Elbit Imaging Ltd. Announces Results for Year 2009
TEL AVIV, Israel, March 28, 2010 /PRNewswire-FirstCall/ -- Elbit Imaging Ltd. ("EI") (TASE, NASDAQ: EMITF) announced today its results for the year 2009.
Years 2009 and 2008 results analysis:
Consolidated revenues in Year 2009 were NIS 693 million (US$ 184 million) compared to NIS 1,098 million reported last year.
Revenues from commercial centers decreased in 2009 to NIS 85 million (US$ 23 million) from NIS 524 million last year. This decrease is attributable to: a decrease in revenues from sale of trading property from NIS 439 million in 2008 (attributable to the sale of the Plzen Plaza commercial center in Czech Republic and price adjustment in Arena Plaza in Hungary which was sold in the end of 2007) to nil in 2009. The revenue in the amount NIS 85 million is attributable mainly to the commencement of operation of two commercial centers in the beginning of 2009 (Riga Plaza in Latvia and Liberec Plaza in Czech Republic).
Cost of commercial centers decreased to NIS 169 million (US$ 45 million) compared to NIS 433 million reported last year. This decrease is attributable mainly to decrease in the cost of sales of trading property due to the fact that no sales of commercial centers has been executed in 2009 compared to sale of the Plzen Plaza commercial center in 2008 as mentioned above.
Revenues from hotels operations and management increased to NIS 397 million (US$ 105 million) as compared to NIS 384 million reported last year. This increase is attributable to: (i) an increase in the revenues from the Radisson Bucuresti Hotel in Romania which was partially opened in mid of 2008 offset by; (ii) decrease in the revenues from all other hotels as a result of the global economic slowdown mainly effected the results of the first half of 2009; (iii) devaluation of the average Pound rate against the NIS.
Costs and expenses from hotels operations and management decreased to NIS 353 million (US$ 94 million) compared to NIS 355 million reported last year. This decrease is attributable mainly to the reduction of operational expenses in the hotels and to the devaluation of the average rate Pound against the NIS, offset by; increase in expenses related to the Radisson Bucuresti Hotel which was partially opened in mid 2008.
Revenues from sale of medical systems increased to NIS 62 million (US$ 16 million) compared to NIS 38 million reported last year. This increase was mainly due to increase in the number of systems sold compared to last year.
Costs and expenses of medical systems operations increased to NIS 67 million (US$ 18 million) compared to NIS 55 million reported last year. The increase is attributed to the increase in number of system sold as mentioned above.
Research and development expenses increased to NIS 74 million (US$ 20 million) compared to NIS 69 million reported last year. These costs are attributable to the operations of InSightec.
Revenues from sale of fashion merchandise increased to NIS 118 million in 2009 (US$ 31 million) compared to NIS 103 million reported last year. The increase is mainly attributable to: (i) the opening of first Gap store in Jerusalem; (ii) full operation in 2009 of eight Mango stores which opened during 2008 as compared to partly operation in 2008 offset by; (iii) decrease in sales of Mango existing stores during 2009 as compared to 2008.
Cost and expenses of fashion merchandise increased to NIS 134 million (US$ 35 million) compared to NIS 118 million reported last year. This increase was attributable mainly to increase in retail operation as mentioned above.
General and administrative expenses increased to NIS 66 million (US$ 17 million) compared to NIS 55 million reported last year. The increase is attributed mainly to: (i) change in non cash expenses (mainly stock based compensation expenses and provisions) in the amount of NIS 11 million; (ii) decreases in management fee charges to the group companies in the amount of NIS 5 million offset by (iii) reduction in salaries costs in the amount of NIS 5 million.
Financial expenses (income), net resulted in expenses of NIS 261 (US$ 69 million) in 2009 compared to income of NIS 64 million reported last year. The increase in the amount of NIS 325 million is attributed mainly to: (i) increase in expenses in the amount of NIS 296 million from change in fair value of financial instruments measured at fair value through profit and loss which totaled to the amount of NIS 71 million (mainly revaluation of Plaza Centers Debentures and SWAP transactions in the amount of NIS 177 million offset by revenue in the amount of NIS 106 million from derivatives and marketable securities) compared to revenue in the amount of NIS 225 million in 2008;(ii) decrease in the amount of NIS 42 million in financial revenue which totaled in 2009 to the amount of NIS 93 million comparing to NIS 135 million in 2008 mainly due to a decrease in the interests rates and the exchanges rates offset by: (iii) decrease in financial expenses in the amount of NIS 13 million (interest, exchange rate, Israel Consumer Price Index ("CPI") attributed to loans and debentures after capitalization of financial expenses to qualifying assets) which totaled to the amount of NIS 283 million in 2009 as compared to NIS 296 million in 2008.
