Discount Investment Corporation (TASE: DISI) reported today that its fourth quarter results had been harmed as a result of the profit warning issued by Makhteshim Agan Industries Ltd. (TASE: MAIN).
The company estimated that Makhteshim’s loss would cause it a loss of NIS17-19 million, which would be recorded under its holding companies item. Discount Investment indirectly holds 39% of Makhteshim through Koor Industries (NYSE: KOR; TASE: KOR).
Makhteshim recently published a severe profit warning for the fourth quarter, saying that it expected losses of up to $40 million due to accounting provision amounting to $55 million, which it will book in its in fourth quarter report. The provision is perceived as a sorting out of company finances by incoming CEO Avraham Bigger.
Makhteshim made the provision to cover the costs it incurred through legal actions, an employee retirement program, decreases in the fair value of licensing rights, and doubtful debts. The profit warning follows a year which saw a crisis in the global agrochemical market, driven by the slump in agricultural business in Brazil and a series of exogenous factors.
Published by Globes [online], Israel business news - www.globes.co.il - on January 29, 2007
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