"Subsidiaries, Amot in Israel and others overseas, pay us dividends and their cash flows are good," Alony Hetz president and CEO Nathan Hetz optimistically told "Globes" after Alony Hetz Property and Investments Ltd. (TASE: ALHE) published its consolidated financial report for the first quarter of 2009. Hetz owns 22.37% of the company and the Wertheim family owns 26.3% through M.Wertheim Holdings Ltd.
The company posted a net profit of NIS 52.8 million for the first quarter compared with NIS 6.8 million for the corresponding quarter of 2008. Net profit attributable to majority shareholders was NIS 42.1 million for the first quarter, compared with a net loss attributable to majority shareholders of 4.3 million for the corresponding quarter.
Alony Hetz operates in five markets through its subsidiaries: a 74% stake in Amot Investments Ltd. (TASE:AMOT) in Israel; an 18% stake in PSP Swiss Property Group AG (SWX:PSPN) in Switzerland; a 14% stake in First Capital Realty Inc. (TSX:FCR) in Canada; a 6% stake in Equity One Inc. (NYSE: EQY) in the US; and Brockton Capital LLP in the UK. Amot published its first quarter financial report yesterday, posting a net profit of NIS 41.2 million, up from NIS 40.8 million for the corresponding quarter.
Nathan Hetz continued, "Last year, all the news was in one direction. Now we're demonstrating stability, and we hope that the markets will quickly emerge and return to growth. In the fourth quarter of 2008, we were all scared that the end of the world had arrived, but that was apparently not the situation. Bonds in Israel and overseas have correctly strongly, and investors now distinguish between companies and are not making sweeping judgments."
Alony Hetz posted NIS 81.9 million in rental revenue for the first quarter, 10% more than the NIS 74.2 million for the corresponding quarter. However, total revenue fell 15% to NIS 128.7 million for the first quarter from NIS 150.9 million for the corresponding quarter. The reason for the decline was a NIS 39.1 million adjustment in property valuation in the corresponding quarter compared with a NIS 3 million adjustment in the first quarter.
Alony Hetz's cash flow rose 26.4% to NIS 43 million. Net operating income (NOI) rose 13% to NIS 72 million for the first quarter from NIS 63.6 million for the corresponding quarter. However, shareholders' equity fell 6% to NIS 1.9 billion at the end of March.
"In the real economy, we're far from emerging from the recession, but the slope seems a lot less steep, and we're beginning to see that within a few months we will see a return to growth," said Hetz.
Although occupancy rates remain high, Alony Hetz cautioned, "The level of demand has fallen, and there is downward pressure on rent. It appears that the crisis is still at its height, and its end and its repercussions are still unknown. If the crisis continues and worsens, it will affect the company's revenue."
Alony Hetz's share rose 2.1% today to NIS 9.14.
Published by Globes [online], Israel business news - www.globes-online.com - on May 25, 2009
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