Melisron sees profits jump after mall acquisitions

Commercial real estate firm Melisron has reported a major increase in revenues from rent and other sources, but a drop in the value of its assets. In its just-released fourth quarter 2009 financial statement, the firm said the drop in the value of its holdings resulted in a 3.5% decline in operating profits to NIS 52.6 million, but a net profit for the quarter of NIS 14.6 million, which is 60% higher than the same quarter in 2008.

The year as a whole looked different than the Q4 results. The company saw a 35% increase in revenues in 2009 to NIS 382 million. The rise in the value of its assets from NIS 55 million to NIS 120 million boosted its operating profits by 56% to about NIS 395 million. Melisron also reported a 160% jump in net profits to NIS 374 million. A positive cash flow from ongoing operations in 2009, which were primarily the result of consolidating the operations of malls that it acquired, came to about NIS 225 million, for an increase of about 40% over 2008.

The company attributes the rise in revenues for 2009 to the purchase of the Ramat Aviv and Savyonim malls, to higher rental rates and the rise in the consumer price index. Most of the company's revenues are index-linked.

NIS 221 million in financing revenues due to a reduction in corporate tax rates also helped boost the firm's net profit. Melisron reported payment of a 4th quarter dividend of NIS 30 million to its shareholders.

"The annual results were substantially influenced by transactions involving the purchase of the Ramat Aviv, Savyonim and Hutzot Hamifratz malls," chairwoman Liora Ofer said. "In addition, the company recorded an increase in revenues demonstrating financial strength during a period of international economic crisis."

Melisron CEO Moshe Rosenblum, said the firm "managed [in 2009] to maintain high occupancy in the malls and office buildings that it owns, at a rate of 98 to 100%."

Compensation paid in 2009 to the late Yossi Perry, who served as company CEO until August of last year, was about NIS 3.5 million, including NIS 1.4 million in salary.

Rosenblum, who took over in August, received about NIS 3.5 million in compensation for the balance of the year. The manager of the firm's Kiryon complex in the Haifa area, David Sagi, received about NIS 1.1 million in 2009 compensation, while Binyamin Cohen, who manages the Ramat Aviv and Savyonim malls, got about NIS 860 million. The cost of compensation to the manager of the Rananim mall in Ra'anana, David Ben-Moshe, was about NIS 600 million.