The closure of HyDefense is part of a general review of activities at Rabintex.
Nearly three years after buying 75% of the company, ballistic armor kits producer Rabintex Industries (TASE: RABN) announced today that HyDefense, which produces impact resistant doors, would cease operations. Rabintex said that the move was because of the losses the subsidiary had caused it over the past two years.
In the past year, HyDefense has won only one project, and even that turned out to be unprofitable, causing large losses to the parent company as well. Rabintex's announcement said that its share of the subsidiary's losses amounted to NIS 6.7 million in the first nine months of this year. Rabintex has consolidated HyDefense's results since 2006. It now looks as though the loss Rabintex will record on account of HyDefense's activity for 2008 as a whole is slowly but surely approaching the figure for 2007, which was NIS 9.6 million.
In the third quarter of this year, Rabintex made a net loss of NIS 28.5 million, compared with a profit of NIS 5.5 million in the corresponding quarter of last year. In the light of the dismal results, Rabintex management has decided to reexamine its range of activities and its subsidiaries. It may be that shutting down HyDefense is a harbinger of further contraction at Rabintex.
Published by Globes [online], Israel business news - www.globes.co.il - on December 10, 2008
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