Business in Brief: Africa Israel Ends Year With 2.7 Billion Shekel Loss

Bezeq profit down in 2016, but promises a better year in 2017 | Partner narrows loss in fourth quarter, plans Android TV service soon | Tel Aviv shares trade quietly as euro slides

Lev Leviev.
Ofer Vaknin

Africa Israel ends year with NIS 2.7b loss

Lev Leviev’s Africa Israel Investments ended 2016 with a whopping 2.73 billion shekel ($750 million) loss, the real-estate holding company reported on Thursday. The red ink left it with negative equity of 390 million shekels and a “going concern” warning on its financial report. Faced with 2.8 billion shekels of debt to bondholders and the failure so far to reach a bailout agreement, the company was weighed down by 390 million shekels of financial costs and faces a difficult 2017 because it doesn’t have enough cash to cover repayments coming due.  Despite that, the group’s top executives enjoyed generous pay packages, topped by Leviev’s 6.52 million for the year. CEO Avraham Novogrocki pointed to the bright side, noting that many of the company’s operating units, like Deyna Cebus and Africa Israel Residences, were profitable. “We believe that the positive momentum in the companies will continue,” he said. Africa Israel shares ended down 2.6% at 53 agorot. (Shelly Appelberg)

Bezeq profit down in 2016, but promises a better year in 2017

Bezeq, Israel’s biggest telecommunications company, said net profit dropped 28% in 2016 but forecast a better year this year. Net dropped to 1.24 billion shekels due to falling revenues at its Pelephone mobile unit, a 70% jump in financing cost and the consequences of its consolidating results with its Yes satellite-television unit. In the fourth quarter, profit dropped close to 50% to 185 million shekels, below a forecast of 258 million shekels in a Reuters poll of analysts due to one-time items of more than 200 million shekels. In its core fixed-line segment, quarterly profit dropped 31% while at Pelephone it was down 73% to 3 million shekels. But the company said net profit should rise to 1.4 billion this year and it declared a dividend of 578 million shekels for the second half of 2016, or a distribution of 100% of net profit. Bezeq shares ended 0.9% higher at 6.51 shekels. (Shelly Appelberg)

Partner narrows loss in fourth quarter, plans Android TV service soon

Partner Communications, Israel’s second-largest mobile phone company, narrowed its loss in the fourth quarter even as it battled fierce competition. Partner said Thursday it lost 7 million shekels ($1.9 million), compared with 65 million shekels a year earlier when it was hit by an impairment charge. Revenue slipped 18% to 821 million shekels. Partner had been forecast to earn 17 million shekels on revenue of 844 million shekels, according to a Reuters poll of analysts. It lost 32,000 subscribers in 2016 to 2.686 million. Partner said it was working on two projects aimed at creating new revenue streams and planned to launch a service based on the Android TV operating system soon while building a fiber-optic network. Shares of Partner ended down 3.1% at 19.05 shekels. (Reuters)

Tel Aviv shares trade quietly as euro slides

Tel Aviv shares traded quietly but lower Thursday as the euro weakened against the shekel. The blue chip TA-35 index moved sideways all day, finishing down 0.2% at 1,397.38 points, while the TA-125 edged lower less than 0.1% to 1,251.54. Turnover was a brisk 1.76 billion shekels ($490 million). While Hapoalim and Leumi were lower after reporting earnings (see story on page 15), Israel Discount ended 1.1% up at 8.51 shekels. Delek Group finished 0.7% higher after it said Thursday it earned 375 million shekels ($104 million) in the fourth quarter, up from 54 million shekels a year earlier. Delek declared a dividend of 200 million shekels, or 16.69 shekels a share. The bigger losers on the TA-25 were Plasson, down 4.8% to 112.90, and Spuntech, down 3.9% to 10.96. In foreign currency trading, the euro weakened 0.75% to a Bank of Israel rate of 3.8820 shekels. The dollar lost a more modest 0.3% to 3.6150. (Uri Tomer)