Business in Brief: SodaStream Shares Soar as Net Profit Climbs

Leumi not allowed to buy back Leumi Card unit ■ Israel Chemicals reports a 77% increase in profit ■ Non-profit urges boycott of bond issue by Elad Canada ■ SodaStream turns in 82% increase in second-quarter net profit

The logo of SodaStream International Ltd. is seen outside the company's offices at Airport City, in Tel Aviv, Israel, on Thursday, Aug. 18, 2011
Bloomberg

Bank of Israel bars Leumi from buying back 20% stake in credit card unit

The Bank of Israel said on Wednesday that it would not allow Bank Leumi to buy back 20% of its Leumi Card unit after it has been sold to the U.S. private equity fund Warburg Pincus. The option Bank Leumi took to buy back the share elicited strong criticism, prompting the central bank to act even before Leumi formally sought approval. “It must be made clear that a purchase like this isn’t consistent with the spirit of the law promoting bank competition,” said Banks Supervisor Hedva Ber. “Even if the holding is aimed at assuring Leumi’s continued interest in Leumi Card’s success, ultimately the Bank of Israel must base its decision on ensuring the law’s goals are being implemented.” Leumi agreed last week to sell Leumi Card for 2.5 billion shekels ($680 million) to meet a government deadline for it and Bank Hapoalim to divest their credit card businesses to spur competition for household lending. (Michael Rochvarger)

ICL beats forecasts with a 77% increase in second-quarter net profit

Israel Chemicals on Wednesday reported a 77% increase in profit in the second quarter from a year earlier, boosted by higher prices for potash and phosphate fertilizers and rising sales of bromine products. ICL earned an adjusted net profit of $113 million, up from $64 million a year earlier, excluding the fire safety and oil additives businesses sold off in March. Revenue rose 3.7% to $1.37 billion. The results were ahead of forecasts by analysts polled by Reuters, who had forecast quarterly revenue of $1.37 billion and adjusted net profit of $88 million. “The company’s growth and profitability during the quarter are attributable to improving market conditions and cost controls, as well as the company’s ongoing efforts to optimize potash production,” CEO Raviv Zoller said. Potash sales in the quarter rose to $330 million from $302 million as the average selling price per metric ton rose to $247 from $216. ICL shares ended up 5.6% at 18.53 shekels ($5.04). (Reuters)

Non-profit urges boycott of bond issue by Yitzhak Tshuva’s  Elad Canada

Elad Canada Realty, a unit of Israeli billionaire Yitzhak Tshuva ‘s Elad Canada, met up with resistance as it launched a 260 million shekel ($70.7 million) bond issue on Wednesday. In a letter, the non-profit organization Financial Justice urged institutional investors to refrain from buying the bonds or trading them in the secondary market. It said Tshuva had left lenders taking a 1.5 billion­-shekel haircut in 2012 on the debt of another of his companies, Delek Real Estate, while he was earning billions in profits on his energy ventures. At least one institution, the investment house Altshuler Shaham, said it wouldn’t participate in the bond issue. The three-year bonds being issued now are backed by cash flow being generated by Elad Canada’s Emerald City, a Toronto residential project. Elad Canada listed its shares on the TASE in 2010 after a 260-million shekel offering, but withdrew them less than three years later after a poor performance (Michael Rochvarger)

SodaStream turns in 82% increase in second-quarter net profit

SodaStream shares soared after the maker of home carbonated-beverage devices beats analysts’ expectations by a wide margin on Wednesday for second-quarter results. Net profit climbed 82% to $26.1 million, or $1.14 a share, from the same time last year as revenue grew 31% to $171.5 million. That compared with an average forecast by analysts surveyed by Zacks Investment Research for earnings of 71 cents and revenues of $149.2 million. “These results underscore the progress we are making towards our primary strategic objectives of expanding household penetration and increasing usage of our home carbonation system,” said CEO Daniel Birnbaum. For all of 2018, the company said it now expected full-year revenue to increase about 23%, up from its previous guidance of approximately 15%. Diluted earnings per share is now expected to increase approximately 31% over 2017, compared to its previous guidance of an approximate 8% increase. SodaStream shares finished up 23.2% at 389 shekels ($106). (Guy Erez)

Wall Street carries TA-35 index into positive territory

Tel Aviv shares were given a last-minute lift by Wall Street to finish the day higher on Wednesday. The benchmark TA-35 index gained nearly 0.5% to 1,587.03 points, while the TA-125 climbed 0.4% to 1,413.19, on heavyish turnover of 1.45 billion shekels ($390 million). Second-quarter earnings reports took center stage. Hadera Paper closed 1.7% higher at 266.60 shekels after it said net profit doubled to 22 million shekels. Nova lost 5.2% to 97.80, making it the biggest daily loser on the TA-125, after it said quarterly net fell 11% to $12 million. Melisron rose 3.2% to 148.80 even though its net dropped to 191 million from 315 million shekels a year earlier. Among blue chips, Teva Pharmaceuticals rose 1.1% to close at 88.46 and Nice added 1.75% to 407.50. Among other TA-125 losers, Bank Hapoalim dropped 1.9% to 25.45, Partner Communications fell 4.1% to 13.52 and B Communications shed 3.3% to 26.69.  (Eran Azran)