The company says it will post a loss of $35-40 million for the fourth quarter.
Agrochemicals maker Makhteshim Agan Industries Ltd. (TASE: MAIN) published a severe profit warning just before trading closed on the Tel Aviv Stock Exchange (TASE) today. The IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary will make $50-55 million in accounting write-offs for the fourth quarter of 2006, which will result in a quarterly loss of $35-40 million. The company nevertheless expects $420 million revenue, compared with $405 million revenue for the corresponding quarter of 2005. The company has a market cap of $2.6 billion.
There are four reasons for the accounting write-offs: lawsuits - $17-22 million; retirement of employees - $15-18 million; drop in value of rights to products - $14-17 million; and a provision for doubtful debts, mostly in Brazil - $10-14 million. These write-offs will be offset by tax breaks and adjustments amounting to $10-15 million on these write-offs.
Makhteshim Agan president and CEO Shlomo Yanai left the company at the end of 2006 to become president and CEO of Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), and was replaced by Makhteshim Agan chairman Avraham Bigger for one year. The write-offs are apparently the results of Bigger’s housecleaning at the company.
Published by Globes [online], Israel business news - www.globes.co.il - on January 16, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007