2007 Net profit drops at Israel Corp. as expenses rise

Zim's profit fell two-thirds from NIS 360 million in 2006 to NIS 120 million 2007. the increase in revenue was mainly due to higher freight rates and increase in quantities transported
 
Israel Corp Israel's largest investment firm, published last week its consolidated financial report for the fourth quarter of 2007 and for the year as a whole said its quarterly net profit narrowed due to a jump in financing costs. 
 
Israel corporation chairman, Idan Ofer, and Nir Gilad, President & CEO noted that
Israel Corp posted fourth-quarter net profit of 152 million shekels ($43 million), down from 228 million shekels a year earlier. Quarterly revenues amounted to 14.3 billion shekels after reporting 7.1 billion shekels in revenues a year earlier.
 
The company said financing expenses rose to 223 million shekels from 78 million in the fourth quarter of 2006 due to higher financing obligations at most of its subsidiaries as well as the steep appreciation of the shekel.
 
The shekel appreciated by some 10 percent against the dollar in 2007, hurting many Israeli companies whose revenues and sales mostly were in dollars but expenses in shekels.
The holding company posted a net profit of NIS 681 million on NIS 43.9 billion revenue in 2007 and it posted a net profit of NIS 152 million on NIS 14.3 billion for the fourth quarter of 2007, compared with a net profit of NIS 228 million for the corresponding quarter of 2006.
A breakdown of the contribution to Israel Corp.'s results from its main subsidiaries in 2007, compared with 2006, was as follows: Israel Chemicals - NIS 1.15 billion, up from NIS 869 million; Zim's profit fell two-thirds from NIS 360 million in 2006 to NIS 120 million 2007.
Oil Refineries - NIS 142 million, up from NIS 5 million; and Tower - a loss of NIS 193 million, compared with a loss of NIS 261 million.
 
Zim's revenues for the period totaled NIS 15.6 billion, compared to NIS 13.6 billion, up 24.6%. the increase in revenue was mainly due to higher freight rates and increase in quantities transported. During the period average freight rate was up 5.4% and quantities transported up 14.9%
 
In 2007 Zim transported TEU 2.38 million compared to TEU 2.07 million in 2006.
During 2007 Zim purchased 22 new vessels, 12 of which are ultra large container ships with carrying capacity of TEU 12,600 at a cost of US$133 million per ship.