Impairment charges and other expenses, net increased to NIS 260 million (US$ 69 million), compared to NIS 69 million reported last year. The impairment charged in 2009 is mainly attributable to real estate assets in the amount of NIS 232 million. The Company impaired Plaza Center's real estate assets in the amount of NIS 216 million following the market conditions in Eastern Europe and following the increase in the sales yields and the expectations for decrease in rent income.
Loss before taxes in 2009 was NIS 706 million (US$ 187 million) as compared to NIS 4 million in 2008.
Tax benefits in 2009 were NIS 36 million (US$ 9 million) as compared to income taxes in the amount of NIS 25 million last year.
Loss from continuing operations in 2009, was loss of NIS 671 million (US$ 178 million) compared to NIS 29 million reported last year.
Profit from discontinuing operation, net in 2009 was NIS 17 million (US$ 5 million) compared to NIS 5 million reported last year.
Loss in 2009 was NIS 654 million (US $173 million) of which NIS 533 million (US$ 141 million) is attributable to the equity holders of the Company and amount of NIS 121.2 million (US$ 32 million) is attributable to the minority interest.
Loss in 2008 was NIS 24 million of which NIS 104 million is attributable to the equity holders of the Company and income of NIS 80 million is attributable to minority interest.
Mr. Dudi Machluf, co-CEO of the Company stated:
The implications of the global crisis are evident in our 2009 results, in which we recorded a loss derived mainly from non-cash expenses of NIS 400 million attributable to impairment of real estate assets and change in fair value of debentures of Plaza Centers.
Our two major operating sectors, Commercial Centers and Hotels, were significantly influenced by the global recession and slowdown.
The decrease of financial resources in Eastern Europe affected Plaza Centers: by reducing the volume of construction and development of projects for which bank financing is yet to be secured; and by reducing the number of potential buyers for Plaza's commercial centers, since many of the potential buyers are dependent on bank financing.
Despite the challenging market conditions, in 2009, Plaza Centers successfully obtained financing lines for several of its commercial centers - two in Poland and one India. One of the commercial centers in Poland was opened to the public about a week ago and the other is scheduled to open in June 2010. In addition, Plaza Centers is finalizing negotiations to secure additional construction bank financing loans, mainly in Poland and in Serbia.
We expect that the recovery of financial markets and return of potential buyers, will enable the sale of commercial centers by Plaza Centers done in the past.
The global recession and slowdown has also affected our Hotel Division. Lately, there are signs of improvement in the hotels division; however it is still too early to evaluate if this is indeed a trend.
While 2009 was a challenging year, the financial crisis created new opportunities for Elbit Imaging to strategically position the Company for the years to come. We were one of the first companies to identify the opportunity in the US commercial real estate market, and in the past year we carefully examined potential real estate acquisitions that meet our criteria. About two months ago, we executed a joint venture agreement with a strategic partner, according to which we committed to invest USD 200 million, in equal parts, in a high yield real estate investment in the US, with a focus on commercial centers. We are investing a great deal of management resources in developing this real estate US arm and we expect our efforts to bear fruit.
As part of the group strategic reorganization, we established a subsidiary under the name of "Elbit Medical Ltd." which will hold our medical and bio-tech holdings in InSightec and Gamida Cell. As announced, we have filed a draft prospectus, with the Israel Securities Authority, in respect of a proposed initial public offering of shares on the Tel Aviv Stock Exchange to enable the public to be part of the group's medical companies.
About Elbit Imaging Ltd.
