Holding company Koor Industries (NYSE: KOR) announced today that it lost $66 million in the third quarter, after losing $114 million in the same period last year.
Separately, the company said it completed the sale of 30% of its defense systems subsidiary Elisra Electronic Systems to Elta Electronic Industries, based on a company value of $330 million. Koor will receive $100 million in cash, and expects a $75 million capital gain from the sale. The company said it had already recorded a $25 million capital gain from the sale in its third quarter results, and that it expected to post the balance ($50 million) in the fourth quarter.
Koor vice chairman and CEO Jonathan Kolber said, "Despite the ongoing challenging environments, we continue to see strong growth in two of our major holdings -- Makhteshim Agan Industries and Elisra. Our major telecom holdings, ECI Telecom and Telrad, continue to take substantial steps to focusing and streamline steps in order to strengthen their financial and business position. During the quarter ECI continued to generate a strong cash flow, while Telrad's management initiated a substantial reorganization plan aimed at improving its business." He added, "We are pleased with Telrad's progress in its discussions with the banks and employees, as well as with the potential new orders. We believe that the plan will bear first fruits in the first quarter 2003."
Koor’s revenue from consolidated companies - not including ECI Telecom, which is accounted for on an equity basis - decreased 9.4% to $366 million in the third quarter, compared with revenue of $404 million for the third quarter of 2001. The decline in revenues was mainly at Telrad, partially offset by a strong increase in the revenue at Elisra, the company said.
Operating income from consolidated companies for the third quarter was $24 million, compared with $27 million for the same period in 2001.
Koor also announced that it wrote down the value of its 31% holding in ECI Telecom (Nasdaq: ECIL) by $27 million to $172 million, or $5.22 per share, after an independent appraisal found it was worth $4.58 - $5.22 per share. ECI's share price at Tuesday’s close was $2.25.
Koor noted that the net effect of the $27 million write down on its bottom line was only $5 million, since it was offset by a reclassification of a $22 million capital reserve.
Revenue at Koor’s 100% owned telecom networking unit Telrad declined 39% to $27 million, compared with revenue of $44 million for the same period last year. Telrad’s net loss jumped to $46 million, compared with a loss of $6 million for the same period in 2001.
Telrad's third quarter results include two one-time items - a $20 million provision for a reorganization plan, which includes a reduction in workforce - and a $14 million charge to write-off of a deferred tax asset.
The company said Elisra’s revenue in the third quarter was $81 million, a 12.5% increase from the same period last year, when revenue was $72 million. Elisra’s net profit for the quarter was $1 million, compared with profit of $3 million for the same period last year. The decline was mainly due to the net loss reported this quarter by its consolidated holding, BVR Systems (Nasdaq: BVRS).
Koor shares were up 0.5% at NIS 62 on the Tel Aviv Stock Exchange at web-posting. Today, Bank Hapoalim is due to distribute its holding of Koor shares to its shareholders as a dividend.
Published by Globes [online] - www.globes.co.il - on 27 November, 2002