Leumi quarterly net exceeds analysts’ expectations, plans more share buybacks
Bank Leumi reported a larger-than-expected rise in second-quarter net profit on Tuesday and said it would purchase more shares to complete its buyback program. Leumi earned 903 million shekels ($244 million) in the quarter, up 3% from a year earlier and above a forecast of 843 million in a Reuters poll of analysts. The bank in March approved purchasing up to 700 million shekels of its shares. It has so far bought shares worth 303 million shekels and said it would spend an additional 397 million shekels. Leumi also declared a quarterly dividend of 361 million shekels, representing 40% of net income. Net interest income rose 9% to 2.4 billion shekels, driven by the quarter’s positive consumer price index, to which many interest rates are linked, Barclays analyst Tavy Rosner said. Leumi recovered 14 million shekels from loans previously written off, versus a credit loss expense of 42 million a year earlier. Leumi shares ended up 2% at 23.20 shekels.
Strauss Group vows not to raise prices at least till end of the year
Strauss Group, Israel’s No. 2 food maker, sought a public relations advantage on Tuesday, promising that unlike most of its rivals it had no plans to raise prices for its products -- at least this year. “We’ve invested a lot in efficiency steps and will continue to do so,” said CEO Eyal Dror. The promise follows price increases for dairy products that have been announced in recent days by after repeated hikes in the government-controlled price for raw milk amounting to 10%. Tnuva, Israel’s biggest food company, said last week it was boosting prices on many dairy products by an average of 2.2% while Tnuva, while Tera said it would raise them between 1.5% and 3.4% and tony Gad Dairies by 2.8%. Strauss’ product line includes dairy goods as well as coffee, sweets and condiments. In related news, the Strauss family said on Tuesday it had sold a 1% stake in the company at 78 shekels ($21.17) a share, reducing its stake to 59.3%. Strauss shares ended down 0.9% at 77.81 shekels.
Ormat products sales at risk over Turkey’s financial crisis, says Leumi Capital Markets
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Ormat Technologies, the geothermal-power company, may he hurt by Turkey’s financial crisis because about a third of its orders backlog is to the country, Leumi Capital Markets said in a report on Tuesday. “At this stage the overall exposure can’t be quantified because it depends to a large extent on how the situation [in Turkey] develops,” said analyst Ella Fried, noting that Ormat had not issued any statement about its outlook. Most of Ormat’s business is owning and operating geothermal plants, but 13% of its earnings before interest, taxes, depreciation and amortization comes from product sales and Fried forecast that that share would fall next year as Ormat boosts its generating capacity and revenues by as much as 100 megawatts. Fried said she was considering whether to make any change in her Market Overweight rating for Ormat shares and its $59 target price for the company’s U.S.-traded stock. Ormat shares ended down 1.7% at 186.80 shekels ($50.70).
Paz weighing plan to enter electric-power business
Paz Oil said on Tuesday it was exploring a plan of building a power stations at the site of its Ashdod refinery at a cost of $450 million to $600 million as it seeks to diversify its business. The company said it hoped to take advantage of the existing infrastructure at the site, including a direct link to the national natural gas pipeline network, as well as an existing construction permit for a power plant. In addition, Paz said it was considering a bid for one of five power stations due to be sold by Israel Electric Corporation. The move comes as the recently approved reform of the power sector will gradually reduce state-owned IEC’s grip on the market, reducing its share of nationwide generating capacity b about half to 40% at a time when electricity use if forecast by the government to grow 2.7% annually through 2030. Paz shares finished 1% higher at 527.60 shekels.
Tel Aviv shares post their fifth session of losses
Tel Aviv shares lost altitude in the final 90 minutes of trading on Tuesday to end their fifth straight session lower. The benchmark TA-35 index was down almost 0.3% to 1,576.31 points by close, while the TA-125 dropped 0.1% to 1,411.72, on turnover of just over 1 billion shekels ($270 million). Among blue chip losers, Teva Pharmaceuticals declined 3% to 80.96 shekels, Nice lost 2.7% to 406.40, B Communications 3% to 23.47 and Mazor Robotics 4.1% to 86.72. Building-supplies maker Inrom rose 2.1% to 13.80 after it reported a 12% increase in second-quarter net profit to 30 million shekels. Reit 1 fell 0.5% to 14.13 even though it turned in a 14% increase to 55 million shekels in its second-quarter funds from operations last Monday In the foreign currency market, the dollar reversed course a weakened nearly 0.5% against the shekel to a representative rate of 3.6910. The euro lost, too, shedding 0.3% to 4.2136.