Midroog: Bonei Hatichon Will Net NIS 28m in Q409

Publicly traded companies often issue profit warnings before the publication of their quarterly financial statements, heralding anticipated losses, but investors are not usually notified about anticipated profits.

Bonei Hatichon Civil Engineering and Infrastructures is expected to show a profit of NIS 28 million for the fourth quarter of 2009.

This detail, which was supposed to become public knowledge only after the company files its report, was revealed by the Midroog credit rating agency, in a company survey published in mid-January, when it confirmed a Baa2 rating for NIS 50 million in new bonds Bonei Hatichon plans to issue. Midroog included data from Bonei Hatichon pro forma balance sheets, which indicate a shareholders equity of NIS 93.3 million in the fourth quarter, up from NIS 64.9 million in the third quarter. That equity is part of a NIS 1 billion balance sheet.

Midroog based its rating on figures data published in Bonei Hatichon's third quarter report, regarding the anticipated completion and sale of apartments in the fourth quarter of 2009. Bonei Hatichon records revenues the moment the keys to an apartment are handed to the buyers, and since the company's revenues are only from apartment sales, the difference between the shareholder equity in the third and fourth quarters should serve as a good indicator of the company's bottom line. This forecast, of course, is based on the assumption that the projected sales will materialize.

NIS 28 million in profits is quite significant for Bonei Hatichon, as profits for the first three quarters of the year were NIS 16.7 million, on NIS 113 million in revenues. In 2008 the company netted NIS 51 million on NIS 290 in revenues.