The activities of Elbit Imaging Ltd. are divided into the following principal fields: (i) Shopping and Entertainment Centers - Initiation, construction, operation, management and sale of shopping and entertainment centers and other mixed-use real property projects, predominantly in the retail sector, located in Central and Eastern Europe and in India; (ii) Hotels - Hotel ownership, operation, management and sale, primarily in major European cities; (iii) Image Guided Treatment - Investments in the research and development, production and marketing of magnetic resonance imaging guided focused ultrasound treatment equipment; (vi) Residential Projects - Initiation, construction and sale of residential projects and other mixed-use real projects, predominantly residential, located in Eastern Europe and in India; and (v) Other Activities - (a) The distribution and marketing of fashion apparel and accessories in Israel; (b) venture capital investments; and (c) investments in hospitals, and farm and dairy plants in India, which are in preliminary stages.
Any forward-looking statements in our releases include statements regarding the intent, belief or current expectations of Elbit Imaging Ltd. and our management about our business, financial condition, results of operations, and its relationship with its employees and the condition of our properties. Words such as "believe," "expect," "intend," "estimate" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors including, without limitation, the factors set forth in our filings with the Securities and Exchange Commission including, without limitation, Item 3.D of our annual report on Form 20-F for the fiscal year ended December 31, 2008 and the draft prospectus referred to in this press release, under the caption "Risk Factors." In addition, any future public offering is subject to risks facing any public offering, including without limitation, general economic conditions, the conditions of the capital markets, the interest level of investment banks and investors in our company and the performance of our business. Any forward-looking statements contained in our releases speak only as of the date of such release, and we caution existing and prospective investors not to place undue reliance on such statements. Such forward-looking statements do not purport to be predictions of future events or circumstances, and therefore, there can be no assurance that any forward-looking statement contained our releases will prove to be accurate. We undertake no obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in our filings with the Securities and Exchange Commission including, without limitation, Item 3.D of our annual report on Form 20-F for the fiscal year ended December 31, 2008, under the caption "Risk Factors."
ELBIT IMAGING LTD.
CONSOLIDATED BALANCE SHEETS
December December 31 , December 31
31 , 2009 2008 , 2009
Convenience
translation
(in thousand NIS) US$'000
Current Assets
Cash and cash equivalents 1,508,301 1,690,433 399,550
Short-term deposits and
investments 563,719 (*) 485,954 149,330
Trade accounts receivable 45,049 34,740 11,933
Other receivable 119,890 134,194 31,759
Prepayments and other assets 335,206 404,613 88,796
Inventories 45,494 38,176 12,052
Trading property 4,157,610 3,279,775 1,101,353
6,775,269 6,067,885 1,794,773
Assets related to discontinued
operation 2,250 9,043 596
6,777,519 6,076,928 1,795,369
Non-Current Assets
Deposits, loans and other
long-term balances 625,695 (*) 706,333 165,746
Investments in associates 41,597 46,655 11,019
Property, plant and equipment 1,648,620 1,618,253 436,721
Investment property 80,487 78,897 21,321
Other assets and deferred
expenses 136,491 118,064 36,157
Intangible assets 53,486 46,582 14,169
2,586,376 2,614,784 685,133
9,363,895 8,691,712 2,480,502
Current Liabilities
Short-term credits 2,218,964 (*) 1,452,144 587,805
Suppliers and service
providers 199,566 214,461 52,865
Payables and other credit
balances 201,450 217,704 53,364
Other liabilities 117,965 105,246 31,249
2,737,945 1,989,555 725,283
Liabilities related to
discontinued operation 18,630 29,186 4,935
2,756,575 2,018,741 730,218
Non-Current liabilities
Borrowings 4,318,633 (*) 4,061,513 1,144,009
Other financial liabilities 96,686 93,121 25,612
Other liabilities 17,450 15,440 4,623
Deferred taxes 39,264 65,114 10,401
4,472,033 4,235,188 1,184,645
Shareholders' Equity
Attributable to equity
holders of the Company 940,467 1,373,692 249,131
Minority Interest 1,194,820 1,064,091 316,508
2,135,287 2,437,783 565,639
9,363,895 8,691,712 2,480,502
(*) Reclassified
ELBIT IMAGING LTD.
