El Al Israel Airlines (TASE: ELAL), controlled by Kenny Rozenberg, is in talks with the state on being allowed to bring forward the date on which it can distribute a dividend out of its profits, "Globes" has learned. The dividend distribution may possibly take place after the publication of the company’s 2024 results in a few weeks’ time, which are expected to show record profits.
El Al has enjoyed exceptional profitability in the past year thanks to the fact that most foreign airlines stopped flying to Israel because of the war, enabling it to raise fares. In the first nine months of 2024, it posted a profit of $411 million, and it has more than $1 billion cash.
Under the agreement with the state for aid to the airline during the Covid pandemic, El Al, headed by Dina Ben Tal Ganancia, undertook not to distribute a dividend before the end of 2025. On December 30 last year, the company announced that the government had decided to extend its agreement with El Al on providing security for Israel airlines until February 28, 2025. The company’s update also stated that "the Ministry of Finance will examine reducing the state’s participation in the security expenses of the Israeli airlines (retroactively to January 1, 2025)."
El Al said that it was negotiating with the state on a gradual reduction in the state’s participation in security expenses "amid a review of additional agreements." The notification did not state explicitly that this referred to a dividend distribution.
El Al’s share price is up 6.3% this morning, bringing its market cap to well over NIS 4 billion. In the past three years, El Al’s share price has risen by over 217%, mainly thanks to its successful year last year.
El Al stated in response to the report: "As El Al reported to the stock exchange on December 30, 2024, the company is engaged in negotiations with the state on agreements signed with it in 2021-2022, including on reducing the company’s commitments stipulated in those agreements."
Published by Globes, Israel business news - en.globes.co.il - on January 20, 2025.
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