AFI Development plc (LSE:AFID), the Russian development arm of Africa-Israel Investments Ltd. (TASE:AFIL), controlled by chairman Lev Leviev, swung to a net loss for the third quarter of 2012, because of a large fair value write-downs on projects under development in Moscow. Although revenue rose to $37.7 million for the third quarter from $34.9 million for the corresponding quarter of 2011, a fair value reduction of $198.1 million for the third quarter resulted in a lower operating profit and net loss.
AFI Development posted a net loss of $35.9 million for the third quarter, compared with a net profit of $118.2 million for the corresponding quarter of 2011. Operating profit fell to $56.2 million for the third quarter from $182.9 million for the corresponding quarter
AFI Development stated, "The valuation loss on investment properties under development was due to a decrease in the value of the company's four projects, which are classified as investment property under development: Pochtovaya, Kossinskaya, Tverskaya Plaza Ib and Tverskaya Plaza II."
AFI Development also announced that Leviev has been appointed executive chairman of the company.
On Thursday, Africa-Israel subsidiary Africa-Israel Industries Ltd. (TASE: AFID) reported a net loss on lower revenue for the third quarter. Revenue fell to NIS 586.2 million for the third quarter from NIS 654.5 million for the corresponding quarter. It posted a net loss of NIS 9.4 million for the third quarter, compared with a net profit of NIS 21.7 million for the corresponding quarter. The company attributed the lower results to sharply lower steel sales in Russia and lower average prices in Israel and Russia, compared with last year.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2012
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