Business in Brief: El Al Shares Plunge on Wider Quarterly Loss

IDB says it gets offer for most or all of its Clal Insurance stake; Bezeq profits declined 38% in quarter after Yes consolidation; TA-25 index turns lowers after four days of gains.

An El Al plane on the tarmac at Tel Aviv's Ben-Gurion International Airport.
Daniel Bar-On

IDB says it gets offer for most or all of its Clal Insurance stake

IDB Development Corporation, Eduardo Elsztain’s holding company, said on Thursday it had received a non-binding offer from an unnamed buyer to acquire control of its Clal Insurance unit. IBD said the offer was to acquire either between 25% and 30% of the company or for IDB’s entire 55% stake in cash at a company valuation of 2.85 billion shekels ($742 million), a 25% premium on Clal’s Tel Aviv Stock Exchange market valuation. Moreover, IDB said, the buyer was not conditioning the acquisition on due diligence, although it would require stockholder and regulatory approval. The news comes after IDB’s efforts under orders from the government to sell Clal to a single buyer failed, prompting Dorit Salinger, the head of the treasury’s capital market, insurance and savings division, to order the shares be sold in the stock market blocks of 5%. Clal shares ended 3.7% higher at 42.59 shekels. (TheMarker Staff) 

Bezeq profits declined 38% in quarter after Yes consolidation

Bezeq reported a 38% drop in first-quarter profit on Thursday, weighed down by costs from consolidating its satellite TV unit Yes into its main business. Bezeq, Israel’s largest telecoms group, earned 288 million shekels ($75 million) in the quarter, down from 463 million a year earlier and below an average forecast of 333 million shekels in a Reuters poll of analysts. Yes boosted revenues 18% to 2.56 billion and offset lower revenue at mobile phone subsidiary Pelephone where revenues dropped 8% and net profit tumbled 64% to 13 million shekels. Salary expenses rose 17% in the January-March period, while operating expenses grew 27% and net financing expenses jumped 176% to 102 million shekels. The company’s key landline phone business generated 1.11 billion shekels in revenues in the quarter, unchanged from a year ago despite reforms aimed at opening the market. Bezeq shares fell 3.6% to 7.29 shekels. (Amitai Ziv and Reuters)

El Al shares plunge on wider quarterly loss

Shares of El Al Airlines plunged on Thursday after it reported a wider loss in the first quarter as falling airfares offset lower fuel costs and a 9.7% increase in the number of passengers it flew. Israel’s flag carrier lost $21.4 million in the quarter, widening from $16 million a year earlier as revenue dropped 5.6% to $396.5 million. The drop was partly due to the timing of the Passover holiday, a peak travel time in an otherwise seasonally weak quarter for travel and tourism. Operating costs rose by $30 million in the quarter because of a labor slowdown by pilots, which forced El Al to lease jets and pilots to continue service. The airline has since signed a new wage agreement with all its workers. El Al has faced tougher competition since a bilateral air accord with the European Union was signed in 2013. El Al shares fell 10.6% to 2.44 shekels (64 cents). (Yoram Gabison)

TA-25 index turns lowers after four days of gains

The Tel Aviv Stock Exchange’s TA-25 index ended a four-session winning streak on Thursday as earnings disappointments weighed on stocks. The benchmark index and the TA-100 both ended down 0.7% at 1,430.50 and 1,240.87 points, respectively. Turnover was more than double its recent average at 2.46 billion shekels ($640 million) due to the expiry of the May index options contracts. The May TA-25 contract ended at 1,428.58. Among the biggest blue chip losers, Teva Pharmaceuticals ended down 1.75% at 196.20 shekels. Biomed stocks were also lower, led by a 4% drop in Biotime to 10.53 and a 3% decline for Opko Health to 40.21 shekels. Jerusalem Economy led gainers on the TA-100 on a 4.5% advance to 7.38 shekels. Gazit Globe dropped 2% to 34.25 shekels swung to a net loss in the first quarter due to a revaluation of the company’s financial derivatives. In foreign currency trading, the dollar lost close to 0.5% to a Bank of Israel rate of 3.8370 shekels. (Uri Tomer)