The Ticker: PennantPark Becomes First Foreign Non-property Firm to Issue Bonds in Tel Aviv

El Al Airlines profit brought down by competition, higher fuel costs ■ Private-label sales, less competition boosted Super-Sol profit ■ Cellcom net edges down 3% as TV business becomes profitable ■ Tel Aviv shares eke out gains amid a spate of earnings reports

FILE PHOTO: The logo of Israel's El Al Airlines at Ben Gurion International Airport, August 23, 2017.

PennantPark becomes first foreign non-property firm to issue bonds in Tel Aviv

In the first-ever debt offering in Israel by a foreign company not in the real estate industry, the U.S. investment firm PennantPark Floating Rate Capital said on Wednesday it priced an institutional debt offering of $138.7 million of notes for trade on the Tel Aviv Stock Exchange. The notes, which were rated AA-plus by Standard & Poor’s Maalot, mature in 2023 and pay annual interest of 3.83%. Leader Capital Markets underwrote the offering, which garnered demand of about $400 million. Some 30 American property companies have tapped the TASE for some 18 billion shekels ($5.1 billion) of debt capital since 2012, taking advantage of low interest rates. This week sources said Starwood Retail, a U.S. owner and manager of shopping malls, planned to raise up to 1 billion shekels in bonds in Tel Aviv. Based in New York, PennantPark primarily invests in U.S. middle-market private companies in the form of floating-rate senior secured loans. (TheMarker Staff)

El Al Airlines profit brought down by competition, higher fuel costs

El Al Airlines reported a 29% drop in quarterly net profit due to higher jet fuel costs and increased competition from low-cost airlines. Israel’s flag carrier said on Wednesday it earned $49 million in the third quarter, down from $69.5 million a year earlier. Revenue fell to $626 million from $644 million. Operating expenses rose 1%, mainly on higher wages, while jet fuel costs increased 7.2 %. In addition, the Rosh Hashanah and Yom Kippur holidays, during which El Al does not fly, occurred in September this year, reducing the number of operational days for the airline in the quarter. El Al’s load factor slipped to 85.3% in the quarter from 87.4% a year ago and its market share at Ben-Gurion International Airport stood at 26.5%. In August, El Al received the first of 16 Boeing Dreamliners to be delivered through 2020 to replace its aging long-haul fleet, which the airline hopes will win back customers lost to competitors. El Al shares finished down 1.5% at 1.63 shekels (46 cents). (Reuters)

Private-label sales, less competition boosted Super-Sol profit

Super-Sol, Israel’s largest supermarket chain, said on Wednesday net profit rose 27% in the third quarter, boosted by higher sales of its private label products and moderating competition that allowed it to squeeze lower prices from its suppliers. Net profit rose to 65 million shekels ($18.5 million), up from 51 million shekels a year earlier even as revenue slipped 0.7% to 3.02 billion shekels due to the timing of the High Holy Days in September, which reduced the number of days stores were open and cut sales at stores open for at least one year by 1.9%. Sales per square meter edged down 0.4% to 6,174 shekels, slowing because Super-Sol reduced overall selling space. For the first time, the retailer included online sales in its same-store and square-meter sales figures. Online sales accounted for 11.2% of the total in the quarter, up from 8.6% a year earlier. Super-Sol shares ended 2.7% higher at 22.50 shekels. (Yoram Gabison)

Cellcom net edges down 3% as TV business becomes profitable

Cellcom Israel, the country’s largest mobile operator, reported a 3% drop in third-quarter net profit, weighed down by lower revenue and higher taxes. Cellcom said on Wednesday it earned 32 million shekels ($9.1 million) in the quarter, down from 33 million shekels a year earlier. Revenue slipped 1.7% to 975 million shekels, with the company attributing it to price erosion from competition. Cellcom had been forecast to earn 41 million shekels on revenue of 968 million shekels, according to Thomson Reuters I/B/E/S. Cellcom’s low-cost internet-based TV service had 154,000 subscribers at the end of the quarter, up 56% from a year earlier and representing over 10% of the Israeli TV market. “Cellcom TV operations shifted to profitability and to a positive contribution to the company’s results in the third quarter,” Cellcom CEO Nir Sztern said. But its mobile subscriber base slipped 0.6% to 2.805 million in the quarter. Cellcom shares ended down 0.7% at 35.66 shekels. (Reuters)

Tel Aviv shares eke out gains amid a spate of earnings reports

Tel Aviv shares edged higher Wednesday amid a spate of third-quarter earnings reports. The TA-35 and TA-125 indexes both eked out gains of less than 0.1% to end at 1,417.72 and 1,301.89, points, respectively, on turnover of 1.3 billion shekels ($370 million). Bezeq led the most actives on a 4.7% drop to 4.89 shekels amid concerns about cash flow at the telecommunications company. Teva Pharmaceuticals gained 3.6% climb to 47.70. Among companies reporting earnings, Spuntech soared 15.3% to 10.02 after it boosted operating profits 15%, its first year-on-year gain in two years, under a new CEO. Azrieli Group rose 1.2% to 193.20 despite a 5.7% drop in net in the quarter to 263 million shekels. Paz Oil edged 0.02% lower to 588.20 on news its quarterly net profit jumped 176% to an adjusted 176 million shekels. Bank Leumi led the bank sector lower with a 1.2% decline to 19.30. (Shelly Appelberg)