Arazim Investment Ltd. (TASE: AZRM) published its financial report for the third quarter of 2008 on Sunday. The company took a severe hit from its investments in the British property market, with a write-down on investment properties of NIS 78.8 million in the third quarter and NIS 285.3 million in January-September.
Arazim's rental revenue fell NIS 62.4 million in the third quarter of 2008 from NIS 81.3 million in the corresponding quarter of 2007, and to NIS 205.9 million in January-September from NIS 219.7 million in the corresponding period of last year, the write-down on investments pushed the company deep into the red.
The real estate company posted a net loss of NIS 68.8 million for the third quarter, compared with a net loss of NIS 73.5 million for the corresponding quarter. However, the picture for January-September is worse: the company lost NIS 226.3 million, compared with a net profit of NIS 187.2 million in the corresponding period.
Most of the write-down was on two assisted living facilities in the UK, and Arazim warned that more write-downs on its UK properties were likely. The company also owns properties in Israel and Germany.
Arazim had NIS 301 million in current liabilities at the end of September, compared with NIS 348 million at the end of 2007. It had NIS 2.93 billion in long-term liabilities, down from NIS 3.5 billion at the end of 2007. The company attributed this reduction to the buy-back of bonds, and the redemption of bonds that matured. Standard & Poor's Maalot Ltd. gives the company's bond a BB rating with a "Negative" outlook.
Arazim's share has fallen 95% since January. The share was unchanged at NIS 3.61 today, giving a market cap of NIS 37 million. The share rose 8.9% on Sunday, but fell 7.3% yesterday, after the publication of the financial report.
Published by Globes [online], Israel business news - www.globes-online.com - on December 2, 2008
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