IDB Holding reports NIS 960m loss for 2012
Nochi Dankner's group embarks on cuts to expenses seen as extravagant.
Nochi Dankner's IDB Holding, the publicly-traded company at the top of the IDB group's corporate pyramid, finished 2012 with a loss of NIS 960 million attributed to shareholders. For the fourth quarter of 2012, however, it reported a net profit of NIS 13 million.
The company, in the midst of negotiations with its creditors, reported its financial results just before the Passover holiday.
They included a going-concern warning for the last quarter, meaning that the company's accountants stated that the continued operation of the company in the future was open to question.
Another major IDB group company, IDB Development - which indirectly owns such prominent companies on the Israeli landscape as the Cellcom cellular firm and Super-Sol, the country's largest supermarket chain - reported that it finished the year with a NIS 746 million loss, compared to NIS 2.54 billion the year before. For the last quarter of 2012, it actually reported a net profit of NIS 47 million.
The major positive news for IDB Development was that, by virtue of agreements on easing financial criteria that it came to with six banks and Harel Insurance (which it owes NIS 1.8 billion ), as well as the sale of IDB Development's remaining interest in Clal Industries for NIS 223 million, it managed to avoid a going-concern warning on its financial results from its accountants, KPMG Somekh Chaikin.
The issue will be examined, however, by the Israel Securities Authority.
Despite the heavy losses of the IDB group, Dankner's salary cost the group about NIS 2.7 million last year. The salaries of fellow shareholders Zvi Livat and Avi Fischer each cost the group NIS 2 million. However, senior executives at the group did forgo 10% to 15% of their salaries last year due to IDB's financial state.
Against the backdrop of criticism leveled at the IDB group over what was seen as excessive spending and a lavish lifestyle among its top executives, the group issued a statement saying that it was currently developing a plan that will achieve "massive additional savings in management and general expenses."
It is to include a substantial reduction in the amount of office space it rents at Tel Aviv's Azrieli Center and a reduction in rental expenses.