The Ticker / Slow Build for Shapir IPO

Financial report is a gas for Paz, which enjoys a 77% leap in net profits, while Tnuva’s food sales sour.

Tomer Applebaum

Shapir Engineering IPO finally gets off the ground

Shapir Engineering’s initial public offering went ahead late Thursday, in the largest IPO on the Tel Aviv exchange since the Azrieli Group in 2010. When the process got started, the controlling shareholders – brothers Harel, Yisrael, Gil and Hen Shapira, whose company has been involved in a large number of major infrastructure projects around Israel in recent years – had been seeking an IPO that valued the company at 2.2 billion to 2.3 billion shekels ($566 million to $591 million) before the new money. On Tuesday they were forced to lower their sights to 1.8 billion shekels, and on Wednesday dropped to 1.75 billion shekels, in the hopes that it would qualify their company for the Tel Aviv 100 index. When institutional demand on Thursday was slacker than hoped, the market cap was reduced to 1.69 billion shekels after commissions and a 20% stake was put on the block for 380 million shekels. The public round scheduled for this week has been projected to raise another 65 million shekels.

Paz reports 77% jump in net profits for first 9 months

Paz Oil Co. reported financial results on Sunday that were the strongest of any of Israel’s publicly traded energy companies. For the third quarter, the company’s net profit jumped 22% compared to the same quarter last year, to about 67 million shekels ($17.2 million). For the first nine months of the year, Paz had a net profit of some 179 million shekels, up 77% compared to the nine months of 2013. Paz, which in addition to its gasoline stations is involved in a range of fuel production activities, announced that, during the course of the month of December, it would distribute 250 million shekels in dividends. Zadik Bino is controlling shareholder of Paz. In trading on the Tel Aviv Stock Exchange, the company’s shares closed 0.7% higher on the news. Paz has a market cap of about 5.4 billion shekels.

Tnuva’s sales drop, but net profits soar on real estate revenues

Sales volumes at Tnuva Food Industries, Israel’s largest dairy producer, dropped to 1.7 billion shekels ($437 million) in the third quarter, a 4% decline compared to the same quarter last year. Sales for the first nine months of the year also dropped by 4%, to 5.1 billion shekels. Tnuva is not a publicly traded company, but the data is provided in the financial results for Mivtach Shamir Holdings, which has a 21% stake in the dairy company. Tnuva attributed the third quarter sales revenue drop in part to government price controls that were imposed on the sale of white cheese spread and sweet cream. Nonetheless, Tnuva’s quarterly net profits jumped by 32%, on capital gains from real estate to 104 million shekels. The rise is also the result of a 28-million shekel provision in the third quarter last year for increased corporate taxes.

TASE Oil and Gas index slides following drop in global prices

There were moderate declines overall in shares on the Tel Aviv Stock Exchange on Sunday, with most attention given to the Oil and Gas index, which dropped by 2.7%, led by the partners in the offshore Mediterranean Leviathan natural gas production site. The fall came against the backdrop of declining global oil prices. The benchmark Tel Aviv-25 index, which hit an all-time high last week, declined by 0.2% to 1,474.60 points. The broader Tel Aviv-100 index dropped by 0.3% to 1,306.94 points. Shares of apparel manufacturer Tefron shot up by 22% at the opening of trade on the company’s financial results and ended the day up 6%. El Al shares rose by 6.6% on the news of falling world oil prices. Supermarket chain Rami Levy Hashikma’s stock declined by 3.3%. This followed news at the end of last week of a decline in the retailer’s operating and net profits.