Israel Aerospace reports tiny profitbut a swelling orders book
Israel Aerospace Industries on Thursday reported a wafer-thin profit in the third quarter on declining sales, but said a swelling orders backlog bodes well for the future.
Net profit was just $10 million, or 1.2% of sales, turning around from a year-earlier loss of $94 million caused by charges against layoffs at the state-owned company. Revenues fell 5.9% in the quarter to $840 million, with most units reporting declines.
The one bright spot was Bedeq, the civilian-aviation unit. Looking ahead, IAI said it had won $4.5 billion in new contracts since the start of the year, mainly from India. That boosted its orders backlog to $10.8 million.
“The broad scope of agreements with customers signed during the year will be reflected in sales over the coming years which include the largest transactions in the history of Israel’s defense industry,” said CEO Yossi Weiss. He noted that labor agreements had enabled IAI to reduce wage costs. (Ora Coren)
Bezeq profit falls as phone revenue slumps
Bezeq reported an 18.3% drop in third-quarter net profit on Thursday as revenue from telephone services continued to decline and taxes rose. Profit fell to 322 million shekels ($92 million) from 394 million a year earlier as revenue slipped 3.8% to 2.42 billion shekels.
Telephony revenue dropped 8% while high-speed Internet revenue grew 3.5%. Bezeq was forecast to earn 346 million shekels on revenue of 2.43 billion, a Reuters poll of analysts showed. The company is battling legal troubles, with the Israel Securities Authority saying last month that it had found enough evidence to support bringing criminal charges against controlling shareholder Shaul Elovitch and senior executives for alleged fraud.
Elovitch, who was forced to step down as Bezeq’s chairman, and the other officials have all denied any wrongdoing. Profit at Bezeq’s Pelephone mobile unit declined 25% to 24 million shekels even as its subscriber base grew to 2.475 million from 2.348 million. Bezeq shares rose 2.3% to close at 5.24 shekels. (Reuters)
Delek Group profit boosted by sale of Tamar gas field stake
Energy conglomerate Delek Group on Wednesday reported a record profit in the third quarter boosted by the sale of a stake in the Tamar natural gas field. Delek said it earned 1.02 billion shekels ($291 million) for the quarter, up from 85 million a year earlier.
Delek sold a 9.25% stake in the Tamar project, which alone resulted in a profit of 873 million shekels. Delek’s Delek Drilling unit still has a 22% share of the Tamar field, which it is committed to sell off by the end of 2021.
Revenue for the quarter rose to 1.78 billion shekels from 1.55 billion. Delek said completion of the staged sale of insurer Phoenix to the international insurance company Sirius is expected to contribute over 2.3 billion shekels in cash. The company said it was continuing to negotiate with groups in Egypt over “significant long-term export agreements.” Delek shares ended up 4.1% at 556.40 shekels. (Reuters)
Energy stocks lead Tel Aviv Exchange higher
Tel Aviv shares ended higher, despite losing ground after midday on Thursday, as energy stocks posted strong gains. The TA-35 and TA-125 indices both ended up 0.42% at 1,455.32 and 1,329.81 points, respectively, as turnover swelled to 2.38 billion shekels ($680 million) on the expiry of the November TA-125 options contract.
Delek Drilling and Ratio led oil and gas shares higher, both climbing 2.9% to 10.39 shekels and 2.90 shekels, respectively. TowerJazz rose 7.2% gain to 127 after it informed analysts it had a long-term annual revenue target of $3.5 billion, versus a projected $1.4 billion for 2017.
Castro dropped 2.5% to 17.10 after reporting same-store sales dropped 6% year on year in the third quarter. In foreign currency trading, the dollar slipped below the 3.50-shekel mark for the first time in more than six weeks, with its Bank of Israel rate set at 3.4990 shekels. (Omri Zerachovitz)