Africa-Israel Investments Ltd. (TASE:AFIL), controlled by chairman Lev Leviev, posted a net profit attributable to majority shareholders of NIS 32 million for the second quarter of 2011, down from NIS 1.21 billion for the corresponding quarter of 2010. The profit in the corresponding quarter was due to a capital gain of NIS 1.45 billion on the company's debt settlement with its bondholders.
Revenue rose 37% to NIS 1.7 billion for the second quarter from NIS 1.21 billion for the corresponding quarter. Operating profit rose to NIS 307 million for the second quarter from NIS 12 million for the corresponding quarter.
Africa-Israel expects to report a pretax capital gain of NIS 60 million for the third quarter for its share of the acquisition of the Moscow Municipality's 25% stake in the AFIMall City by subsidiary AFI Development plc (LSE:AFID).
Africa-Israel's shareholders' equity rose NIS 4 billion at the end of June from NIS 1 billion at the end of March 2010, before the debt settlement. Shareholders' equity including minority interests was NIS 8 billion at the end of June.
Africa-Israel CEO Izzy Cohen said, "Africa-Israel reported another quarter of growth and higher profitability and operations by all its subsidiaries, without exception. As part of its business strategy, Africa-Israel continues to focus on building its cash balance and increasing its revenue from the AFIMall City, which we expect will become the company's main income-producing property in the coming years. The company is also developing other income-producing properties that are in various stages of development, which we expect will become a key factor in expanding the company's revenue and cash flow base."
Cohen added, "Africa-Israel is now dealing with the uncertainty characterizing the Israeli and global markets. The company has a positive cash flow, a stable capital structure, and a liabilities structure that was handled properly in time, so that we can grow at this period and continue the development, construction, and redevelopment of assets on the basis of the current large and high-quality inventory of land available to the company for residential and income-producing projects in Israel and other countries."
Africa-Israel's share price rose 3.9% in morning trading to NIS 14.29, giving a market cap of NIS 1.65 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2011
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