IDB Holdings will distribute NIS 190 million in dividends, UBS analyst Steven Levy said this weekend, revising the bank's previous NIS 140 million forecast.

UBS's projections are still lower than various speculations made recently by other entities, that IDB would be distributing more than NIS 300 million in dividends.

Levy has changed his estimate after Supersol and Clal Insurance of the IDB group announced last week that they would each be distributing NIS 150 million in dividends for their earnings in the first half of 2003.

IDB Development, in which IDB Holdings holds 57 percent, will be the main entity to benefit from the dividend distribution, Levy explained. IDB Holdings, which holds 58 percent in Clal Insurance, will be getting NIS 86 million in dividends from this company. IDB Development will be getting NIS 57 million from Supersol's distribution; IDB Development has 72 percent in Discount Investment Corporation, which in turn has a stake in Supersol.

Elron improves

Meanwhile, two more companies in the IDB group posted their results for the second quarter of 2003. Elron Electronic Industries, which is connected to IDB through Discount Investment Corporation, has managed to cut its losses to $3.4 million in the second quarter of 2003, mainly thanks to a gain, after tax, of approximately $3.2 million, resulting from the sale of 3,500,000 shares of Partner Communications Company Ltd. during the period. Restructuring has also contributed a cost cut of $3.1 million for the quarter, Elron said.

The net loss in the first six months of 2003 amounted to $12.0 million, compared to a net loss of $23.4 million in the first six months of 2002.

Shareholders' equity at June 30, 2003, was $271.4 million; the company's market cap is lower, at $230 million.

Polgat fashion, which is linked to IDB through Clal Industries and Investments, reported 10 percent growth in revenues to NIS 355 million in the first half of the year, thanks to improved sales in both quarters compared to the corresponding periods last year. The sales increase is attributed to expanded exports to Marks & Spencer and to the U.S. market. Polgat's cash flow has also grown, from NIS 6.4 million in the first half of 2002 to NIS 27 million in the second half of 2003.

Gross profit margin grew to 23.9 percent in the first six months of the year, compared to 23.7 percent in the corresponding period in 2002, as the company continued to relocate its production lines to Turkey and Eastern Europe. However, operating profit fell in the second quarter by 46 percent, to NIS 8.1 million. The figure for the first six months is 37 percent. Net profit has gone down as well, to NIS 10 million for the first six months of 2003, compared to NIS 14 million in the first half of 2002. Polgat's profit margin was hurt by the currency devaluation in Israel and in Turkey, where Polgat has a subsidiary. Establishment of new distribution channels and increased storage costs until the company's new facility in Britain can be used, have also eroded the company's profit ratio.