In the shadow of its looming debt arrangement, Africa-Israel Investments Ltd. (TASE:AFIL), controlled by Lev Leviev finished the first quarter with a NIS 41 million loss, compared with a NIS 9 million profit in the corresponding quarter in 2015.
Profit from leasing and operating properties totaled NIS 130 million, compared with NIS 138 million in the first quarter last year. The decrease resulted from the continued downtrend in the Afimall City mall in Moscow, the sale of properties in Israel during 2015, and the strengthening of the shekel against the euro (which affected the measurement of total revenue from the leasing of properties in Europe). An increase in revenue from the company's properties in Israel and Europe offset these negative effects to some extent.
The company's industrial activity generated a NIS 22 million profit, compared with a NIS 12 million loss in the corresponding quarter last year. The increase resulted from higher gross profit margins and stronger demand in home design, following a rise in sales turnover, a steep fall in one-time costs, and lower sales and marketing expenses.
Upon the publication of his company's results, Africa-Israel CEO Avraham Novogrocki said, "In view of the deep crisis affecting the Russian economy over the past two years, which has worsened in recent months, we recently announced our decision to formulate a restructuring plan for Africa-Israel's liabilities.
"This decision was made under the force of circumstances, and we will take the necessary measures, both structural and managerial, to adapt our business and organizational activity to this difficult reality. In addition to the company's appeal to its bondholders and shareholders for rescheduling of the debt, the positive momentum in business continues to be reflected in the results of most of its subsidiaries. We are glad to see that these companies are reaping the fruits of the investment in recent years. For the first time, after five quarters of losses, Africa Israel has made an operating profit, and we believe that these are the first signs of a return to black ink."
Published by Globes [online], Israel business news - www.globes-online.com - on May 29, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016