Russia Probing Africa Israel Over Illegal Privatization Suspicions

Business in Brief | Leumi profit up, pays first dividend in years ■ Neto gains on Passover, loses big customer ■ TASE finishes week with gains

Lev Leviev, the controlling shareholder of Africa Israel.
Moti Kimchi

Leumi profit up, pays first dividend in years

Bank Leumi, Israel’s second-largest lender, reported a 36 percent rise in first-quarter net profit Thursday and declared its first dividend in six years. Leumi posted quarterly net profit of 622 million shekels ($174 million), up from 459 million shekels a year ago. Net interest income rose to 1.87 billion shekels from 1.66 billion. It had credit loss expenses of 101 million shekels versus recoveries of 123 million a year ago. Leumi said it would pay a dividend for the quarter of 124 million shekels. In March, the bank adopted a dividend policy, as its board set a payout ratio of 20 percent of quarterly profit starting in the first quarter of 2017. (Reuters)

Russians launch probe into Africa subsidiary

Africa Israel Industries reported to the stock exchange Thursday that a subsidiary is facing an investigation in Russia over suspicions that the company’s 2001 privatization was carried out illegally. Africa Israel Industries, which is part of Lev Leviev’s Africa Israel group, bought the Russian company’s share capital through a subsidiary in 2007. During the privatization, rights were allegedly transferred from the Russian securities authority to a company that has since gone bankrupt and is no longer listed in Russia. The rights in the Russian company were used as collateral by Africa Israel Industries to secure a 50-million-shekel loan from parent company Africa Israel.  Shares fell 5.7% on Thursday. (Shelly Appelberg)

Neto gains on Passover, loses big customer

Food wholesaler Neto’s operating profit increased 30% thanks to the timing of Passover this year, the company reported in its first-quarter financial reports. This compensated for the sharp loss in profits by subsidiary Bikurey Hasade, after the produce wholesaler stopped working with discount grocery story chain Yeinot Bitan. The loss of that customer may reduce Bikurey Hasade’s turnover by 24%. Neto’s profit was 28 million shekels last quarter, a 7% increase over the parallel quarter in 2016. Its share price fell 6.1% on Thursday. (Yoram Gabison)

TASE finishes week with gains

The Tel Aviv Stock Exchange ended the trading week with gains on most of the leading indexes, as companies continued submitting first-quarter financial reports. The blue-chip Tel Aviv-35 Index gained 0.3% on Thursday and 0.8% for the week, to close at 1,423.35 points, while the broader Tel Aviv-125 Index gained 0.2% on Thursday to close at 1,301.73 points. Bank shares closed up 1.4% for the week. Smaller shares continued gaining, with the Tel Aviv-90 up 4.2% for the week and 20% for the year, compared to the Tel Aviv-35, which is down 3.2% for the year. Real estate shares closed up 2.4% for the week, despite a 1.3% loss on Thursday. Biomed shares gained 4% for the week, but are down 11% for the year. Total turnover was 2 billion shekels. (Guy Erez)