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From the quarterly financial statements released yesterday by the Israel Corp., one immediately sees falling profitability and growing losses in almost every line among the company's many holdings. The company moved from NIS 43 million in net profits in the third quarter of 2000 to a loss of NIS 30 million in the corresponding quarter this year.

As part of its policy to create long-term value for the group, the Israel Corp. had invested heavily in Tower Semiconductor and other firms in telecommunications, but for the time being, the Israel Corp. cannot report on great positive strides in the added value.

President and CEO Yossi Rosen struck an upbeat note and pointed out yesterday that in comparison to other holding companies in Israel, "this was the best report." He explained that other holding companies were suffering problems within specific fields, whereas in the case of the Israel Corp., given the difficult period in economic terms both locally and abroad, their subsidiaries were facing competition well. For example, Rosen pointed out that although Israel Chemicals Ltd (ICL) posted a poor quarter, it was still the leading company in terms of results among global chemical companies.

Tower Semiconductor, Rosen added, would continue to invest in its new chip plant, Fab 2, in northern Israel, despite losses. However, when the new plant is up and running, according to Rosen, Tower's existing plant will be absorbed within the new, and when the semiconductor market picks up, Tower will be in a much better position.

For the first nine months of the year, the Israel Corp. posted a loss of NIS 17 million, compared to NIS 150 million profits for the first nine months of 2000. Most of these losses stemmed from the largest holdings of the company. Net profits from Israel Chemicals Ltd slumped 35 percent, for example, while Zim shipping saw a 30 percent falloff in profits. Tower Semiconductor saw its losses increase to NIS 127 million.

In addition, the Israel Corp. made provisions of NIS 13 million for the falling value of its investments in Koor, and a further NIS 8 million for additional investments in the third quarter. The company's capital gains were hit by the performance of its holdings, falling sharply from NIS 68 million to NIS 29 million.

Just about the only clause that showed higher expenses in relation to the corresponding period last year was the one-time expenses of NIS 63 million in the first nine months of 2000. But despite this cost, mostly in restructuring within the organization - particularly in Israel Chemicals (making Israel Corp one of the first in the economy to announce heavy dismissals, 1,200 among its senior staff) - it failed to stop Israel Corp's move from black to red in this quarter.