Business in Brief: Union Loses Suit to Block Stock Exchange Privatization

Hadera Paper Mills turns profit after cost-cutting measures; Ceragon shares tumble on second-quarter results; Tel Aviv shares eke out another day of gains.

The Tel Aviv Stock Exchange (TASE) building in Tel Aviv.
Bloomberg

Union loses suit to block stock exchange privatization

A major obstacle to privatizing the Tel Aviv Stock Exchange was removed Monday after the Jerusalem District Court rejected a suit by the bourse’s workers’ committee that would have forced the TASE to become a public-benefit company. “Despite the fact that the purpose of the bourse’s operations to advance an essential public goal, that doesn’t mean that an examination of its activities leads to the conclusion that its activities are solely ‘public,’” Judge David Mintz said in his decision. As a public-benefit company, the TASE would have been barred from distributing profits, a key part of its plans to demutualize and become a for-profit business in a bid to make it more competitive. The workers’ committee, which has been a key opponent of the privatization process, had argued that giving the TASE for-profit status would create conflicts of interest between the profit motive and the exchange’s role as a marketplace for securities and raising capital. (Jasmin Gueta and Assa Sasson) 

Hadera Paper Mills turns profit after cost-cutting measures

Hadera Paper Mills enjoyed another quarter of improving profitability after taking wide-ranging cost-cutting measures last year. The company, in which was Yishai David’s FIMI private equity fund bought a controlling stake just over a year ago, on Monday reported second-quarter net profit of 3 million shekels ($780,000), turning around from a loss of 8.6 million shekels a year earlier, even as sales declined 6.3% to 409 million shekels. Sales of writing and printer paper were all down as were recycling-service revenues, but sales of packaging climbed 9.2%. Operating profit before one-time items jumped 107% year on year to 17 million shekels, thanks to savings of some 9 million shekels in operating and management costs. Earnings before interest, taxes, depreciation and amortization grew 18% in the quarter to 39 million shekels. Shares of Paper Mills jumped 6.5% to close at 128.50 shekels. (Yoram Gabison)

Ceragon shares tumble on second-quarter results

Shares of Ceragon Networks, a maker of wireless-network equipment, took a beating on Monday after the company reported sharply declining revenues and wafer-thin net income for the second quarter. Net profit was just $49,000 for the three months, or nil on a per-share basis, down from $1.3 million, or 2 cents, a year earlier. Revenues plunged 26% to $70 million. Discounting one-time and other items, net profit was $1.61 million, or 2 cents a share, down 46% from a year ago. CEO and President Ira Palti stressed the report’s upsides. “We are profitable and cash flow positive and we used a portion of our cash to continue paying down debt,” he said in a statement. “Based on the increase in bookings in the second quarter and the pipeline of potential business, we continue to expect a gradual increase in revenues during the second half of 2016.” Cerragon shares ended down 11.2% at 7.76 shekels ($2.03). (TheMarker Staff)

Tel Aviv shares eke out another day of gains

After a roaring start to the week a day earlier, Tel Aviv shares quickly lost their momentum on Monday and barely scratched out a gain by the closing bell. The benchmark TA-25 index was up just 0.03% to 1,473.35 points, while the TA-100 edged 0.09% higher to 1,289.16, on thin turnover of 847 million shekels ($221.5 million). Real-estate shares led sector gains, with Gazit Globe gaining 2.5% to a close of 39.35 shekels and Azrieli Group ahead 1.5% at 174. But Industrial Buildings ended down 2.2% at 4.05. Tire importer Schnapp closed up 7.1% at 22.95 shekels after it said it had agreed to buy Adi Systems, a car-stereo importer, to 75 million shekels. Plasson added 3.7% for a second day of strong gains to end at 109.50. Teva Pharmaceuticals was also a loser, leaving the most actives on a 1.3% drop to 205.40. In the fixed-income markets, the government’s 10-year Shahar bond ended down 0.14% and its 10-year Galil down 0.11%.  (Omri Zerachovitz)