Israel Chemicals boosts Israel Corp. results

Zim reported an operating profit of $1 million for the second quarter; Better Place lost $65 million.

Israel Corporation (TASE: ILCO), controlled by Ofer Holdings Group, posted a net profit of $83 million ($13.52 per share) for the second quarter of 2012, compared with a net profit of $115 million (after adjustments) for the corresponding quarter of 2011. Revenue edged up to $3.21 billion for the second quarter from $3.14 billion for the corresponding quarter.

The profit reported by Israel Chemicals Ltd. (TASE: ICL) and the improvement in the results of Zim Integrated Shipping Services Ltd. were the main factors affecting Israel Corp.'s results. Israel Chemicals contributed $214 million to Israel Corp.'s results for the second quarter.

Zim's loss narrowed to $47 million for the second quarter from $68 million for the corresponding quarter and $163 million for the preceding quarter. It posted an operating profit of $1 million for the second quarter compared with an operating loss for the corresponding quarter. In the first half, Zim's loss widened to $210 million from $179 million for the corresponding half of last year.

Zim's cash flow from operations was $24 million in the second quarter, compared with a negative cash flow of $82 million in the preceding quarter and negative cash flow of $6 million in the corresponding quarter.

Israel Corp. attributed most of the improvement in Zim's results to higher shipping fees and to streamlining measures by the company. Shipping companies reported improved operations and better results. Zim carried 6% more containers during the second quarter, and the average shipping price was 6% higher, boosting the company's revenue 22%, compared with the preceding quarter, to $1.05 billion.

Better Place Inc's loss widened to $65 million for the second quarter from $20 million for the corresponding quarter, due to the deployment of the electric car company's battery replacement network. It had $310 million in cash and deposits at the end of June. 500 Renault Fluence ZE electric cars are already on the roads in Israel and Denmark, where they have accumulated more than three million kilometers of travel.

Better Place today announced that it had secured a €40 million loan from the European Investment Bank. The company added that, in Israel, an electric car made a 1,150-kilometer trip in 16 hours from Tel Aviv to Rosh Hanikra, the Hermon, Dead Sea, Eilat, and back to Tel Aviv. There was no need for recharging, as the car's battery was replaced as needed at battery replacement stations along the route.

Israel Corp. chairman Amir Elstein said, "Israel Corp. has met its strategic plan, so that by the end of the second quarter, a large part of the company's huge investments in recent years are on the verge of coming to fruition, and we will begin to see many of the results during 2013."

Out of $5.7 billion in investments in Israel and other countries, $4.8 billion will begin yielding results during 2013, and a $900 million investment in a Peruvian hydroelectric power station is due to begin showing results in 2016.

At the conference call following the publication of the financial report, Israel Corp. CEO Nir Gilad said, "We are seeing the initial commercial results of our huge investments in recent years, such as the completion of a large project in Peru. We look ahead with satisfaction, after several years of very hard work in investments in Israel and around the world.

"All in all, the global economic environment is still very challenging, but our global deployment allows us to balance various activities. During 2013, we will see the completion of another huge project - the joint car venture in China, Qoros Auto Company Ltd.. We are due to start the production of cars in early 2013."

Published by Globes [online], Israel business news - - on August 28, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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