Bank of Israel Narrows Loss in 2016 to $1.5 Billion

Business in Brief | Partner Communications Q1 profits jump as expenses slide ■ Yet another U.S. real estate firm issuing bonds in Tel Aviv ■ Victory Supermarket's operating profit sinks 8 percent ■ TASE generally up but TA-35 and bank indexes buck the positive trend

 An Israeli flag flutters outside the Bank of Israel building in Jerusalem August 7, 2013.
Ronen Zvulun / Reuters

Partner Communications Q1 profits jump as expenses slide

Partner Communications, the country’s second-largest mobile phone company, reported a larger than expected rise in quarterly profits, boosted by lower operating expenses. Partner reported on Monday that it earned 51 million shekels ($14 million) in the first quarter, up from 14 million a year earlier. Operating expenses declined 19% amid a network sharing agreement with rival Hot Mobile. Revenue dipped 18% to 803 million shekels as Partner and its peers continue to battle fierce competition. It was forecast to earn 26 million shekels on revenue of 839 million shekels, according to a Reuters poll of analysts. Partner lost 28,000 subscribers in the January-March period, ending the period with 2.66 million customers. Seeking new revenue streams, the company noted that in the coming weeks it plans to launch its long-awaited TV service that will be based on the Android TV operating system. Partner shares closed up 5.41% to 19.30 shekels on Monday on the news. (Reuters)

Central bank narrows loss in 2016 to $1.5 billion

The Bank of Israel reported on Monday that it had a narrower net loss in 2016 than the year before as weak global currencies continued to weigh on its bottom line. The central bank said it lost 5.3 billion shekels ($1.5 billion) last year compared with an 8.1 billion shekel loss in 2015. It said the weakening of the euro and pound were the main factors for its loss in 2016, while the effect of the weaker dollar did not contribute to the loss. The shekel was largely unchanged versus the dollar in 2016 but gained 18% against the pound and 6% against the euro. The bank’s assets grew 7%, or 25 billion shekels, to 394 billion in 2016, mainly on foreign currency purchases by the central bank in a bid to prevent a rapid appreciation of the shekel. Its foreign exchange reserves in April hit a record high of $105 billion. During 2016, the bank widened its investment of forex reserves into foreign shares. (Reuters)

Yet another U.S. real estate firm issuing bonds in Tel Aviv

Over the past 10 years, 21 American real estate companies have collectively raised more than 14 billion shekels in financing through bond issues on the Tel Aviv Stock Exchange, and it looks like the trend is continuing. The Windsor Capital Group of Santa Monica, California, which specializes in hotel and commercial real estate management, has plans to raise $100 million to $120 million (about 450 million shekels) through a new bond series. Two other U.S. real estate firms are also trying their hand at raising relatively sizable amounts through bond offerings in Tel Aviv. Encore Enterprises of Dallas is looking to attract about $150 million and Waterson Properties of Hilmar, California is seeking to sell about $100 million in bonds. In the coming months, Dallas-based CIM Commercial Trust Corp., a real estate investment trust, plans an initial public offering of several hundred million shekels worth of shares on the TASE. (Michael Rochvarger)

Victory Supermarket’s operating profit sinks 8%

Victory Supermarket, reported a surprising and disappointing 8% drop, to 8.4 million shekels ($2.3 million) in its operating profits for the 1st quarter, compared to 1st quarter 2016. On the brighter side, the supermarket chain’s sales surged by 17.6% in the quarter as a result of the opening of four new stores. But the sales growth for same store turnover, meaning stores that were open using the same format for the quarter this year and last, grew by just 0.1%, to 8,600 shekels per square meter. The retailer’s net profit for the quarter grew by 12.5% to 6.5 million shekels. One of the factors dragging down sales volumes was agreements that the food retailer made with various customer clubs giving members discounts. Victory came to the conclusion that the move was not beneficial in that it did not significantly boost sales but did cut substantially into profits. The venture was canceled this month. It also had a surge in operating expenses, in part due to an increase in the minimum wage. Victory’s shares closed unchanged on Monday at 46.45 shekels. (Yoram Gabison)

TASE generally up but TA-35 and bank indexes buck the positive trend

Despite positive movement on the Tel Aviv Stock Exchange among all of the other indexes on Monday, the Tel Aviv-35 index slipped by 0.06%, closing at 1,421.59 points, while the Banks 5 index was also down – by 0.40% -- closing at 1,675.66 points. By contrast, the Tel Aviv-125 index closed up 0.40% at 1,297.33. The Communications Index jumped by 1.46% to 934.70 points. Trading volume for the day was 1.23 billion shekels ($344 million). Among shares of note, Partner Communications’ stock jumped 5.41% to 19.30 shekels on its earnings report. (See separate story above.) Union Bank’s shares rose 9.76% to 18.00 shekels in heavy trading of 122 million shekels on reports of contacts by former Mizrahi Bank CEO Eliezer Younes to enter the group of investors that control Union Bank. (Uri Tomer)