Alliance Tire Co. (TASE: ALIN), controlled by Eliezer Fishman, has posted a loss of $9.5 million loss on foreign exchange deals since the start of the second quarter. The loss was disclosed in the company's first quarter financials, under "Events after the balance sheet date" in the directors' report.
Alliance stated in its report, "A currency transaction entered into by the company in a volume of $53 million which was opened in February and which is valid until mid-September embodies a loss of $6.2 million according to the currency exchange rates applicable on the date the financial statements were signed."
The report said that the company also incurred losses totaling $3.3 million between the balance sheet date and the date the financial statements were signed on other foreign exchange deals which have closed.
It is believed that these losses were incurred, among other things, because of the sharp depreciation of the Turkish lira in recent weeks. The lira has lost some 17% of its value since the beginning of May, and is at a two-year low. The fall of the Turkish lira is attributed to the flight of investors from Turkey as stock markets fell.
Darban Investments Ltd. (TASE: DRBN), which Fishman also controls, has lost some NIS 8 million on foreign currency deals since the beginning of the year. In other public companies controlled by Fishman, Jerusalem Economic Corp. (TASE: ECJM) (JEC), Industrial Buildings Corp. (TASE: IBLD), and Offis Textile (TASE: OFIS), there were no foreign currency dealings, and therefore presumably no losses of this kind.
Alliance had $37.1 million revenue in the first quarter, 1.3% less than in the corresponding quarter last year. The company made an operating profit of $1.7 million, compared with $4.3 million in the first quarter of 2005. It posted a net profit of $1.6 million in the first quarter this year, compared with $9.2 million in the corresponding quarter of 2005.
At the end of the first quarter of this year, Alliance had an orders backlog of $17.6 million.
The company is traded at a market cap of some $48 million.
Eliezer Fishman is the controlling shareholder in "Globes".
Published by Globes [online], Israel business news - www.globes.co.il - on May 24, 2006
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