Revenues: Increased from $3.44 million in Q1 2024 compared to $3.75 million in Q1 2025, representing a 9% increase over the period.
Gross Profit: Increased by 21%, rising from $908K in Q1 2024 to $1.098 million in Q1 2025. This improvement reflects not only higher absolute profit but also an enhancement in profitability relative to sales. Gross profit as a percentage of total sales increased from 26% to 29%, indicating improved cost efficiency and stronger operational performance.
Operating Profit: Increased from $351 thousand in Q1 2024 compared to $434 thousand in Q1 2025, a 24% increase over the period. with the operating margin improving from 10.2% of total sales in Q1 2024 to 11.5% in Q1 2025
Working Capital: Increased from $1.28 million as of December 31, 2024 compared to $1.63 million as of March 31, 2025 (this does not include proceeds from the financing, which was completed in April 2025 – See Company's press release dated April 16, 2025).
