Maybe the 50-percent leap in Elbit Medical Imaging's shares since mid-October was not just a sign of the current rally on the exchange. Yesterday Elbit Medical Imaging signaled investors that business is rebounding after two difficult quarters in which losses totaled NIS 103 million and financing expenses soared to NIS 163 million.

For the third quarter of 2003, the company, controlled by real estate magnate Motti Zisser, posted a net profit of NIS 14.2 million, compared with losing NIS 5.6 million in the same quarter of 2002.

And while in the previous quarters, mounting financing expenses had threatened the very stability of the company, Elbit managed - with help from European currencies - to slash this item to only NIS 9 million.

Although the company develops and manufactures medical imaging systems and equipment, as its name implies, Elbit Medical Imaging is primarily involved in the operation of hotels and commercial centers, and in the establishment and operation of medical centers throughout the world. The company's products also include equipment for the general radiology and cardiology markets. Elbit operates in Israel, Europe, the United States and other countries.

Elbit reported yesterday a 63 percent leap in third-quarter revenues from operating 18 commercial centers in Eastern Europe to NIS 103 million, and a more modest, but nevertheless impressive, 20 percent jump in revenues from hotels to reach NIS 47.8 million.

Elbit suffers tremendously from currency fluctuations, and points to its bottom line to demonstrate: NIS 14 million profit in Q3, NIS 66.5 million loss in Q2, NIS 36.8 million loss in Q1 and NIS 39.7 million profit in Q4 of last year. CEO Shimon Yitzhaki said yesterday that Elbit's third quarter results are a more or less true reflection of the company's profitability as there were no significant changes in the European currencies in the period, compared to a sharp 14 percent weakening of the Hungarian forint and Polish zloty in the second quarter.

The latest report was also the first opportunity to see how Elbit's new mall in the Herzliya Pituah marina is working out. The mall, in which Elbit invested $150 million, contributed some $2.5 million to the company's income, which Yitzhaki explained was not even the full picture as many restaurants and entertainment places in the mall had yet to open.

Responding to an observation that the mall is not attracting large numbers of visitors, Yitzhaki admitted that "in midweek the numbers are still not good enough, but the matter should be reexamined in a year's time when all the facilities and shops have opened. In every mall, there are 10-15 percent unsatisfied shopowners at some stage, and they finally leave. Maybe there are too many bag shops in this mall."