The Covid-19 crisis and the closure of shopping malls and commercial centers for much of the quarter is reflected in the financial results of Azrieli Group Ltd. (TASE: AZRG).
NOI in the second quarter totaled NIS 232 million, compared with NIS 400 million in the corresponding quarter last year. The decrease mainly derives from the malls segment against the backdrop of the closure during the quarter. In the office segment the quarter ended with a rise of around 4% in the same-property NOI, which totaled NIS 153 million compared with NIS 147 million in the same quarter last year. The new Data Centers operations also contributed to offset the decrease.
FFO excluding senior housing totaled NIS 174 million, compared with NIS 288 million in the same quarter last year. The total FFO amounted to NIS 199 million compared with NIS 333 million in the same quarter last year. In the same quarter last year, the company reported FFO of NIS 45 million in the senior housing segment, most of which from first time resident move-ins at the Azrieli Modi’in home, versus a contribution of NIS 25 million in the present quarter, in view of the resumption of senior home resident move-ins only in the second half of the quarter.
Net profit from operations totaled NIS 123 million in the quarter, compared with NIS 176 million last year. Loss in the quarter totaled NIS 72 million, and derives mainly from the decrease in the NOI, fair value impairment of investment property of NIS 234 million, net of a decrease in the financing expenses caused by the negative CPI. In the quarter the Group invested NIS 229 million in investment properties, in the development and construction of new properties and in the upgrade and improvement of existing properties.
Azrieli Group CEO Eyal Henkin said, "The quarter’s results were of course impacted by the two month closure of the malls. Most of the impact on the segment’s operating results was recorded in this quarter. Azrieli Group’s business diversity is especially notable in this period, with the activity in the offices segment continuing to be strong with growth in the same-property NOI and the signing of several significant lease contracts during and after the quarter. The new Data Centers operations are beginning to be reflected in the results, and their contribution is expected to increase with the progress in the projects under development.
He added, "In the senior housing activity, we are witnessing impressive stability and the initial contribution of the new home in Lehavim with signed contracts for over 50% of the units and residents gradually moving in. The extraordinary financial strength combined with the high cash balances and the low leverage allow us to continue with the business plans as scheduled, while acting at the same time to identify new business opportunities."
Published by Globes, Israel business news - en.globes.co.il - on August 19, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020