CONSOLIDATED INCOME STATEMENTS
Year Year Year ended
ended ended December
December December 31,
31, 31,
2009 2008 2009
Convenience
translation
(in thousand NIS) US$'000
Revenues and gains
Commercial centers 85,466 524,163 22,640
Hotels operations and management 396,736 384,220 105,096
Sale of medical systems 61,683 38,076 16,340
Change in shareholding of
subsidiaries 31,106 49,122 8,240
Sale of fashion merchandise 118,386 102,736 31,360
693,377 1,098,317 183,676
Expenses and losses
Commercial centers 169,253 432,760 44,835
Hotels operations and management 353,229 354,850 93,571
Cost and expenses of medical
systems operation 67,403 55,469 17,855
Cost of fashion merchandise 134,142 118,040 35,534
Research and development
expenses 73,959 68,759 19,592
General and administrative
expenses 66,153 54,944 17,524
Share in losses of associates,
net 14,039 12,952 3,719
Financial expenses (income) ,
net 261,523 (63,995) 69,278
Impairments, charges and other
expenses, net 260,225 68,797 68,934
1,399,926 1,102,576 370,842
Loss before income taxes (706,549) (4,259) (187,166)
Income taxes (tax benefits) (35,571) 24,736 (9,423)
Loss from continuing operations (670,978) (28,995) (177,743)
Profit from discontinued
operation, net 16,550 4,934 4,384
Loss for the period (654,428) (24,061) (173,359)
Attributable to:
Equity holders of the Company (533,269) (103,714) (141,263)
Minority interest (121,159) 79,653 (32,096)
(654,428) (24,061) (173,359)
(1) Sale of trading property and investment property operations
ELBIT IMAGING LTD.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS
Year ended Year ended Year ended
December 31, December 31, December 31,
2009 2008 2009
Convenience
translation
(in thousand US$'000
NIS)
Loss for the
period (654,428) (24,061) (173,359)
Exchange
differences
arising from
translation of
foreign operations 89,638 (453,297) 23,745
Gain from cash
flow hedge (2,099) (49,970) (556)
Loss (gain) from
available for sale
investments 9,383 (5,929) 2,486
96,922 (509,196) 25,675
Comprehensive Loss (557,506) (533,257) (147,684)
Attributable to:
Equity holders of
the Company (466,459) (508,006) (123,566)
Minority interest (91,047) (25,251) (24,118)
(557,506) (533,257) (147,684)
ELBIT IMAGING LTD.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Foreign
currency Stock base
Available
Share Share translation Hedging for sale compensation
Capital premium adjustments reserves reserve reserve
In thousand NIS
Balance -
January 1,
2008 38,032 815,275 45,872 12,848 - 32,909
-
Comprehensive
Loss - - (350,241) (49,970) (4,081) -
Dividend paid - - - - - -
issuance of
shares to the
minority by a
subsidiary - - - - - -
Repayment of
loans as a
result of the
realization
by employees
of rights to
shares - - - - - -
Stock based
compensation
expenses - - - - - 10,931
Dividend to
the minority - - - - - -
Purchase of
the minority
interest - - - - - -
Employee
share premium - 15 - - - -
December 31,
2008 38,032 815,290 (304,369) (37,122) (4,081) 43,840
Comprehensive
income (loss) - - 62,066 (2,099) 6,844 -
Stock based
compensation
expenses - - - - - 13,957
Initialy
consolidated
subsidiary - - - - - -
issuance of
shares to the
minority by a
subsidiary - - - - - -
Exercise of
shares by
employees 6 701 - - - (707)
Equity
componenet of
convertiable
debentures - 19,277 - - - -
Purchase of
the minority
interest - - - - - -
December 31,
2009 38,038 835,268 (242,303) (39,221) 2,763 57,090
(continued)
Loans to
employees Total amount
to attributable
acquire to equity
Retained Gross Treasury Company holders of
earnings Amount stock Shares the Company
In thousand NIS
Balance -
January 1, 2008 1,232,399 2,177,335 (138,519) (3,378) 2,035,438
Comprehensive
Loss - -
Dividend paid (103,714) (508,006) - - (508,006)
issuance of
shares to the
minority by a
subsidiary (168,064) (168,064) - - (168,064)
Repayment of
loans as a result
of the
