Business in Brief: Cofix Discount Cafe Chain to Expand Into Russia, Selling Coffee for 50 Rubles a Cup

Delek reports lower Q1 profits and revenues; Going concern warning issued regarding Israel Petrochemical Enterprises.

A branch of the Cofix coffee chain, south Tel Aviv, January 2015. Less profit per sale, but more sales.
Ofer Vaknin

Cofix discount cafe chain to expand into Russia, selling coffee for 50 rubles a cup

Cofix Group, the company that operates an Israeli chain of cafes and supermarkets where all of the items sell for five shekels ($1.30) plans to expand into Russia. The company reported last week that its café subsidiary has inked an agreement with investors Satesh Melwani, the CEO of the food producer and distributor the Melsons Group, and with brothers Mikhail and Grigory Patchersky to open a chain of Cofix cafes in Russia. The Russian business will be indirectly held by three investors who together will have a 62% stake, while the Cofix Group will own the remaining stake, with the exception of a 2% share. The Russian Cofix locations will be similar to the ones in Israel and will sell all of their products at the uniform price of 50 rubles (about 75 cents). Cofix noted that the products to be sold in Russia currently go for 180 to 220 rubles (about $2.70 to $3.30). (Eran Azran)

Delek reports lower Q1 profits and revenues

The Delek Group reported yesterday that it had lower first quarter profits due to an increase in finance expenses and a smaller contribution from its non-core operations. The company posted a quarterly net profit of 85 million shekels ($22 million), down from 210 million shekels a year earlier, with weaker performances in its fuel and automotive operations. Exploration and production operations, however, which have become a main focus for Delek, jumped, contributing 110 million shekels to net profit compared with 67 million shekels a year earlier. Revenue for the quarter fell to 1.3 billion shekels from 1.5 billion a year ago. Delek owns major stakes in the Tamar and Leviathan gas fields off Israel’s Mediterranean coast. The company declared a dividend of 80 million shekels, or 6.68 shekels a share, for the first quarter. Delek’s shares closed in Tel Aviv on Monday up 2.7% at 740.00 shekels. (Reuters)

Going concern warning issued regarding Israel Petrochemical Enterprises

Israel Petrochemical Enterprises had a particularly dismal first quarter loss of 84 million shekels ($21.8 million) in contrast to a 43 million-shekel profit in the quarter last year, and its latest financial results, released yesterday, include a going concern warning from its accountants, raising the prospect that it may not be able to meet its future obligations. Company shares closed down 4.6% to 4.85 shekels in trading yesterday. The main reason for the loss at the company, whose only business is a 20% stake in Bazan, also known as Oil Refineries Ltd, was a 48 million-shekel provision on its books to adjust the value of its Oil Refineries holding to its current market value. Petrochemical Enterprises is facing 475 million shekels in debt repayments in January and February of next year. The accountants attached the going-concern warning because dividends from Oil Refineries are not expected to cover the repayment. (Yoram Gabison)

TASE closes higher but Fox shares drop more than 6% on earnings report

Shares on the Tel Aviv Stock Exchange closed generally higher yesterday. The benchmark Tel Aviv-25 index gained 0.9% closing at 1,447.46 points while the Tel Aviv-100 index rose by 0.8% to 1,254.63. Trading volume was 892 million shekels ($232 million). The Banks-5 index gained 2%, to 1,338.41 points, led by Bank Leumi shares, which closed up 2.5% at 14.05 shekels ($3.65). Shares of retailer Fox-Wizel, which owns the Fox clothing stores, closed off 6.25% to 58.31 shekels following the release of its latest financial results Sunday. Brainsway shares dropped 14.4% to 13.40 shekels on news that its CEO was leaving after just a year on the job. Shares of Rami Levy, the discount supermarket, jumped 6.1% to 161.90 shekels after reporting 1st quarter profits of 21 million shekels, up 17% over the quarter last year. Revenues for the quarter grew by 7.4% to about a billion shekels following the opening of seven new branches. (Omri Zerachovitz)