In the past year Elco has signed three substantial deals, which emanated for the company an available flow of more than a billion Shekels, and reduced the net debt to only 190 million Shekels The C.E.O of Electra, Itamar Deutcher, has latched onto a clean sweep at the payroll-cost of 13 million Shekels in 2015
2015 shall be remembered as one of the most successful years in the history of Elco holdings. The group, which is dominated by Georg Salkind, wended its way in the passing year towards a net profit of 40 million Shekels (attributed to the shareholders), compared to loses of 88 million Shekels in 2014 and loses of 123 million Shekels in 2013. The dramatic shift in Elco's performance – which was reflected in a rise of 35% in its share during the last 12 months – has derived from an improvement in the activity of the majority of the group's companies.
Thus, for example, the subsidiary company Electra Ltd., which engages in providing electromechanical infrastructure, provided in 2015 a profit of 146 million Shekels to the results of the group, compared to a contribution of 127 million Shekels in 2014. Electra consumption products, which underwent a reorganization plan, contributed in 2015 48 million Shekels to Elco's revenues, compared to a negative contribution of 66 million Shekels loss in 2014. Electra Real-estate has also reduced its losses, and contributed in 2015 a loss of 37 million Shekels, compared to a loss of 151 Shekels in 2014. During 2015 the group recorded an income growth of 13.2% into a sum of 7.6 billion Shekels, compared to 6.7 billion Shekels during 2014.
During 2015 Elco has signed several substantial deals, which emanated for the company an available flow of more than a billion Shekels. The deals, which had been completed after issuing the reports, have brought to the reduction of the net debt from 1.2 billion Shekels to 190 million Shekels only. The deals one has in mind are the following three. The first deal consisted of selling its share (37%) in the real-estate fund LATA, which operates in the field of residential clusters in the USA, to American funds, a move that emanated for Elco an available flow of 680 million
Shekels. Since the start of that activity in 2008, Elco has recorded cumulative profits of 480 million Shekels from the activity of that fund.
The level of leverage has fallen
A second substantial deal consisted of selling Elco's share in a land lot in China for an overall sum of 440 million Shekels. That deal emanated in the first quarter of 2016 a net profit of 268 million Shekels, and an available cash flow of 325 million Shekels. The third deal consisted of selling a land lot in Ramat-Hasharon in a 181 million Shekels transaction. Elco is expected to receive the remains of the payments, stipulated by that last deal, namely a sum of 100 million Shekels, during the fourth quarter of 2016.
Following those realizations of assets, Elco's level of leverage fell to 10% (LTV – net debt as against asset value), compared to the former level of 50%. As a result, the rating company S&P Maalot decided to raise Elco's credit rate to a level of A Plus with a forecast of "Stable". Elco's bonds, summing-up at 808 million shekels, are traded on the market in low yields to maturity of 2.2% - 3.2%.
Those who can certainly be pleased with the annual results are some of the Elco group managers. The payroll cost of the wages of Itamar Deutcher, the C.E.O of Electra, amounted in 2015 to 12.9 million Shekels. Five million Shekels out of that sum were a share-based payment.
The payroll cost of the wages of Alon Shorek, the C.E.O of Electra construction, amounted to 6 million Shekels. The cost includes a share-base payment of approximately 2 million Shekels. The payroll cost of the wages of Ze'ev Khalimi, the C.E.O of Electra consumption products, amounted to 4 million Shekels. A quarter of that sum is a share-based payment. Georg Salkind, who holds the office of president, limited himself to wages of approximately 900,000 Shekels.
Commenting on the financial results, Avi Israeli, VP for business development in the group, has said: "during 2015 a line of significant steps have been taken within Elco, which substantially strengthened the financial solidity of the group. That can be seen in an extensive decrease that had been recorded in the financial debt, and in the rate-raising by Maalot. Those activities, a part of which will be reflected in the company's books for the beginning of 2016, got into the company's funds a net sum of more than a billion Shekels, and illustrate the company's potential for producing revenue in the long run."
"Alongside those steps, the growth in the activity of Electra Ltd. Went on; a considerable advance was recorded in Electra consumption products, following a successful assimilation of a reorganization plan; and Electra real-estate reported of setting onto a new track as the yield bearing real-estate division of the Elco group, with emphasis on residential clusters in the USA. We are working for further growth
in the value of the subsidiary companies, alongside a relentless search for novel investments that are prone to emanate future revenues for the shareholders".