Only eight Maof companies posted improved Q2 results
The collective profit line of the financial reports of the Tel Aviv Stock Exchange's 25 biggest companies for Q2 2002 indicates the continuation of the Q1 trend, as results from the banking and insurance sectors continued to deteriorate.
The collective profit line of the financial reports of the Tel Aviv Stock Exchange's 25 biggest companies for Q2 2002 indicates the continuation of the Q1 trend, as results from the banking and insurance sectors continued to deteriorate and holding companies upped their bottom lines.
The major retail chains also saw substantial declines in their results in the second quarter. As consumers felt the pinch in decreasing real wages and increasing unemployment, fiercer competition for household business was evident in Blue Square Israel (NYSE: BSI) and Super-Sol's (NYSE: SAE) financial results.
The total improvement this quarter over the parallel period last year amounted to NIS 643 million (cumulative Maof-25 blue chip index profits of NIS 757 million whereas Q2 2001 posted NIS 114 million). The uptick was overshadowed by the improvement that had been seen in Q1 this year, when the Maof companies together pocketed NIS 2.2 billion. Nonetheless, many holding companies post much higher book values for their stakes than current market caps reflect, which could hint at impending write-offs if financial markets don't liven up.
The 11 companies that saw their business results deteriorate materially include banks (Bank Hapoalim, Bank Leumi, Israel Discount Bank, United Mizrahi Bank and Tefahot), two insurance companies (Migdal and Clal) and three companies that represent the two major retail chains (Blue Square Israel, Blue Square Properties and Super-Sol).
The scope of the banks' slide amounted to NIS 560 million, mostly on doubled provisions for doubtful debt, which reached NIS 2 billion.
Only eight of the 25 reported substantial improvement in their net profits. Those include most of the members of the IDB group (except Clal Insurance), the Israel Corporation, Koor (NYSE: KOR), Partner Communications (Nasdaq: PTNR) and Teva Pharmaceuticals (Nasdaq: TEVA). IDB and Koor managed to shrink the enormous losses they reported in Q2 2001.