Business in Brief: Tel Aviv Stock Exchange Board Weighing Ouster of Chairman

Strauss net up 7% in 3rd quarter, sees $5 million hit from U.S. recall in 4th; Mizrahi Tefahot unveils business plan with goal of boosting market share and dividend; Tel Aviv follows world stock markets higher.

A large digital ticker shows financial information to pedestrians outside the entrance to the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Aug. 4, 2016.
Rina Castelnuovo, Bloomberg

Stock Exchange board weighing ouster of chairman Amnon Neubach

The Tel Aviv Stock Exchange’s board has resumed efforts to try and oust chairman Amnon Neubach. Sources close to the board said on that the board’s weekly meeting last Thursday, directors discussed two options – cutting Neubach’s pay to coax him into resigning or entering into negotiations. Amid management upheaval at the bourse, Neubach agreed three weeks ago when Itai Ben-Zeev was named CEO to give up his role as active chairman and restrict his presence at the TASE to two days a week. But a source said directors were not sure how to oust the chairman. Israel’s securities law says a new chairman can only be appointed with the consent of the Israel Securities Authority chairman, but doesn’t say whether his approval is needed to fire him. “In the next few days the affair will come to a conclusion and he will leave one way or the other,” the source said. (Shelly Appelberg)

Strauss net up 7% in 3rd quarter, sees $5 million hit from U.S. recall in 4th

Strauss Group reported a 7% rise in quarterly net profit Tuesday, boosted by higher sales of coffee, but it said a recall of Sabra spreads in the United States this month would hurt operating profit by $5 million in the current quarter. Adjusted net profit grew to 92 million shekels ($23.8 million) in the third quarter, up from 86 million a year earlier as revenue edged up 6.1% to 2.1 billion shekels. “In Israel, our home base, we continued to have high growth rates in contrast to trends in the market and we reduced prices for our core products,” said chief executive Gadi Lesin. Coffee revenue grew 9% to 955 million shekels in the quarter as operating profit for the segment jumped 76%. Sales at Sabra, its U.S.-based joint venture with PepsiCo, fell 3.4% to 371 million shekels. This week Sabra said it was recalling some hummus products over concerns over possible listeria contamination. Strauss shares dropped 2.6% to close at 59.07 shekels. (Yoram Gabison)

Mizrahi Tefahot unveils business plan with goal of boosting market share and dividend

Mizrahi Tefahot Bank, Israel’s third-largest and its biggest mortgage lender, unveiled an ambitious business plan Tuesday that aims to boost its market share and cut costs over the next five years. The bank said it aimed to increase its market share to as much as 20% during the years 2017 to 2020 and open more branches to bring the total count to as high as 2000. Mizrahi Tefahot said also aimed for an efficiency ratio – which measures its costs to operating income – of 55% and to show average return on equity of 11.5% in 2020. The bank will also double its dividend payout in 2017 to 30% of quarterly net profit from 15% after gaining approval from the Bank of Israel and will examine the possibility of increasing the dividend further in 2018. The plan comes less than a week after the bank reported an 18% increase in third-quarter profit to a record 373 million shekels ($96.5 million). Mizrahi shares closed 1.4% up at 55.35 shekels.” (Michael Rochvarger)

Tel Aviv follows world stock markets higher

Tel Aviv shares ended higher Tuesday, tracking rising world stock markets. The blue chip TA-25 index ended nearly 0.7% up at 1,450.83 points, while the TA-100 added 0.5% to 1,267.87, on fairly brisk trading of 1.45 billion shekels ($380 million). Telco shares rallied, with Bezeq ahead 4.2% to 6.85 shekels by close, Partner Communications up 2.8% to 18.44 and Cellcom Israel up 1.2% to 30.12. But Spacecom dropped 2% to 23.96 after Beijing Xinwei Technology Group said the deadline to finish talks on its acquiring the Israeli satellite company had been extended again, this time to December 1. Bank Leumi led lenders higher, gaining 1.8% to a 15.64 close. Africa Israel Investments extended its losses, plunging 19.5% to 52 agorot as debt-bailout talks continue and shareholders expect to see their holdings diluted to nil. Frutarom dropped 0.5% to 209.90 even though it said Tuesday that its net profit grew by 13.8% to $35.1 million in the third quarter. (Omri Zerachovitz)