realization by
employees of
rights to shares - - - - -
Stock based
compensation
expenses - - - 3,393 3,393
Dividend to the
minority - 10,931 - - 10,931
Purchase of the
minority interest - - - - -
Employee share
premium - - - - -
December 31, 2008 - 15 - (15) -
960,621 1,512,211 (138,519) - 1,373,692
Comprehensive
income (loss)
Stock based
compensation
expenses (533,270) (466,459) - - (466,459)
Initialy
consolidated
subsidiary - 13,957 - - 13,957
issuance of
shares to the
minority by a
subsidiary - - - - -
Exercise of
shares by
employees - - - - -
Equity componenet
of convertiable
debentures - - - - -
Purchase of the
minority interest - 19,277 - - 19,277
December 31, 2009 - - - - -
427,351 1,078,986 (138,519) - 940,467
(continued)
Total
Minority shareholders'
Interest equity
In thousand NIS
Balance -
January 1, 2008 1,193,564 3,229,002
-
Comprehensive Loss (25,251) (533,257)
Dividend paid - (168,064)
issuance of shares
to the minority by
a subsidiary 5,860 5,860
Repayment of loans
as a result of the
realization by
employees of
rights to shares - 3,393
Stock based
compensation
expenses 56,162 67,093
Dividend to the
minority (97,775) (97,775)
Purchase of the
minority interest (68,469) (68,469)
Employee share
premium - -
December 31, 2008 1,064,091 2,437,783
Comprehensive
income (loss) (91,047) (557,506)
Stock based
compensation
expenses 36,622 50,579
Initialy
consolidated
subsidiary 5,993 5,993
issuance of shares
to the minority by
a subsidiary 71,940 71,940
Exercise of shares
by employees -
Equity componenet
of convertiable
debentures 19,277
Purchase of the
minority interest 107,221 107,221
December 31, 2009 1,194,820 2,135,287
ELBIT IMAGING LTD.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Cumulative
Foreign
currency Stock base
Avaialable
Share Share translation Hedging for sale compensation
Capital premium adjustments reserves reserve reserve
Convenience translation US$000
December 31,
2008 10,075 215,971 (80,627) (9,833) (1,081) 11,613
Comprehensive
income (loss) - - 16,440 (556) 1,813 -
Stock based
compensation
expenses - - - - - 3,697
Initialy
consolidated
subsidiary - - - - - -
issuance of
shares to the
minority by a
subsidiary - - - - - -
Exercise of
shares by
employees 1 186 - - - (187)
Equity
componenet of
convertiable
debentures - 5,107 - - - -
Purchase of
the minority
interest - - - - - -
December 31,
2009 10,076 221,263 (64,187) (10,389) 732 15,123
(continued)
Loans to
employees Total amount
to attributable
acquire to equity
Retained Gross Treasury Company holders of
earnings Amount stock Shares the Company
Convenience translation US$000
December 31, 2008 254,469 400,587 (36,694) - 363,893
Comprehensive income
(loss) (141,263) (123,566) - - (123,566)
Stock based
compensation expenses - 3,697 - - 3,697
Initialy consolidated
subsidiary - - - - -
issuance of shares to
the minority by a
subsidiary - - - - -
Exercise of shares by
employees - (0) - - (0)
Equity componenet of
convertiable
debentures - 5,107 - - 5,107
Purchase of the
minority interest - - - - -
December 31, 2009 113,206 285,825 (36,694) - 249,131
(continued)
Total
Minority shareholders'
Interest equity
Convenience translation US$000
December 31, 2008 281,878 645,771
Comprehensive income
(loss) (24,118) (147,684)
Stock based compensation
expenses 9,701 13,398
Initialy consolidated
subsidiary 1,588 1,588
issuance of shares to the
minority by a subsidiary 19,057 19,057
Exercise of shares by
employees - (0)
Equity componenet of
convertiable debentures - 5,107
Purchase of the minority
interest 28,402 28,402
December 31, 2009 316,508 565,639
For Further Information:
Company Contact: Investor Contact:
Dudi Machluf Mor Dagan
Chief Executive Officer (co-CEO) Investor Relations
Tel:+972-3-6086024 Tel:+972-3-516-7620
[email protected] [email protected]
SOURCE Elbit Imaging Ltd.
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