Business in Brief

Delek nearer sale of Phoenix Insurance; ICL to merge HQ offices, cut costs and jobs; stronger dollar doesn't mean stronger profits; DSP signals good results, forecast; and Teva lifts the TA-25.

Teva's headquarters in Jerusalem.
Bloomberg

Delek close to selling Phoenix unit

Delek Group is about to sign a binding agreement to sell its Phoenix insurance unit to Kushner Funding, the New York investment company led by Jared Kushner, real estate mogul Donald Trump’s son-in-law. The two sides moved closer to a final accord on an agreement in principle they reached in July after a group of Delek executives met with Kushner in New York last week. Meanwhile, the Finance Ministry is examining Kushner’s fitness to hold an insurance license, the one big obstacle remaining to closing the deal. Sources say regulators have so far found no reason not to award Kushner the license. Kushner Funding has agreed to buy a controlling 47% stake in Phoenix at a company valuation of 3.63 billion shekels ($950 million). Delek shares ended unchanged in Tel Aviv at 1,290 shekels ($339.34). (Michael Rochvarger)

ICL aims for $50 million in savings through HQ mergers

Israel Chemicals hopes to save $50 million annually by merging the headquarters of its many subsidiaries into three centers that will provide them joint back-office services. The shakeup will eliminate about 100 jobs. The three centers will be located in Israel, St. Louis, Missouri, and Amsterdam, and cover services such as global sourcing. The Amsterdam center will employ 300 people, for which ICL has rented 5,500 square meters. The plan is part of the company’s bigger strategy, launched in August 2013, to bring about some $350 million in annual savings by 2016 as well as to boost profits and make acquisitions. The company has been contending with the breakup of the global potash cartel and higher costs imposed by changing regulations, most notably the Sheshinski committee’s proposals to increase taxes on natural-resource companies operating in Israel. ICL shares rose 1.25% to close at 25.95 shekels ($6.85). (Yoram Gabison)

Research: Strong dollar won’t bring strong profits

As third-quarter earnings are published over the next several weeks, investors looking forward to higher corporate profits due to the strengthening dollar may be in for a rude surprise. Research done by the consulting company Fair Value found that profits for companies included in the Tel Aviv Stock Exchange’s TA-100 index have in the recent past seen profits drop after the dollar appreciated. Fair Value found that, for example, when the dollar appreciated 9% in third-quarter 2011, TA-100 corporate profit plunged 40%. While exporters benefit in periods of strong dollar gains, “a depreciation of the shekel usually points to weaker macroeconomic conditions domestically,” said Eli Al-El, Fair Value’s chief executive. He warned that this year’s third-quarter dollar runup came against a background of weak local demand. (Dror Reich)

DSP beats profit forecasts, sees strong final quarter

The Israeli multimedia-chip designer DSP Group on Monday reported stronger-than-expected third-quarter net income on record sales of products for the office market, and it forecast fourth-quarter results above market predictions. In the third quarter, DSP earned 10 cents a diluted share excluding one-time items, compared with 8 cents in the year-earlier quarter. Revenue rose 4% to $36.7 million, near the high end of DSP’s own forecast. Analysts had forecast EPS excluding items of 3 cents on revenue of $34.2 million, according to Thomson Reuters IBES. For the fourth quarter DSP forecast revenue of $34 million to $38 million and EPS excluding one-time items of 3 cents. Analysts had been forecasting on average revenue of $33 million and adjusted EPS of 1 cent. DSP shares were up 5.1% at $10.18 in late morning trading in New York. (Reuters)

Teva trades heavily, lifting TA-25 higher

The Tel Aviv Stock Exchange ended higher on Monday as Teva Pharmaceutical and tech stocks gave a lift to a mostly lower market. The benchmark TA-25 index finished up 0.2% at 1,440.75 points while the TA-100 added almost 0.2% to 1,293.70 on turnover of 1.24 billion shekels ($326 million). Teva dominated trading, climbing 2.2% to 217 shekels ($57) as 212 million shekels in shares changed hands. Investors continued to buy in the wake of last week’s strong quarterly earnings report. Among tech stocks, Compugen advanced 4.6% to 27.76 shekels and TowerJazz added 2.8% to 28.33. Shemen Oil & Gas jumped 12.8% to 22 agorot after its long-serving CEO, Yossi Levy, said he would step down at the end of the year. Bank Leumi paced losers, posting a 1.3% decline to close at 13.36 shekels. (Omri Zerachovitz)