Delek Drilling Profit Boosted by Gain From Sale of Tamar Stake

Business in Brief | Chicago-based Starwood Retail to issue bonds in Tel Aviv; Gazit-Globe raises 2017 forecast after weak Q3; stocks inch up

Energy Minister Silvan Shalom, right, and Yitzhak Tshuva, the controlling shareholder of Delek Group, on a drilling rig, March 27, 2013.
Moshe Binyamin

Delek Drilling, which has stakes in the Tamar and Leviathan natural gas fields, boosted third-quarter profit more than fivefold thanks to the sale of part of its Tamar holding. The company, which is controlled by Yitzhak Tshuva, said Monday that net profit had reached $617 million in the three months, up from $81 million a year earlier, after it recorded a $572 million gain from selling a 9.25% stake in Tamar to a spin-off company called Tamar petroleum. The resulting drop in Delek Drilling’s stake in the field to 22% slashed its revenues to $92 million in the quarter from $125 million a year earlier, the company said. Despite repair work that caused Tamar to shut down for several days in the quarter, production rose 5.6% in the first nine months of the year to 7.5 billion cubic meters. Delek Drilling shares finished 1% higher at 9.50 shekels ($2.70). (Eran Azran)

Starwood Retail of U.S. to issue up to $280 billion in bonds in Tel Aviv

Starwood Retail, a U.S. owner and manager of shopping centers, plans to raise between 800 million and 1 billion shekels ($228 million to $280 million) in a bond issue on the Tel Aviv Stock Exchange. If it goes through, the sale slated for sometime in 2018 would be among the biggest of 30-odd American property companies that have tapped the TASE for some 18 billion shekels of debt capital since 2012, taking advantage of low interest rates. Barry Sternlicht, the son of a Holocaust survivor, built the giant hotel and resort group Starwood. Starwood Retail, a unit of Sternlicht’s $55 billion Starwood Capital Group, holds some 30 malls around the United States valued at as much as $6 billion. The Tel Aviv bond issue will be done through a specially created company called BVI that will hold stakes in some of the malls. Poalim IBI and Leumi Partners are expected to underwrite the issue. (Eran Azran and Michael Rochvarger)

Gazit-Globe slips into third-quarter loss but raises 2017 forecast

Gazit-Globe, Israel’s largest real estate company, swung to a loss in the third quarter, partly due to a wider fair-value loss from investment property and investment property under development. On Monday, the company reported a loss of 185 million shekels ($53 million) versus a 381 million profit a year earlier. Property rental income rose 2.7% to 718 million shekels, while net operating income adjusted for exchange rates grew 6.8% to 516 million shekels. Economic funds from operations adjusted for exchange rates gained 33% to 186 million shekels. The fair loss from investment property and investment property under development widened to 101 million shekels from 22 million. Still, Gazit-Globe raised its outlook for economic funds from operations to between 688 million and 700 million shekels in 2017 from 635 million to 649 million, or to between 3.53 and 3.59 shekels a share from 3.25 and 3.32 shekels. Gazit-Globe shares ended up 0.2%% at 34.14 shekels. (Reuters)

Tel Aviv stocks eke out gains despite weaker blue chips

Tel Aviv shares edged higher on Monday, even as many of the most heavily weighted shares posted declines. The benchmark TA-35 index eked out a 0.06% gain to finish at 14,09.85 points, while the TA-125 rose 0.2% to 1,294.06, as some 1.16 billion shekels ($330 million) in shares changed hands. Among the big blue chip losers, Teva Pharmaceutical Industries pulled back from a Sunday rally to end 2.2% down at 46.97 shekels. Bank Leumi was off 1.1% by close at 18.93, and Bezeq fell 1.3% to 5.25. Ham-Let advanced 5.5% to 70.74, making it the top gainer for TA-125 shares, after it turned in a 50% rise in third-quarter net profit to $4 million. Brainsway lost 3.3% to 16.47 on a $1.8 million third-quarter loss, three times the level of a year earlier. Volume leader Bank Hapoalim shed 0.8% to end at 23.18. Union Bank rose 3.6% to 18.55 amid reports that Mizrahi-Tefahot’s board will approve final takeover terms within the week. (Guy Erez)