An examination by "Globes" found that the companies in the Tel Aviv 25 Index lost an aggregate NIS 2.7 billion in the fourth quarter of 2008, compared with an aggregate net profit of NIS 6 billion in the corresponding quarter of 2007. Just 14 of the 25 companies in the index posted a profit for the fourth quarter.
2008 was one of the worst years for Israeli public companies. Their shares plummeted and their full-year financial reports proved correct investors' fears about the decline in the companies' business. The poor financial reports began with the smaller companies and spread to the largest and most stable ones.
Real estate companies and banks took the worst beating. Only two real estate companies are left on the Tel Aviv 25 Index: Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) and Gazit Inc. (TASE: GZIT), but they account for a large proportion of the aggregate fourth quarter losses. Africa-Israel lost NIS 2.93 billion and Gazit-Globe reported a loss attributable to shareholders of NIS 865 million. Most of the losses were due to write-down on investment properties.
Most of the banks also reported heavy losses for the fourth quarter.
The two biggest companies on the Tel Aviv 25 Index - Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and Israel Chemicals Ltd. (TASE: ICL) - helped balance things out. Both companies reported strong net profits for the fourth quarter. Teva expects to continue reporting strong profits for the coming quarters, but things are less clear at Israel Chemicals because of falling fertilizer prices.
For the year as a whole, the Tel Aviv 25 companies still managed to report an aggregate net profit: however, it was down 40% compared with 2007, to NIS 19.8 billion.
After many years in which Teva was the most profitable company on the index, in 2008 it was overtaken by Israel Chemicals - $7.6 billion for Israel Chemicals to $7.4 billion for Teva. Excluding these two companies, the aggregate net profit of Tel Aviv 25 Index companies was just NIS 3 billion. Africa-Israel was at the bottom of the rankings, with a loss attributable to shareholders of NIS 4.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on April 2, 2009
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